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How to conduct market research for your business idea

If you don’t know who you’re selling to, you may miss important acquisition opportunities. Market research helps you to uncover key information about your target market so that you can reach, engage and ultimately convert your ideal customers into buyers.

The internet has made it easy for customers to find out information about brands online. The same is true for small business owners looking to figure out how to do market research for a business idea .

Market research will help you to discover who your ideal customers are, where they hang out online or in-person and how and why they make purchasing decisions. Armed with this information, you can get in front of your ideal audience in the right place at the right time, thus grabbing their attention and motivating buying behaviour.

In this article, we’ll explain what market research is and why it’s important, outline several types of market research and detail how to do your own market research to boost reach, drive conversions and increase revenue.

Top Tip: Conducting market research is a key part of ensuring that your start-up idea is something that people actually want and/or need. Once you’ve finished your research, you’ll need to get into the nitty gritty of creating a brand for your business, choosing your company formation structure, educating yourself on business laws and regulation, sourcing funding (if necessary), and marketing your business. You can learn how to do all of this and more in our guide to 10 effective steps to start your business in the UK 📌. 

Table of contents:

What is market research.

• Why is market research valuable? 

Types of market research

• How to conduct market research in 5 steps

5 common market research questions

Wrapping up.

Market research is the process of identifying information about your target industry as well as your target customers. 

When starting a new business, it will help you to answer the following questions:

• Demand: Is there a desire or need for your product or service? If so, what problem or pain points does your offering solve and how can you better align it to suit this demand? 
• Market saturation: How many similar options are already available to consumers?  Further, what are those businesses who are already in the space doing well and where are they missing opportunities? What can you do differently to fill in these gaps?
• Market size: How many people would be interested in your value proposition? This will help you to forecast your startup budget or, for businesses that are post-launch, this new product or service budget. From there, you can also predict revenue and profitability.
• Economic indicators: What’s the income range and employment rate of your target audience? This is the first step in customer research and it will help you to create detailed customer personas (more on these later on).
• Location: Where do your customers live and hang out, both geographically and online, and where and how can your business reach them?
• Pricing: What do potential customers pay to your competitors? This will help you to figure out exactly how to price your products or services so that you can stay competitive and achieve profitable markups. 

The results from this research will help you tailor your marketing efforts and brand messaging to better engage your audience. And, it will help you to design and package your product or services in a way that aligns with your audience’s needs. All of this leads to better conversion rates, sales and revenue. 

Why is market research valuable?

Understanding your customers is the most effective way to drive engagement and increase loyalty. Knowing their desires, needs and pain points helps you create a better user experience and cater to audience demand.

Market research is invaluable because it gives you compelling insights into user behaviour. While data and analytics give you a high-level overview of behaviours, market research goes a step deeper and uncovers what drives user intent. If you can unearth user intent, you can speak directly to your consumer with personalised messaging that motivates them to take action.

Market research also helps you uncover industry trends, ensuring you’re staying in line with what customers want and need out of similar products or services within the same industry. 

Competitor research like this helps you figure out what your competitors are doing well and where there are gaps in their strategy that you can fill. Plus, getting a sense of small business trends in your target market will help you to understand how they will impact your revenue and profits. 

There are two main types of market research methods: primary and secondary. Primary research entails speaking directly to the source, or direct-to-consumer, and secondary research is the act of gathering data from existing third-party sources. 

Both main types of research utilise qualitative and quantitative research methodologies.

Qualitative research focuses on data from first-hand observations, such as interviews, focus groups and questionnaires.

Quantitative market research , on the other hand, focuses on collecting and analysing big data from larger sample sizes, such as demographics, spending behaviour and opt-in rates.

To conduct the most well-rounded market research, you should incorporate both types of research and methodologies. It’s easier to start with secondary research and move into primary research once you have an idea of general industry and consumer trends. As secondary research has already been compiled and published by others, it’s less time-consuming and often cheaper than primary research. 

If you’re starting a new business, whether a full-time endeavour or a side business for extra income, this market research will be critical when creating a market analysis section in your business plan . Showcasing exactly what your competitors are doing, how your business will fill industry voids and your plan to attract your target audience will help to generate interest in your business idea.

Let’s dive into the two types of market research in more detail.

Secondary Research

Secondary research is third-party data that gives you a high-level overview of your target market. This data can be found in trend reports, market statistics, industry content, your own sales data if your business is post-launch, studies by government agencies, trade associates or other businesses. 

There are two main ways to access secondary research data.

• Public Sources: These include government statistics, academic databases, news sources, published books, published studies, and so on. Publicly sourced information is often free and you can find it online or in libraries. Such sources in the UK include the Office for National Statistics , the British Chambers of Commerce and the Federation of Small Businesses and more. 
• Commercial Sources: These sources are often in the form of statistics from private-groups that you have to pay money to gain access to. Such companies include Forrester , Gartner , International Data Corporation (IDC) , Everest Group , Mintel , Euromonitor , YouGov and more. You can also use online sources (both free and paid) that analyse online behaviour and trends like Google Trends , Product Hunt , Social Mention and SimilarWeb .

Primary Research

Primary research is research you conduct yourself in order to gather more detailed information about your specific target audience. You should begin primary research only after you’ve completed secondary research as it’s meant to fill any missed gaps from third-party sources.

There are three main ways to do primary research.

• Exploratory research: This involves talking directly with people. You should have an initial sense of your target audience from your secondary research, so this is the first time you’ll be communicating directly with them. Start with broad, open-ended interviews in an attempt to narrow down this group into a more niche audience.
• Specific Research: Once you’ve generated this smaller, more niche group, use the same methods that you applied to your exploratory research. But this time, ask more specific questions to get more valuable and intent-driven answers. 
• Internal Sources: If you’ve already launched your business and are conducting market research to see if the industry has changed since launch, collaborate in-house to see what your existing customers are saying. What were their challenges and pain points at launch and how have they changed? What are your customer’s biggest needs now? What do they say you can be doing better? The idea is to learn from and improve upon your original research by combining historical with updated customer-driven insights. 

How to conduct market research

There’s no one specific way to do market research. Generally, you want to start broad and narrow your research as you learn more. 

Once complete, you should be able to define your buyer persona, know their specific needs and pain points, understand how your competitors are positioning themselves in the market and identify your opportunity to gain a competitive advantage.

Here are five steps you can follow to organise and optimise your market research process.

1. Define your buyer persona

The key to driving brand engagement and purchasing behaviour is the ability to connect with your target audience. Otherwise, you’ll be promoting your product or service to a wide array of potentially uninterested parties, wasting valuable time and money.

Defining your target audience is the first step of your primary research efforts. Once you understand who you are selling to and what their interests are, you can and subsequently reach out directly via your secondary research initiative (we will explain how to do this in step 2 below). 

From there, you can begin to create a buyer persona. Use your target audience research to create buyer personas that answer the following questions:

• Who are your customers and why are they interested in buying your product or service?
• What characteristics, interests, desires, pain points and needs do they share?
• Where do they live?
• How old are they?
• What is their education level?
• What is their income range?
• Which types of websites do they frequently visit?
• Where do they currently buy similar products?
• Which languages do they speak?
• What industry do they work in?

Use the aforementioned public and commercial resources to gather and compile this data. Once complete, you can build your customer persona. This step is important because you can distribute a detailed, shareable document amongst your team or potential investors to guarantee everybody clearly understands your target audience. 

You can use online tools like HubSpot’s customer persona creator , Xtensio , Userforge or Smaply to build basic buyer personas quickly. 

Top Tip: This is the first step in building a marketing strategy that will help you gain traction and boost brand awareness. To learn more about how to attract your ideal audience, read our guide on how to build a go-to-market strategy .

