Market Research on a Home Business Budget

Market research is the process of learning what consumers want, quantifying the size of the market, discovering the number and nature of the competitors, and finding collaborators or organizations that exist in the market that are interested in your success.

There are many critical periods in the life of your business where you’ll want to take the time to research your market, but the most important two are:

a) before you start a new business, or
b) when launching a new product or service

Before starting any business and making that initial investment of time and money you need to discover if your business idea or concept fulfills an unmet need of consumers, and also that there are enough potential consumers of your product or service to allow you to make your revenue targets. The same variables should also be considered when your business venture launches a new product or service.
To ensure that you get the best results from your market research efforts you should plan out upfront what information you will need to prompt you to either go ahead with your idea, fine-tune it, or take it back to the drawing board.
Some questions to get you thinking are:
 Who are my customers and potential customers?
 What kind of people are they?
 Where do they live?
 Can and will they buy?
 Am I offering the kinds of goods or services they want - at the best place, at the best time and in the right amounts?
 Are my prices consistent with what buyers view as the product's value?
 Are my promotional programs working?
 What do customers think of my business?
 How does my business compare with my competitors
So how do we find this information? As home business owners most of us don’t have the budget to hire a consulting firm to prepare a market research report, but there are many other ways to research the market ourselves.

1) The internet is a goldmine of free information. You can find a wealth of facts and figures in various industry directories, government abstracts, and other reference guides. The major search engines are a good place to start searching for useful sites.

2) Conduct your own survey by speaking directly to customers and prospects, friends and family
3) Visit your local public library to search periodicals and reference texts

4) Find industry associations related to your business

5) Visit your local Chamber of Commerce to pick up business directories and other local statistics such as population, median income, home prices etc.

6) Scan through the Yellow Pages directory to find out if there are large number of similar businesses already in the area. Of course if there is this means you have competition but it also means that your product or service has high demand in your area.

7) Become a customer of the competition by shopping there yourself or enlisting the help of a friend.

8) Look at the advertising and web sites of similar local businesses to see what types of services they are offering and their prices.

When you are examining the market don’t forget to keep any eye out for gaps or consumer needs that are not being met by competitors as these are opportunities for you to add a product or service to your business that will differentiate you from the competition.

It may be laborious at first to research the market thoroughly but once you have this information it can be used in you business plans, to formulate advertising strategies and select the best networking groups. In the end good upfront market research will help to eliminate wasted time or unfocused business activities.