In this time of the Great Resignation, people, particularly millennials, are seeking work options that offer a certain amount of freedom and flexibility. Many millennials would prefer to start their very own business rather than go to an office to work for someone else. If you have a business idea, you may not be sure where to start. Before you do anything else, you need to understand the market for your business idea. Who is most likely to buy what you have to offer?
Here we will discuss how to research your market and determine what the best market is for your business.
Primary Research
There are two types of research – primary and secondary. Primary research involves going directly to the source, which is your potential customers. You literally have to go out and ask people what they think of your business idea and if they would have an interest. You’re trying to determine a few things. One, is there actually a market for your business? Your product or service has to solve a problem that people have, and that they are willing to pay to solve.
Second, you’re trying to find out who has interest in your product or service. Is it a younger demographic or an older demographic? Is it primarily men or women? Is it people at a certain income level? You also need to know why they will buy your product or service. What would motivate them to buy?
This information will help you to determine where you should market your product or service. For example, if your market is a younger demographic, you should probably focus your marketing on sites like TikTok and Instagram. You might also want to invest in influencer marketing, which means paying people with large social media followings to promote your product or service. You can find micro-influencers with smaller followings and lower rates.
The information will also tell you how to market in terms of the message you send. This comes from knowing what will motivate them to buy. By knowing your potential customers, you can personalize your messaging to show how your product or service meets their needs and wants.
To get all this information, you can start by asking family and friends. You can also gather people to hold a focus group. You can get people to attend by offering them a free sample of your product, or some other small incentive like a gift card. You can also create online surveys to get information from a large, random group of people.
The questions you should ask, aside from demographics, are things like:
- What do they currently buy that’s related to or similar to your product or service?
- What motivates them to buy what they currently buy? What do they like about it?
- What could you do differently to get them to buy from you?
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Secondary Research
This is when Google is your best friend. You’re going to start looking up information about your industry and about competitors. Start by searching “_____ industry statistics”. You’ll find out the size of the market, if it’s growing or declining, and sometimes statistics about who the customers are in terms of demographics and location. Sometimes you’ll also find out what companies are the biggest players in the industry.
Then search for trends in your industry. You’ll find out what types of products are trending and their features, and you’ll often find articles about who those products are trending with. For example, products might be rising in popularity among millennials or Gen Zers. All of this research will give you information not only about your market but what your product design should look like based on what’s trending.
Next, you’ll want to research your competition. You can determine what their strengths are weaknesses are by looking at customer reviews. You can also find out which of their products sell best and who their customers are. You’re looking for a way to give your company an advantage based on what they’re doing and not doing and based on what you’ve learned about your market and their buying motivation.
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Build a Customer Profile
With all the information you’ve gathered, you need to put together a customer profile. Who are they, how old are they, what’s their income level, what do they like, why do they buy. From this profile, you can begin to determine where you should focus your marketing and create your marketing message. What value are you providing to this specific group of people as defined by your customer profile?
In Closing
Of course, there are many other steps to take to start your new business, but knowing your market first is going to give you valuable insights to help design and market your product. You’ll also learn much more about how a business such as yours operates, and the opportunities and challenges that you’ll face. All of this information will be the foundation of your business plan, and once you have your plan and place, the next step will be to start making money!