2. Engage with a small target sample

Now that you’ve completed your initial customer personas and market research, it’s time to dive deeper into your audience’s behaviours. This is where your secondary research efforts come into play.

You can reach out to your target audience in several ways across many mediums. Remember to begin with exploratory research by asking open-ended questions and follow up with specific research that unveils invaluable insights. 

• Surveys: Use online surveys to ask a group of people a set of questions. Often, an online survey is delivered via email, but it can also be posted on social media platforms or online forums. Surveys are easy and cheap to conduct, the results come in quickly and the data is straightforward to analyse. You can use platforms like Survey Monkey , JotForm , Google Forms , LimeSurvey and more.   
• Emails: Send a cold email asking if they will be open to answering some of your questions. You can attach your survey to this email and/or use it as a platform to schedule a more in-depth phone interview. 
• Phone calls: Phone interviews allow you to speak directly with your potential customers. Use their answers to formulate your follow up questions to dive deeper into intent and expose insightful trends. 
• Face-to-face: This will be exactly the same as the phone interview, but one-on-one in person. In-person or interviews via video conferencing can be more valuable than phone calls as they give you the opportunity to see body language. Sometimes, you can learn more about what a person is feeling based on their body language rather than their words. Observation is key in face-to-face meetings.
• Focus groups: Focus groups bring together a group of selected participants to answer questions in real-time. Usually, a trained moderator will lead the discussion and ask questions about your product or service, user experience, user expectations, competitor products or services, marketing and branding messaging and more. 
• Call for participants via social media: Post on social media platforms to generate interest about participating in any of the above methods. Make sure you are posting your questions in the places that your target audience hangs out online, such as LinkedIn , Facebook groups, Twitter , Reddit , and so on, so that you attract people that align with your unique customer personas.
• Leverage your network to get participants: Apply the same methodology as your social media call for participants when leveraging your own network. Reach out to friends, former coworkers, family members and more to see who among them fits into your customer persona and is willing to participate.

3. Identify competitors

Gathering information about your competitors helps you figure out who their audience is, how they communicate with them and how they position themselves in the marketplace. This will help you to learn from their successes and failures so that you can replicate the fruitful tactics and avoid messaging or branding that received negative feedback.

There are two types of competitors to identify.

• Industry competitors: Industry competitors are those that saturate your target marketplace. For example, if you are selling a SaaS video conferencing tool, your competitors will be businesses like Zoom or GoToMeeting.
• Content competitors: Content competitors may not be competing in terms of the products or services they sell, but they are competing in terms of content creation. For example, if you run a leadership training business, a content competitor will be a business that creates content about how to be a great leader. This content competitor could run a finance business, a retreat business, a SaaS business or so on, but because they create content that targets similar keywords, they are a competitor in that specific space. 

It’s important to understand as much as you can about your competitors so that you can make better decisions. Learn everything about your competitor’s audience and apply those insights to your branding and marketing strategy.

4. Analyse data

You will amass a ton of information throughout this process. Make sure that you are using a system that helps you organise it so that it doesn’t become overwhelming.

Here are some ideas on how to do this:

• Sort your data into groups to better understand the big picture
• Create several distinct customer personas if you learn that you have more than one audience type
• Build a matrix chart to see how often pain points, desires, needs and attributes overlap 
• Generate a customer journey map to outline the journey from awareness to purchase, using free or paid tools like LucidChart , HubSpot or Visual Paradigm .

Once organised, you can draw meaningful insights from your data collection. This will help you to further shape your offering and messaging. 

5. Summarise findings

Summarise your findings in a simple and shareable format. Draw inspiration from the common themes you discovered to help tell a story about your target audience. 

This will guide future marketing and branding efforts and help your team and potential investors develop a clear picture of who your ideal audience is in their minds.

Add in quotes, diagrams, call clips, video clips and more to amplify the audience’s voice. Outline who you talked to, common themes and if you will stay on course or pivot based on any common feedback threads. End the summary with immediate next steps and action items.

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The most effective questions get to the heart of the matter and help you obtain invaluable insights. These insights will affect who you target, where you position your brand, what your messaging will be, what voice and tone you will use and much more. 

Here are some common market research questions.

1. What do you look for in a brand?

This will help you figure out what matters the most, at a high-level. For example, does your audience care about engaging with brands that support a good cause, or do they prioritise quality above all?

From this answer, you’ll have a better idea of what to include in your messaging. If your audience prefers brands that support a good cause, you can forge partnerships with nonprofits or charities and commit to donating a portion of your proceeds to them. Then, add this messaging on your website or in your content to make sure your audience is aware of your stance.

2. What are the reasons or actions that drive you to make a purchase?

Based on that answer, you can ask more specific follow up questions such as:

• Do you prefer testing products with free trials, or are explainer videos sufficient to pique your interest? 
• Do you prefer when a company is active on social media or do you not care so much?
• How much does a business’s customer service response influence your brand loyalty?

Use these answers to uncover desires, expectations and experiences that influence your focus in these areas.

3. What problem were you trying to solve or what goal were you trying to achieve when you purchased from [COMPETITOR]?

This answer will help you understand your competitor’s audience to see what their intent was before making a purchase. You can use these insights to position your business as a better solution to their problems.

4. What challenge(s) at work has [COMPETITOR’S] solution failed to solve?

From this answer, you can identify pain points that your competitors have yet to build a solution to. Ideally, you can get to market before them and present your product or services as the solution that will fix their ongoing problem.

5. What does your day look like?

While broad and open-ended, this question will help you learn more about your target audience in general. You need to not only understand what drives their buying behaviour, but who they are in a larger sense. 

This will help you build empathy for your audience, which will only serve to help you when speaking directly to them and personalising messaging. Plus, you may uncover something you didn’t previously know about their buying habits from this answer.

Market research is crucial in order to identify, understand and segment your target audience. Further, it allows you to gain a high-level understanding of your target industry as a whole, giving you the data you need to competitively price your products and forecast revenue.

Without market research, you will be selling blind. The most successful companies not only understand their place in the market and exactly who they are selling to, but how and where to target them. 

Plus, they know why their target audience makes certain purchasing decisions, helping them to skew their messaging in a way that captivates, engages and produces results.

Photo by Startup Stock Photos, published on Pexels

Valentine Hutchings

Head of Community and small business enthusiast

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How to do market research for your business idea

Last updated

3 April 2024

Reviewed by

Market research provides valuable data that ensures your business idea resonates with customers and generates demand. If the research confirms consumers are interested, you can build a business delivering the product or service. If not, you can use the findings to adjust your idea so it reflects what customers want.

Conducting market research and analyzing the results can mean the difference between success and failure. Let's look at how you can do market research for your business idea and turn it into a thriving enterprise.

Market analysis template

Save time, highlight crucial insights, and drive strategic decision-making

• What is market research?

Market research refers to analyzing your business's target market to evaluate the viability of your business idea. You will learn why, or even if, consumers want to purchase your service or product, their spending habits, and their purchasing decisions.

By understanding the market, you can:

Make better products

Improve user experience

Offer competitive prices

Find ways to attract the most customers

Market research is critical to starting and growing a successful business.

• Why is market research important?

Consumer behavior plays a crucial role in determining the success of a business. Your consumers will not only buy your products or services but will also either warn against or recommend your company to others.

Understanding what your customers want and how they think, feel, and make decisions is the first step in delivering their needs.

There are many reasons for conducting market research. Let’s look at the most important ones.

