I can’t wait to be a grownup, so I never have to do homework again. It’s a wish that, unfortunately, doesn’t come true – at least for successful small business owners.
According to this Business Insider article, the top reason small businesses fail is because they experience cash flow problems. What’s the main cause of this? More than 40% of these small businesses discover that there’s insufficient need for their product or service. That might have been avoided if these small business owners did a deeper dive into the most important homework attached to this grownup effort: market research.
What’s Market Research, Anyway?
It’s not complicated, and it doesn’t have to be expensive. It’s the simple process of learning about your potential customers. Prospects want you to solve a problem they have. When you understand your customer, you’re able to explain how you can solve their problem – and that creates the foundation of your marketing.
The more you know about your prospects and how to convert them to customers, the less risk you expose your new small business to. Many potential small business owners ask an obvious question: How much time should market research take?
The best and fairest answer is that it should take as long as necessary to make you feel comfortable about proceeding. Use these questions as your foundation:
- How well do you know the industry? If it’s brand new to you, there’s going to be a lot of homework involved.
- Who is your target customer? Once you feel comfortable with who they are, you need to understand how many of them exist.
- Do people who will become your customers spend enough on the product or service you offer to support you and your competitors?
- Why should people stop going to your competitor and come to you, instead?
- Your degree of comfort in answering these questions can determine how much more market research you might need to do.
Here’s some good news if some of these questions have you scratching your head. Your federal taxes help to fund research that’s free and available to anyone who wants to know more about business. The U.S. Census has two extremely useful sources:
- The Industry Statistics Portal can help you find out more information about existing businesses that already do what you plan to do with your small business.
- The Census Business Builder can help you understand your potential customers by providing you with detailed information about spending habits.
We can help you with some of this homework, too. Your small business may need a home. Miracle Truss® features cost-effective solutions for buildings that are less expensive than traditional construction and can be put up faster. We’ll provide you with free building information that’s been selected based on the type of business you plan to operate, as well as your location.