Business guru Peter Drucker says that businesses exist to create customers. If you can’t create customers, your business will end. If you’re already generating revenue with a solid, consistent customer base, you have market demand. But if you’re unsure whether market demand exists (or whether current demand will continue), you’ll need to do some market research.
What’s market research? It’s a collection of facts about your industry, your customers, your area, and your business. It’s referred to as primary research when it’s gathered for a particular purpose—for example, you survey local residents. Secondary research is information that’s already been gathered about a business or industry.
It’s not difficult to do primary research, and it can be very informative. You need to find people—customers, focus groups, or a random sample of folks at a shopping center—and ask them questions that will help you determine whether there is a market for your services or products. These surveys can also be conducted over the Internet, by phone, or by mail. Choosing the right questions requires some skill. For example, should you use open-ended questions that the person completes or closed-ended questions that provide choices?
Secondary research requires digging through Internet data or searching at your local library. You’re looking for demographics in your area, trends within your industry, and economic forecasts. When you’re done, you should be able to answer questions such as “Should I open a Balinese restaurant in Sheffield?” or “Is there a national market for my line of vegan desserts?” Common sources for secondary research are:
Trade associations. Use an Internet search engine to find the group representing businesses within your industry.
Trade publications. Check for magazines or newsletters published for your industry.
Government websites. Tons of free information is available online at the government website or by using a search engine.
Business directories. Check for information about your competition online in business directories such as Free uK Business Directory, Yell or look in print form, for example, at your local chamber of commerce.
If you’re prepared to spend hundreds or thousands of dollars on research, companies on the Internet such as Informars can provide customized market research.