Gives you a better understanding of your customers 

Market research will help you, as an entrepreneur, better understand your target customers. You will gather insights into their:

Demographics

Pain points

Buying habits

Preferences

As such, you can tailor your products or services and create a customer experience that appeals to your potential customers . Market research can:

Drive customers to your store, product, or service

Help you turn clicks into conversions

Maintain a customer-centric approach

Build loyalty and trust

Helps businesses make informed decisions

Market research not only provides data about customers but also uncovers market trends and growth patterns. This minimizes your reliance on gut feelings, assumptions, and guesswork.

You can set realistic goals and make the right choices for your business. You'll know:

What to expect in the future

What will work in the market

How you can reinvent your business to stay relevant

Making data-driven decisions will boost your chances of getting it right the first time.

Identifies opportunities for growth

Market research helps startups identify opportunities to improve and gaps they can fill. You may pinpoint new customers who could benefit from your business idea. These could be in areas where your business does not have a presence or is falling behind its competitors.

Market research can also reveal partnership opportunities with businesses that already have an established customer base with your target audience. It can also identify the shortcomings in your business idea and help you avoid expensive mistakes.

You can also uncover opportunities for product bundles, add-ons, and other value-adds that increase your profits. Having the right knowledge can help drive profitability.

Minimizes risks

Every business deals with a range of risks including:

Operational

Business risks usually arise when there's uncertainty around profits, strategy, and other elements. These risks can significantly affect a business's bottom line, including its reputation among consumers, leading to:

Lower profits

Inefficient processes

Possible failure

Conducting market research will help identify the potential risks associated with your business idea early on. You can stay informed of laws and regulations, refine your workflows and processes, and develop risk-management strategies that reduce the chances of failure.

Establishes product or service viability

As an entrepreneur, the last thing you want is to invest resources and money in an idea no one wants or needs. You can use market research to test your business idea before investing.

Market research for your business ideas will help you to;

Understand what the core product and its features need to look like

Gauge market demand

Gather information about your competitors' actions

This will help you validate or refine your initial business idea based on the collected feedback and data.

Shapes marketing and branding strategies

An effective marketing strategy ensures your business stays in sync with your customer base. To create successful campaigns for your business, you must know and understand customers to reach and connect with them.

Market research can help determine how you communicate information about your products or services and your marketing channels. You can develop an informed marketing strategy that puts your business ahead of your competitors.

• Types of market research

Primary and secondary market research are the basic types of market research. However, as technology and marketing become more sophisticated, entrepreneurs can use new ways to discover valuable information that can create better insights, and better product and service experiences.

These market research methods include:

Brand awareness research

Competitor analysis

Market and customer segmentation

Pricing research

Customer satisfaction and loyalty research

Product research

Campaign research

Customer research

The type of market research you choose will influence your critical business decisions. Therefore, select the right research methods to help your business stay relevant, adapt, and compete. Entrepreneurs can use different types of market research to allow for more granular data collection .

• Primary vs. secondary research

Primary research

Primary research involves collecting new data from original sources. This involves going directly to your target market or employing a third party to conduct relevant studies on your specific customers or market segment .

Primary research methods include:

Focus groups

One-to-one interviews

Consumer observation

Data is collected directly from respondents, allowing you to gain specific insights tailored to your objectives. This may include a firsthand perspective on consumer preferences, behaviors, and trends.

Primary research helps you to:

Create buyer personas

Improve your business idea

Segment your market

Secondary research

Secondary research involves using pre-existing data from various sources to gain insights into your target market and industry. This includes reviewing reports, studies, and data collected by others in your industry.

Secondary sources include:

Industry reports

Internet search engines

Government publications

Statistical databases

Academic papers

Industry experts

From secondary research, you will gain broader industry perspectives, competitor strategies, historical data trends, and context for understanding market dynamics. Since most of this information is freely available, secondary research is more cost-effective for startups.

• How to conduct market research for your business idea

1. Define your target market

Entrepreneurs can only gather meaningful insights once they know who to include in their market research. Otherwise, you may waste resources collecting unnecessary data.

First, define and understand your target market. Work out which types of consumers will be included, their interests, and how the data will be collected.

Ask these questions to help you:

Who is your target market as a whole?

How old are they?

What characteristics, interests, desires, pain points, and needs do they share?

Where do they buy similar products?

What are their income ranges?

Where do they live?

What major challenges do they face?

The idea is to visualize your audience and understand their actual characteristics, buying habits, and possible challenges. This allows you to develop marketing research that targets people who are interested in what you offer or plan to provide.

2. Develop a market research plan

Like any other business process, market research requires an effective plan to be successful. You should know what you're trying to accomplish and the information you'll need.

Your market research plan should include the following:

The issues your business idea addresses

Clear objectives and goals

The research methods you'll use to achieve those objectives (the research design)

The estimated time frame to complete tasks

The required budget

Any ethical issues or other considerations that may arise

Planning your market research can save you time, effort, and money. You'll not only target the right audience but also invest in the right sectors and align your research with your business objectives.

3. Study your competitors

Knowing your competitors , what they offer, and how they position themselves in the market can help set you on the right path.

Research your competitors':

Brand reputation

Overall strategies

Marketing campaigns

Revenue or sales volume

Other activities

This can help you determine how to differentiate your business from theirs and learn from their strengths and weaknesses. You'll understand the business landscape and be better able to assess your chances of success.

4. Conduct a SWOT analysis

A SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is a powerful way to analyze your business idea. It will help you assess your internal capabilities and the external market conditions to identify potential advantages and challenges.

A SWOT analysis usually entails the following:

Strengths: This involves identifying the strengths of your business idea. Some common strengths you can evaluate include your idea’s competitive advantage, efficiency, and unique qualities.

Weaknesses: Weaknesses are usually areas where you can or should improve. Common areas of improvement include things your competitors do better than you and internal factors that make it challenging to achieve your goals.

Opportunities: These are ways you can grow your business idea and make it more profitable. These are opportunities open to you, trends you can take advantage of, and ways to turn your strengths into opportunities.

Threats: Threats include everything that poses a risk to your business idea. These can be things that prevent you from entering the market or achieving success and growth. Threats to your business may include emerging competitors, a changing regulatory environment, and the possibility of losing relevance.

Typically, strengths and weaknesses are internal factors you can control, while opportunities and threats are external factors that can be anticipated. Conducting a SWOT analysis allows you to identify areas to focus on, build, and work to overcome.

5. Run surveys and focus groups

Surveys and focus groups are effective ways to fully understand your target market and competition. Surveys are straightforward and can be cost-effective to conduct, and the data is relatively easy to analyze. You can use online platforms that deliver surveys through online forums, social media sites, and other convenient means. Your surveys should contain a variety of question types, including:

Open-ended responses

Rating scales

Multiple choice

Focus groups involve gathering a small group of individuals (usually 5–10) to answer questions and provide feedback. The groups are led by a moderator who asks questions, allows discussion, and keeps the conversation moving in a productive direction.

6. Study trends and industry reports

Market trends and industry reports keep you updated on what's happening in your industry or target market. This includes changes, shifts, and recurring trends within a particular market or industry. They give valuable insights into:

Consumer preferences

Economic factors

Emerging technologies

Other aspects that may shape the market's future

You'll learn more about key metrics such as revenue, sales, average selling prices, and growth opportunities. They provide a solid overview of market dynamics and the factors driving it. After reviewing these, you'll be able to identify:

Growing industries to invest in

Barriers or threats you may face

Your major competitors

7. Analyze data

After conducting your research, you'll have information and data to analyze. We recommend using a system that helps you organize your collected data to find actionable recommendations . This can include:

Sorting your data into groups

Identifying patterns

Creating distinct customer personas

You can also use the SWOT framework, spreadsheets, or data visualization software to arrange and analyze your information. When reviewing, look for information that will help you answer your objectives and critical questions.

8. Summarize findings

Once you have analyzed your data, you can summarize your findings in a simple, shareable format. This can be in the form of a summary report containing insights, recommendations, and resulting strategies from the data analysis . You can then share what you learned during the research and analysis with your team members.

