Startup Businesses - January 04, 2012

Market research has been used by new and existing companies of all sizes for many years. Knowing a customer base and a competitive landscape inside and out is the best way to stay on top and adapt to changes.

However, those wishing to start a business can also utilize these research tactics before they even spend a dime. This could help entrepreneurs better understand the business climate they are getting into and discern how much startup financing they will really need.

A customer panel can be an excellent source for market research, says GeekWire. Be sure to first establish the goals and purpose of the panel so questions are tailored to extract pertinent information. Then, choose consumers who will participate, figure out where the panel will be held, conduct the event, gather the results, then compile all data collected into a document that can be used to discuss what has been learned.

The news source says that market research tools like customer panels are inexpensive, meaning "you no longer have an excuse for not performing marketing research."

According to Entrepreneur magazine, "No small business can succeed without understanding its customers, its products and services, and the market in general." This is especially true given today's uncertain economy and fierce competition.

To begin a proper market research study, businesses must utilize both primary and secondary research.

Primary research pertains to the gathering of data that a business conducts first-hand, through interviews, surveys, focus groups or questionnaires. Secondary research is data from these avenues or others collected by different sources that is then analyzed to identify benchmarks, target segments and competitors.

"Failure to do market research before you begin a business venture or during its operation is like driving a car from Texas to New York without a map or street signs," William Bill of Wealth Design Group LLC in Houston explains to the news source. "You have know which direction to travel and how fast to go. A good market research plan indicates where and who your customers are. It will also tell you when they are most likely and willing to purchase your goods or use your services."

Common mistakes to avoid when conducting market research, according to the publication, include not using any primary research, relying solely on web sources and surveying only people already known to a business or potential startup.