After the ideation, the most important step towards a successful business is the validation of that idea. Though a lot of businessmen or businesswomen feel that they have the grasp of what they are doing but much to their disappointment, this validation cannot be done on the basis of someone’s guess.
Firstly, nobody is a mind-reader. There is no way that you can know without asking what your target audience or customer feels or thinks about a certain product, service, or idea. Nobody can claim to understand one single person completely and here we are talking about thousands of people.
Secondly, and unfortunately, no investor is going to put money in your start-up idea on the basis of what you think will work out great. When money is involved, we all need some kind of assurance. You can provide this assurance to your investor through your facts, charts, and graphs and not by a 30-minutes speech of why is your idea awesome.
So, now that we know how crucial a role does market research plays in starting and establishing your business, let us get into the process of how you can do basic market research for your business.
The most useful and effective way to perform basic market research without much technical knowledge is to conduct a survey. It means to ask about your product and market directly from the people who are going to use or buy your product or service, that is, your customers.
Before you set out to do market research, you first need to make sure you know what you want to know from that research. You should also know what and how to ask your questions so that you get the desired results.
Here are three things that you must gain knowledge of after you have done your research and should be your focus while designing your survey –
- What is your target market?
- How in-demand is your product or service?
- If at all, how much are people willing to pay for your product or service?
Let us now see one by one how you can get your answer to the aforementioned three questions.
1. What is your target market?
A lot of budding businessmen and businesswomen already have a conception of their target market right from the ideation period. If you are one of them, you might want to hold your horses. Though there is a chance that you may be right, trust us, it is not worth the risk.
There is a possibility that your product or service has a market where you would not even think. We have seen a lot of people become surprised at the result of the market research report.
So, the first set of questions that you should ask in your survey should give you an idea of the demographics. You can ask questions related to their age, sex, gender, region, monthly income, etc.
You can then go forward to ask more personal questions about your product or service to classify them into different categories. Do not ask more than 4 or 5 questions but frame them in an interesting and casual way.
For example, if you want to start a clothing store, you can ask questions like –
- What style of clothing do you prefer?
- How many clothes do you wear per week approximately?
- What clothes do you find most comfortable?
- What are the kinds of clothes you find yourself wearing most frequently?
2. How in-demand is your product or service?
This actually answers the question, “How many people actually want your product or service?”. This is an important step because before you go any further you must know whether the people even need or want your service or not. Because, if the masses do not want your product or service, no matter how ground-breaking your idea is, it is worth nothing.
Analyzing the demand for your product or services within the market actually makes it clear whether you should go on with your project or drop it right there.
The initial analysis involves more of an observation and less research. There must be businesses operating on a similar idea in the market. You must look at how successfully or unsuccessfully they are running. What is the public response to those businesses? You can do a little research on your own regarding these companies and then also ask questions about them.
In case that your idea is not similar to any of the existing concepts, it gets a little tricky to analyze the demand of the public. However, you can frame an extremely lucid descriptions of what you are planning to do and then ask for public opinion on your idea.
3. If at all, how much are people willing to pay for your product or service?
No matter what your business is and how do you plan to run it, the end goal is to make people buy your product or service. For this, you need to make your product or service easily available to the masses and at a price that won’t make them regret buying it. It is important to have an idea of what is the amount that the customers are willing to pay for your product and service. You can ask 4-5 very simple questions to get an idea like- what should be the appropriate price range for a particular product? At what price will the product be too expensive? At what price would you start having a doubt about the quality of the product etc.
We hope you understand how to do basic research by now. In case, you would like it to be done professionally, there are Market Research Companies that do this researches for you and give you the final findings in a report. Aeon Market Research is one of the best companies that you can consider if you would like your market research to be crisp, clear, and effective.