Your findings should help you identify:

Opportunities for growth and improvement

Answers that fulfill your objectives

This will help guide product development , marketing strategies, and other crucial decisions that drive success. You can also use summarized reports for future marketing and branding efforts.

9. Validate your business idea

Validation involves evaluating your business idea against the information gathered through market research. This helps ensure your business idea has the potential for success in the marketplace.

You can validate your business idea by determining whether:

There's a need for your product or service

There are enough potential customers

You can do better than your competitors

Your customers validated your idea

You're solving a problem

You can attain the highest rewards and achieve long-term success

Think about the assumptions you have about your business and validate them with real-life situations and data. Assumptions can include:

Your business model

The value you believe your products offer

Your desired pricing

You can also test your products or services with real users to get their opinion and see how it works in the real market. You can then modify your business idea based on what you learn.

• 10 common market research questions for a new business idea

The market research questions you choose will play a vital role in creating an accurate buyer persona and capturing valuable insights. Select questions that will help your business collect precise information about your target market, audiences, and competitors. 

Here are some common market research questions for startups:

Who is our ideal customer? What is the size of our target market?

Who are our biggest competitors? How are they doing business in this market?

What are the problems we'll solve for our target groups?

What regulatory or compliance challenges might we face in this specific market?

What are the current (and predicted) trends impacting the market?

Who would purchase this product if it were available today?

What challenges do you currently face in [relevant industry/problem area]?

What features are most important when considering a [product/service]?

What types of brands are boycotted and why?

Which aspects of our advertising or marketing message are most compelling?

When should you conduct market research?

In ever-changing, highly competitive markets, businesses should always know what's happening in their industry. Therefore, entrepreneurs should be strategic about when to conduct market research.

Typically, you should conduct market research:

Before and after launching a new business

Before and after developing or launching new products or services

Before and after entering new markets

What type of market research is best for startups?

Most startups use secondary research because it's quick and more affordable. However, you can also use modern tools to design robust market research studies. Startups can also benefit from conducting primary research if resources allow.

Should you be using a customer insights hub?

Do you want to discover previous research faster?

Do you share your research findings with others?

Do you analyze research data?

Start for free today, add your research, and get to key insights faster

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How to Do Market Research: The Complete Guide

Learn how to do market research with this step-by-step guide, complete with templates, tools and real-world examples.

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Market research is the systematic process of gathering, analyzing and interpreting information about a specific market or industry.

What are your customers’ needs? How does your product compare to the competition? What are the emerging trends and opportunities in your industry? If these questions keep you up at night, it’s time to conduct market research.

Market research plays a pivotal role in your ability to stay competitive and relevant, helping you anticipate shifts in consumer behavior and industry dynamics. It involves gathering these insights using a wide range of techniques, from surveys and interviews to data analysis and observational studies.

In this guide, we’ll explore why market research is crucial, the various types of market research, the methods used in data collection, and how to effectively conduct market research to drive informed decision-making and success.

What is market research?

The purpose of market research is to offer valuable insight into the preferences and behaviors of your target audience, and anticipate shifts in market trends and the competitive landscape. This information helps you make data-driven decisions, develop effective strategies for your business, and maximize your chances of long-term growth.

Why is market research important? 

By understanding the significance of market research, you can make sure you’re asking the right questions and using the process to your advantage. Some of the benefits of market research include:

• Informed decision-making: Market research provides you with the data and insights you need to make smart decisions for your business. It helps you identify opportunities, assess risks and tailor your strategies to meet the demands of the market. Without market research, decisions are often based on assumptions or guesswork, leading to costly mistakes.
• Customer-centric approach: A cornerstone of market research involves developing a deep understanding of customer needs and preferences. This gives you valuable insights into your target audience, helping you develop products, services and marketing campaigns that resonate with your customers.
• Competitive advantage: By conducting market research, you’ll gain a competitive edge. You’ll be able to identify gaps in the market, analyze competitor strengths and weaknesses, and position your business strategically. This enables you to create unique value propositions, differentiate yourself from competitors, and seize opportunities that others may overlook.
• Risk mitigation: Market research helps you anticipate market shifts and potential challenges. By identifying threats early, you can proactively adjust their strategies to mitigate risks and respond effectively to changing circumstances. This proactive approach is particularly valuable in volatile industries.
• Resource optimization: Conducting market research allows organizations to allocate their time, money and resources more efficiently. It ensures that investments are made in areas with the highest potential return on investment, reducing wasted resources and improving overall business performance.
• Adaptation to market trends: Markets evolve rapidly, driven by technological advancements, cultural shifts and changing consumer attitudes. Market research ensures that you stay ahead of these trends and adapt your offerings accordingly so you can avoid becoming obsolete. 

As you can see, market research empowers businesses to make data-driven decisions, cater to customer needs, outperform competitors, mitigate risks, optimize resources and stay agile in a dynamic marketplace. These benefits make it a huge industry; the global market research services market is expected to grow from $76.37 billion in 2021 to $108.57 billion in 2026 . Now, let’s dig into the different types of market research that can help you achieve these benefits.

Types of market research 

• Qualitative research
• Quantitative research
• Exploratory research
• Descriptive research
• Causal research
• Cross-sectional research
• Longitudinal research

Despite its advantages, 23% of organizations don’t have a clear market research strategy. Part of developing a strategy involves choosing the right type of market research for your business goals. The most commonly used approaches include:

1. Qualitative research

Qualitative research focuses on understanding the underlying motivations, attitudes and perceptions of individuals or groups. It is typically conducted through techniques like in-depth interviews, focus groups and content analysis — methods we’ll discuss further in the sections below. Qualitative research provides rich, nuanced insights that can inform product development, marketing strategies and brand positioning.

2. Quantitative research

Quantitative research, in contrast to qualitative research, involves the collection and analysis of numerical data, often through surveys, experiments and structured questionnaires. This approach allows for statistical analysis and the measurement of trends, making it suitable for large-scale market studies and hypothesis testing. While it’s worthwhile using a mix of qualitative and quantitative research, most businesses prioritize the latter because it is scientific, measurable and easily replicated across different experiments.

3. Exploratory research

Whether you’re conducting qualitative or quantitative research or a mix of both, exploratory research is often the first step. Its primary goal is to help you understand a market or problem so you can gain insights and identify potential issues or opportunities. This type of market research is less structured and is typically conducted through open-ended interviews, focus groups or secondary data analysis. Exploratory research is valuable when entering new markets or exploring new product ideas.

4. Descriptive research

As its name implies, descriptive research seeks to describe a market, population or phenomenon in detail. It involves collecting and summarizing data to answer questions about audience demographics and behaviors, market size, and current trends. Surveys, observational studies and content analysis are common methods used in descriptive research. 

5. Causal research

Causal research aims to establish cause-and-effect relationships between variables. It investigates whether changes in one variable result in changes in another. Experimental designs, A/B testing and regression analysis are common causal research methods. This sheds light on how specific marketing strategies or product changes impact consumer behavior.

6. Cross-sectional research

Cross-sectional market research involves collecting data from a sample of the population at a single point in time. It is used to analyze differences, relationships or trends among various groups within a population. Cross-sectional studies are helpful for market segmentation, identifying target audiences and assessing market trends at a specific moment.

7. Longitudinal research

Longitudinal research, in contrast to cross-sectional research, collects data from the same subjects over an extended period. This allows for the analysis of trends, changes and developments over time. Longitudinal studies are useful for tracking long-term developments in consumer preferences, brand loyalty and market dynamics.

