Risks are part of any business and with limited resources, business owners and entrepreneurs realize that risks needs to be calculated and mitigated. Employing market research helps at times to sort out risks involved in a business. The advantages of market research for small businesses range from finding hidden niches and preserving capital to building customer loyalty and identifying greater business opportunities.
Before taking the initiatives to understand customer needs and wants through market research, it is important to identify common pitfalls and challenges encountered by startups and small businesses.
High Costs: The biggest challenge small business owners face is related to the costs of conducting market research. For small businesses, focus groups and surveys are unaffordable, while the price for primary research and paid market research can range from a few thousand dollars to $25,000.
Tip: If you have the time and interest to learn what it takes to do effective research, there is no reason as to why you cannot execute a portion of the study yourself. Hire small-medium professional firms to conduct secondary research and analyze the existing data on your target markets. Relevant data is usually available from the internet, articles, journals, magazines, published research studies, and government publications at a low cost.
Relying on Primary Research and Surveys Only: Research comes in 2 forms: primary and secondary. Primary research is first-hand knowledge, which analyzes customer attitudes in real time and often uses techniques as focus groups and surveys. However, these activities are expensive and become challenging for startups and small businesses.
Tip: Learning about your business and industry from secondary research is a good start. Secondary Research activities can be implemented to analyze market trends, evaluate the competition and assess social, economic, and political environmental factors.
Web Searching: The internet has opened up a flood of business information once only available to bigger companies. Conducting secondary market research by using search engines saves time and money for small businesses. While a web search has limitations, these can be overcome by other low cost mechanisms.
Tip: Other than using web and public domains, visit a local library, business center, or college to gain access to quality information at a negligible cost.
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