Each type of market research has its strengths and weaknesses, and the method you choose depends on your specific research goals and the depth of understanding you’re aiming to achieve. In the following sections, we’ll delve into primary and secondary research approaches and specific research methods.

Primary vs. secondary market research

Market research of all types can be broadly categorized into two main approaches: primary research and secondary research. By understanding the differences between these approaches, you can better determine the most appropriate research method for your specific goals.

Primary market research 

Primary research involves the collection of original data straight from the source. Typically, this involves communicating directly with your target audience — through surveys, interviews, focus groups and more — to gather information. Here are some key attributes of primary market research:

• Customized data: Primary research provides data that is tailored to your research needs. You design a custom research study and gather information specific to your goals.
• Up-to-date insights: Because primary research involves communicating with customers, the data you collect reflects the most current market conditions and consumer behaviors.
• Time-consuming and resource-intensive: Despite its advantages, primary research can be labor-intensive and costly, especially when dealing with large sample sizes or complex study designs. Whether you hire a market research consultant, agency or use an in-house team, primary research studies consume a large amount of resources and time.

Secondary market research 

Secondary research, on the other hand, involves analyzing data that has already been compiled by third-party sources, such as online research tools, databases, news sites, industry reports and academic studies.

Here are the main characteristics of secondary market research:

• Cost-effective: Secondary research is generally more cost-effective than primary research since it doesn’t require building a research plan from scratch. You and your team can look at databases, websites and publications on an ongoing basis, without needing to design a custom experiment or hire a consultant. 
• Leverages multiple sources: Data tools and software extract data from multiple places across the web, and then consolidate that information within a single platform. This means you’ll get a greater amount of data and a wider scope from secondary research.
• Quick to access: You can access a wide range of information rapidly — often in seconds — if you’re using online research tools and databases. Because of this, you can act on insights sooner, rather than taking the time to develop an experiment. 

So, when should you use primary vs. secondary research? In practice, many market research projects incorporate both primary and secondary research to take advantage of the strengths of each approach.

One rule of thumb is to focus on secondary research to obtain background information, market trends or industry benchmarks. It is especially valuable for conducting preliminary research, competitor analysis, or when time and budget constraints are tight. Then, if you still have knowledge gaps or need to answer specific questions unique to your business model, use primary research to create a custom experiment. 

Market research methods

• Surveys and questionnaires
• Focus groups
• Observational research
• Online research tools
• Experiments
• Content analysis
• Ethnographic research

How do primary and secondary research approaches translate into specific research methods? Let’s take a look at the different ways you can gather data: 

1. Surveys and questionnaires

Surveys and questionnaires are popular methods for collecting structured data from a large number of respondents. They involve a set of predetermined questions that participants answer. Surveys can be conducted through various channels, including online tools, telephone interviews and in-person or online questionnaires. They are useful for gathering quantitative data and assessing customer demographics, opinions, preferences and needs. On average, customer surveys have a 33% response rate , so keep that in mind as you consider your sample size.

2. Interviews

Interviews are in-depth conversations with individuals or groups to gather qualitative insights. They can be structured (with predefined questions) or unstructured (with open-ended discussions). Interviews are valuable for exploring complex topics, uncovering motivations and obtaining detailed feedback. 

3. Focus groups

The most common primary research methods are in-depth webcam interviews and focus groups. Focus groups are a small gathering of participants who discuss a specific topic or product under the guidance of a moderator. These discussions are valuable for primary market research because they reveal insights into consumer attitudes, perceptions and emotions. Focus groups are especially useful for idea generation, concept testing and understanding group dynamics within your target audience.

4. Observational research

Observational research involves observing and recording participant behavior in a natural setting. This method is particularly valuable when studying consumer behavior in physical spaces, such as retail stores or public places. In some types of observational research, participants are aware you’re watching them; in other cases, you discreetly watch consumers without their knowledge, as they use your product. Either way, observational research provides firsthand insights into how people interact with products or environments.

5. Online research tools

You and your team can do your own secondary market research using online tools. These tools include data prospecting platforms and databases, as well as online surveys, social media listening, web analytics and sentiment analysis platforms. They help you gather data from online sources, monitor industry trends, track competitors, understand consumer preferences and keep tabs on online behavior. We’ll talk more about choosing the right market research tools in the sections that follow.

6. Experiments

Market research experiments are controlled tests of variables to determine causal relationships. While experiments are often associated with scientific research, they are also used in market research to assess the impact of specific marketing strategies, product features, or pricing and packaging changes.

7. Content analysis

Content analysis involves the systematic examination of textual, visual or audio content to identify patterns, themes and trends. It’s commonly applied to customer reviews, social media posts and other forms of online content to analyze consumer opinions and sentiments.

8. Ethnographic research

Ethnographic research immerses researchers into the daily lives of consumers to understand their behavior and culture. This method is particularly valuable when studying niche markets or exploring the cultural context of consumer choices.

How to do market research

• Set clear objectives
• Identify your target audience
• Choose your research methods
• Use the right market research tools
• Collect data
• Analyze data 
• Interpret your findings
• Identify opportunities and challenges
• Make informed business decisions
• Monitor and adapt

Now that you have gained insights into the various market research methods at your disposal, let’s delve into the practical aspects of how to conduct market research effectively. Here’s a quick step-by-step overview, from defining objectives to monitoring market shifts.

1. Set clear objectives

When you set clear and specific goals, you’re essentially creating a compass to guide your research questions and methodology. Start by precisely defining what you want to achieve. Are you launching a new product and want to understand its viability in the market? Are you evaluating customer satisfaction with a product redesign? 

Start by creating SMART goals — objectives that are specific, measurable, achievable, relevant and time-bound. Not only will this clarify your research focus from the outset, but it will also help you track progress and benchmark your success throughout the process. 

You should also consult with key stakeholders and team members to ensure alignment on your research objectives before diving into data collecting. This will help you gain diverse perspectives and insights that will shape your research approach.

2. Identify your target audience

Next, you’ll need to pinpoint your target audience to determine who should be included in your research. Begin by creating detailed buyer personas or stakeholder profiles. Consider demographic factors like age, gender, income and location, but also delve into psychographics, such as interests, values and pain points.

The more specific your target audience, the more accurate and actionable your research will be. Additionally, segment your audience if your research objectives involve studying different groups, such as current customers and potential leads.

If you already have existing customers, you can also hold conversations with them to better understand your target market. From there, you can refine your buyer personas and tailor your research methods accordingly.

3. Choose your research methods

Selecting the right research methods is crucial for gathering high-quality data. Start by considering the nature of your research objectives. If you’re exploring consumer preferences, surveys and interviews can provide valuable insights. For in-depth understanding, focus groups or observational research might be suitable. Consider using a mix of quantitative and qualitative methods to gain a well-rounded perspective. 

You’ll also need to consider your budget. Think about what you can realistically achieve using the time and resources available to you. If you have a fairly generous budget, you may want to try a mix of primary and secondary research approaches. If you’re doing market research for a startup , on the other hand, chances are your budget is somewhat limited. If that’s the case, try addressing your goals with secondary research tools before investing time and effort in a primary research study. 

4. Use the right market research tools

Whether you’re conducting primary or secondary research, you’ll need to choose the right tools. These can help you do anything from sending surveys to customers to monitoring trends and analyzing data. Here are some examples of popular market research tools:

• Market research software: Crunchbase is a platform that provides best-in-class company data, making it valuable for market research on growing companies and industries. You can use Crunchbase to access trusted, first-party funding data, revenue data, news and firmographics, enabling you to monitor industry trends and understand customer needs.

• Survey and questionnaire tools: SurveyMonkey is a widely used online survey platform that allows you to create, distribute and analyze surveys. Google Forms is a free tool that lets you create surveys and collect responses through Google Drive.
• Data analysis software: Microsoft Excel and Google Sheets are useful for conducting statistical analyses. SPSS is a powerful statistical analysis software used for data processing, analysis and reporting.
• Social listening tools: Brandwatch is a social listening and analytics platform that helps you monitor social media conversations, track sentiment and analyze trends. Mention is a media monitoring tool that allows you to track mentions of your brand, competitors and keywords across various online sources.
• Data visualization platforms: Tableau is a data visualization tool that helps you create interactive and shareable dashboards and reports. Power BI by Microsoft is a business analytics tool for creating interactive visualizations and reports.

5. Collect data

There’s an infinite amount of data you could be collecting using these tools, so you’ll need to be intentional about going after the data that aligns with your research goals. Implement your chosen research methods, whether it’s distributing surveys, conducting interviews or pulling from secondary research platforms. Pay close attention to data quality and accuracy, and stick to a standardized process to streamline data capture and reduce errors. 

6. Analyze data

Once data is collected, you’ll need to analyze it systematically. Use statistical software or analysis tools to identify patterns, trends and correlations. For qualitative data, employ thematic analysis to extract common themes and insights. Visualize your findings with charts, graphs and tables to make complex data more understandable.

If you’re not proficient in data analysis, consider outsourcing or collaborating with a data analyst who can assist in processing and interpreting your data accurately.

7. Interpret your findings

Interpreting your market research findings involves understanding what the data means in the context of your objectives. Are there significant trends that uncover the answers to your initial research questions? Consider the implications of your findings on your business strategy. It’s essential to move beyond raw data and extract actionable insights that inform decision-making.

Hold a cross-functional meeting or workshop with relevant team members to collectively interpret the findings. Different perspectives can lead to more comprehensive insights and innovative solutions.

8. Identify opportunities and challenges

Use your research findings to identify potential growth opportunities and challenges within your market. What segments of your audience are underserved or overlooked? Are there emerging trends you can capitalize on? Conversely, what obstacles or competitors could hinder your progress?

Lay out this information in a clear and organized way by conducting a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats. Jot down notes for each of these areas to provide a structured overview of gaps and hurdles in the market.

9. Make informed business decisions

Market research is only valuable if it leads to informed decisions for your company. Based on your insights, devise actionable strategies and initiatives that align with your research objectives. Whether it’s refining your product, targeting new customer segments or adjusting pricing, ensure your decisions are rooted in the data.

At this point, it’s also crucial to keep your team aligned and accountable. Create an action plan that outlines specific steps, responsibilities and timelines for implementing the recommendations derived from your research. 

10. Monitor and adapt

Market research isn’t a one-time activity; it’s an ongoing process. Continuously monitor market conditions, customer behaviors and industry trends. Set up mechanisms to collect real-time data and feedback. As you gather new information, be prepared to adapt your strategies and tactics accordingly. Regularly revisiting your research ensures your business remains agile and reflects changing market dynamics and consumer preferences.

Online market research sources

As you go through the steps above, you’ll want to turn to trusted, reputable sources to gather your data. Here’s a list to get you started:

• Crunchbase: As mentioned above, Crunchbase is an online platform with an extensive dataset, allowing you to access in-depth insights on market trends, consumer behavior and competitive analysis. You can also customize your search options to tailor your research to specific industries, geographic regions or customer personas.

• Academic databases: Academic databases, such as ProQuest and JSTOR , are treasure troves of scholarly research papers, studies and academic journals. They offer in-depth analyses of various subjects, including market trends, consumer preferences and industry-specific insights. Researchers can access a wealth of peer-reviewed publications to gain a deeper understanding of their research topics.
• Government and NGO databases: Government agencies, nongovernmental organizations and other institutions frequently maintain databases containing valuable economic, demographic and industry-related data. These sources offer credible statistics and reports on a wide range of topics, making them essential for market researchers. Examples include the U.S. Census Bureau , the Bureau of Labor Statistics and the Pew Research Center .
• Industry reports: Industry reports and market studies are comprehensive documents prepared by research firms, industry associations and consulting companies. They provide in-depth insights into specific markets, including market size, trends, competitive analysis and consumer behavior. You can find this information by looking at relevant industry association databases; examples include the American Marketing Association and the National Retail Federation .
• Social media and online communities: Social media platforms like LinkedIn or Twitter (X) , forums such as Reddit and Quora , and review platforms such as G2 can provide real-time insights into consumer sentiment, opinions and trends. 

Market research examples

At this point, you have market research tools and data sources — but how do you act on the data you gather? Let’s go over some real-world examples that illustrate the practical application of market research across various industries. These examples showcase how market research can lead to smart decision-making and successful business decisions.

Example 1: Apple’s iPhone launch

Apple ’s iconic iPhone launch in 2007 serves as a prime example of market research driving product innovation in tech. Before the iPhone’s release, Apple conducted extensive market research to understand consumer preferences, pain points and unmet needs in the mobile phone industry. This research led to the development of a touchscreen smartphone with a user-friendly interface, addressing consumer demands for a more intuitive and versatile device. The result was a revolutionary product that disrupted the market and redefined the smartphone industry.

Example 2: McDonald’s global expansion

McDonald’s successful global expansion strategy demonstrates the importance of market research when expanding into new territories. Before entering a new market, McDonald’s conducts thorough research to understand local tastes, preferences and cultural nuances. This research informs menu customization, marketing strategies and store design. For instance, in India, McDonald’s offers a menu tailored to local preferences, including vegetarian options. This market-specific approach has enabled McDonald’s to adapt and thrive in diverse global markets.

Example 3: Organic and sustainable farming

The shift toward organic and sustainable farming practices in the food industry is driven by market research that indicates increased consumer demand for healthier and environmentally friendly food options. As a result, food producers and retailers invest in sustainable sourcing and organic product lines — such as with these sustainable seafood startups — to align with this shift in consumer values. 

The bottom line? Market research has multiple use cases and is a critical practice for any industry. Whether it’s launching groundbreaking products, entering new markets or responding to changing consumer preferences, you can use market research to shape successful strategies and outcomes.

Market research templates

You finally have a strong understanding of how to do market research and apply it in the real world. Before we wrap up, here are some market research templates that you can use as a starting point for your projects:

• Smartsheet competitive analysis templates : These spreadsheets can serve as a framework for gathering information about the competitive landscape and obtaining valuable lessons to apply to your business strategy.
• SurveyMonkey product survey template : Customize the questions on this survey based on what you want to learn from your target customers.
• HubSpot templates : HubSpot offers a wide range of free templates you can use for market research, business planning and more.
• SCORE templates : SCORE is a nonprofit organization that provides templates for business plans, market analysis and financial projections.
• SBA.gov : The U.S. Small Business Administration offers templates for every aspect of your business, including market research, and is particularly valuable for new startups. 

Strengthen your business with market research

When conducted effectively, market research is like a guiding star. Equipped with the right tools and techniques, you can uncover valuable insights, stay competitive, foster innovation and navigate the complexities of your industry.

Throughout this guide, we’ve discussed the definition of market research, different research methods, and how to conduct it effectively. We’ve also explored various types of market research and shared practical insights and templates for getting started. 

Now, it’s time to start the research process. Trust in data, listen to the market and make informed decisions that guide your company toward lasting success.

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How to do market research: The complete guide for your brand

Written by by Jacqueline Zote

Published on  April 13, 2023

Reading time  10 minutes

Blindly putting out content or products and hoping for the best is a thing of the past. Not only is it a waste of time and energy, but you’re wasting valuable marketing dollars in the process. Now you have a wealth of tools and data at your disposal, allowing you to develop data-driven marketing strategies . That’s where market research comes in, allowing you to uncover valuable insights to inform your business decisions.

Conducting market research not only helps you better understand how to sell to customers but also stand out from your competition. In this guide, we break down everything you need to know about market research and how doing your homework can help you grow your business.

Table of contents:

What is market research?

Why is market research important, types of market research, where to conduct market research.

• Steps for conducting market research
• Tools to use for market research

Market research is the process of gathering information surrounding your business opportunities. It identifies key information to better understand your audience. This includes insights related to customer personas and even trends shaping your industry.

Taking time out of your schedule to conduct research is crucial for your brand health. Here are some of the key benefits of market research:

Understand your customers’ motivations and pain points

Most marketers are out of touch with what their customers want. Moreover, these marketers are missing key information on what products their audience wants to buy.

Simply put, you can’t run a business if you don’t know what motivates your customers.

And spoiler alert: Your customers’ wants and needs change. Your customers’ behaviors today might be night and day from what they were a few years ago.

Market research holds the key to understanding your customers better. It helps you uncover their key pain points and motivations and understand how they shape their interests and behavior.

Figure out how to position your brand

Positioning is becoming increasingly important as more and more brands enter the marketplace. Market research enables you to spot opportunities to define yourself against your competitors.

Maybe you’re able to emphasize a lower price point. Perhaps your product has a feature that’s one of a kind. Finding those opportunities goes hand in hand with researching your market.

Maintain a strong pulse on your industry at large

Today’s marketing world evolves at a rate that’s difficult to keep up with.

Fresh products. Up-and-coming brands. New marketing tools. Consumers get bombarded with sales messages from all angles. This can be confusing and overwhelming.

By monitoring market trends, you can figure out the best tactics for reaching your target audience.

Not everyone conducts market research for the same reason. While some may want to understand their audience better, others may want to see how their competitors are doing. As such, there are different types of market research you can conduct depending on your goal.

Interview-based market research allows for one-on-one interactions. This helps the conversation to flow naturally, making it easier to add context. Whether this takes place in person or virtually, it enables you to gather more in-depth qualitative data.

Buyer persona research

Buyer persona research lets you take a closer look at the people who make up your target audience. You can discover the needs, challenges and pain points of each buyer persona to understand what they need from your business. This will then allow you to craft products or campaigns to resonate better with each persona.

Pricing research

In this type of research, brands compare similar products or services with a particular focus on pricing. They look at how much those products or services typically sell for so they can get more competitive with their pricing strategy.

Competitive analysis research

Competitor analysis gives you a realistic understanding of where you stand in the market and how your competitors are doing. You can use this analysis to find out what’s working in your industry and which competitors to watch out for. It even gives you an idea of how well those competitors are meeting consumer needs.

Depending on the competitor analysis tool you use, you can get as granular as you need with your research. For instance, Sprout Social lets you analyze your competitors’ social strategies. You can see what types of content they’re posting and even benchmark your growth against theirs.

Brand awareness research

Conducting brand awareness research allows you to assess your brand’s standing in the market. It tells you how well-known your brand is among your target audience and what they associate with it. This can help you gauge people’s sentiments toward your brand and whether you need to rebrand or reposition.

If you don’t know where to start with your research, you’re in the right place.

There’s no shortage of market research methods out there. In this section, we’ve highlighted research channels for small and big businesses alike.

Considering that Google sees a staggering 8.5 billion searches each day, there’s perhaps no better place to start.

A quick Google search is a potential goldmine for all sorts of questions to kick off your market research. Who’s ranking for keywords related to your industry? Which products and pieces of content are the hottest right now? Who’s running ads related to your business?

For example, Google Product Listing Ads can help highlight all of the above for B2C brands.

The same applies to B2B brands looking to keep tabs on who’s running industry-related ads and ranking for keyword terms too.

There’s no denying that email represents both an aggressive and effective marketing channel for marketers today. Case in point, 44% of online shoppers consider email as the most influential channel in their buying decisions.

Looking through industry and competitor emails is a brilliant way to learn more about your market. For example, what types of offers and deals are your competitors running? How often are they sending emails?

Email is also invaluable for gathering information directly from your customers. This survey message from Asana is a great example of how to pick your customers’ brains to figure out how you can improve your quality of service.

Industry journals, reports and blogs

Don’t neglect the importance of big-picture market research when it comes to tactics and marketing channels to explore. Look to marketing resources such as reports and blogs as well as industry journals

Keeping your ear to the ground on new trends and technologies is a smart move for any business. Sites such as Statista, Marketing Charts, AdWeek and Emarketer are treasure troves of up-to-date data and news for marketers.

And of course, there’s the  Sprout Insights blog . And invaluable resources like The Sprout Social Index™  can keep you updated on the latest social trends.

Social media

If you want to learn more about your target market, look no further than social media. Social offers a place to discover what your customers want to see in future products or which brands are killin’ it. In fact, social media is become more important for businesses than ever with the level of data available.

It represents a massive repository of real-time data and insights that are instantly accessible. Brand monitoring and social listening are effective ways to conduct social media research . You can even be more direct with your approach. Ask questions directly or even poll your audience to understand their needs and preferences.

The 5 steps for how to do market research

Now that we’ve covered the why and where, it’s time to get into the practical aspects of market research. Here are five essential steps on how to do market research effectively.

Step 1: Identify your research topic

First off, what are you researching about? What do you want to find out? Narrow down on a specific research topic so you can start with a clear idea of what to look for.

For example, you may want to learn more about how well your product features are satisfying the needs of existing users. This might potentially lead to feature updates and improvements. Or it might even result in new feature introductions.

Similarly, your research topic may be related to your product or service launch or customer experience. Or you may want to conduct research for an upcoming marketing campaign.

Step 2: Choose a buyer persona to engage

If you’re planning to focus your research on a specific type of audience, decide which buyer persona you want to engage. This persona group will serve as a representative sample of your target audience.

Engaging a specific group of audience lets you streamline your research efforts. As such, it can be a much more effective and organized approach than researching thousands (if not millions) of individuals.

You may be directing your research toward existing users of your product. To get even more granular, you may want to focus on users who have been familiar with the product for at least a year, for example.

Step 3: Start collecting data

The next step is one of the most critical as it involves collecting the data you need for your research. Before you begin, make sure you’ve chosen the right research methods that will uncover the type of data you need. This largely depends on your research topic and goals.

Remember that you don’t necessarily have to stick to one research method. You may use a combination of qualitative and quantitative approaches. So for example, you could use interviews to supplement the data from your surveys. Or you may stick to insights from your social listening efforts.

To keep things consistent, let’s look at this in the context of the example from earlier. Perhaps you can send out a survey to your existing users asking them a bunch of questions. This might include questions like which features they use the most and how often they use them. You can get them to choose an answer from one to five and collect quantitative data.

Plus, for qualitative insights, you could even include a few open-ended questions with the option to write their answers. For instance, you might ask them if there’s any improvement they wish to see in your product.

Step 4: Analyze results

Once you have all the data you need, it’s time to analyze it keeping your research topic in mind. This involves trying to interpret the data to look for a wider meaning, particularly in relation to your research goal.

So let’s say a large percentage of responses were four or five in the satisfaction rating. This means your existing users are mostly satisfied with your current product features. On the other hand, if the responses were mostly ones and twos, you may look for opportunities to improve. The responses to your open-ended questions can give you further context as to why people are disappointed.

Step 5: Make decisions for your business

Now it’s time to take your findings and turn them into actionable insights for your business. In this final step, you need to decide how you want to move forward with your new market insight.

What did you find in your research that would require action? How can you put those findings to good use?

The market research tools you should be using

To wrap things up, let’s talk about the various tools available to conduct speedy, in-depth market research. These tools are essential for conducting market research faster and more efficiently.

Social listening and analytics

Social analytics tools like Sprout can help you keep track of engagement across social media. This goes beyond your own engagement data but also includes that of your competitors. Considering how quickly social media moves, using a third-party analytics tool is ideal. It allows you to make sense of your social data at a glance and ensure that you’re never missing out on important trends.

Email marketing research tools

Keeping track of brand emails is a good idea for any brand looking to stand out in its audience’s inbox.

Tools such as MailCharts ,  Really Good Emails  and  Milled  can show you how different brands run their email campaigns.

Meanwhile, tools like  Owletter  allow you to monitor metrics such as frequency and send-timing. These metrics can help you understand email marketing strategies among competing brands.

Content marketing research

If you’re looking to conduct research on content marketing, tools such as  BuzzSumo  can be of great help. This tool shows you the top-performing industry content based on keywords. Here you can see relevant industry sites and influencers as well as which brands in your industry are scoring the most buzz. It shows you exactly which pieces of content are ranking well in terms of engagements and shares and on which social networks.

SEO and keyword tracking

Monitoring industry keywords is a great way to uncover competitors. It can also help you discover opportunities to advertise your products via organic search. Tools such as  Ahrefs  provide a comprehensive keyword report to help you see how your search efforts stack up against the competition.

Competitor comparison template

For the sake of organizing your market research, consider creating a competitive matrix. The idea is to highlight how you stack up side-by-side against others in your market. Use a  social media competitive analysis template  to track your competitors’ social presence. That way, you can easily compare tactics, messaging and performance. Once you understand your strengths and weaknesses next to your competitors, you’ll find opportunities as well.

Customer persona creator

Finally, customer personas represent a place where all of your market research comes together. You’d need to create a profile of your ideal customer that you can easily refer to. Tools like  Xtensio  can help in outlining your customer motivations and demographics as you zero in on your target market.

Build a solid market research strategy

Having a deeper understanding of the market gives you leverage in a sea of competitors. Use the steps and market research tools we shared above to build an effective market research strategy.

But keep in mind that the accuracy of your research findings depends on the quality of data collected. Turn to Sprout’s social media analytics tools to uncover heaps of high-quality data across social networks.

• Marketing Disciplines
• Social Media Strategy

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Sprout Social helps you understand and reach your audience, engage your community and measure performance with the only all-in-one social media management platform built for connection.

Market Research: A How-To Guide and Template

Discover the different types of market research, how to conduct your own market research, and use a free template to help you along the way.

MARKET RESEARCH KIT

5 Research and Planning Templates + a Free Guide on How to Use Them in Your Market Research

Published: 02/21/24

Today's consumers have a lot of power. As a business, you must have a deep understanding of who your buyers are and what influences their purchase decisions.

Enter: Market Research.

Whether you're new to market research or not, I created this guide to help you conduct a thorough study of your market, target audience, competition, and more. Let’s dive in.

Table of Contents

What is market research?

Primary vs. secondary research, types of market research, how to do market research, market research report template, market research examples.

Market research is the process of gathering information about your target market and customers to verify the success of a new product, help your team iterate on an existing product, or understand brand perception to ensure your team is effectively communicating your company's value effectively.

Market research can answer various questions about the state of an industry. But if you ask me, it's hardly a crystal ball that marketers can rely on for insights on their customers.

Market researchers investigate several areas of the market, and it can take weeks or even months to paint an accurate picture of the business landscape.

However, researching just one of those areas can make you more intuitive to who your buyers are and how to deliver value that no other business is offering them right now.

How? Consider these two things:

• Your competitors also have experienced individuals in the industry and a customer base. It‘s very possible that your immediate resources are, in many ways, equal to those of your competition’s immediate resources. Seeking a larger sample size for answers can provide a better edge.
• Your customers don't represent the attitudes of an entire market. They represent the attitudes of the part of the market that is already drawn to your brand.

The market research services market is growing rapidly, which signifies a strong interest in market research as we enter 2024. The market is expected to grow from roughly $75 billion in 2021 to $90.79 billion in 2025 .

Free Market Research Kit

• SWOT Analysis Template
• Survey Template
• Focus Group Template

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Why do market research?

Market research allows you to meet your buyer where they are.

As our world becomes louder and demands more of our attention, this proves invaluable.

By understanding your buyer's problems, pain points, and desired solutions, you can aptly craft your product or service to naturally appeal to them.

Market research also provides insight into the following:

• Where your target audience and current customers conduct their product or service research
• Which of your competitors your target audience looks to for information, options, or purchases
• What's trending in your industry and in the eyes of your buyer
• Who makes up your market and what their challenges are
• What influences purchases and conversions among your target audience
• Consumer attitudes about a particular topic, pain, product, or brand
• Whether there‘s demand for the business initiatives you’re investing in
• Unaddressed or underserved customer needs that can be flipped into selling opportunity
• Attitudes about pricing for a particular product or service

Ultimately, market research allows you to get information from a larger sample size of your target audience, eliminating bias and assumptions so that you can get to the heart of consumer attitudes.

As a result, you can make better business decisions.

To give you an idea of how extensive market research can get , consider that it can either be qualitative or quantitative in nature — depending on the studies you conduct and what you're trying to learn about your industry.

Qualitative research is concerned with public opinion, and explores how the market feels about the products currently available in that market.

Quantitative research is concerned with data, and looks for relevant trends in the information that's gathered from public records.

That said, there are two main types of market research that your business can conduct to collect actionable information on your products: primary research and secondary research.

Primary Research

Primary research is the pursuit of first-hand information about your market and the customers within your market.

It's useful when segmenting your market and establishing your buyer personas.

Primary market research tends to fall into one of two buckets:

• Exploratory Primary Research: This kind of primary market research normally takes place as a first step — before any specific research has been performed — and may involve open-ended interviews or surveys with small numbers of people.
• Specific Primary Research: This type of research often follows exploratory research. In specific research, you take a smaller or more precise segment of your audience and ask questions aimed at solving a suspected problem.

Secondary Research

Secondary research is all the data and public records you have at your disposal to draw conclusions from (e.g. trend reports, market statistics, industry content, and sales data you already have on your business).

Secondary research is particularly useful for analyzing your competitors . The main buckets your secondary market research will fall into include:

• Public Sources: These sources are your first and most-accessible layer of material when conducting secondary market research. They're often free to find and review — like government statistics (e.g., from the U.S. Census Bureau ).
• Commercial Sources: These sources often come in the form of pay-to-access market reports, consisting of industry insight compiled by a research agency like Pew , Gartner , or Forrester .
• Internal Sources: This is the market data your organization already has like average revenue per sale, customer retention rates, and other historical data that can help you draw conclusions on buyer needs.
• Focus Groups
• Product/ Service Use Research
• Observation-Based Research
• Buyer Persona Research
• Market Segmentation Research
• Pricing Research
• Competitive Analysis Research
• Customer Satisfaction and Loyalty Research
• Brand Awareness Research
• Campaign Research

1. Interviews

Interviews allow for face-to-face discussions so you can allow for a natural flow of conversation. Your interviewees can answer questions about themselves to help you design your buyer personas and shape your entire marketing strategy.

2. Focus Groups

Focus groups provide you with a handful of carefully-selected people that can test out your product and provide feedback. This type of market research can give you ideas for product differentiation.

3. Product/Service Use Research

Product or service use research offers insight into how and why your audience uses your product or service. This type of market research also gives you an idea of the product or service's usability for your target audience.

4. Observation-Based Research

Observation-based research allows you to sit back and watch the ways in which your target audience members go about using your product or service, what works well in terms of UX , and which aspects of it could be improved.

5. Buyer Persona Research

Buyer persona research gives you a realistic look at who makes up your target audience, what their challenges are, why they want your product or service, and what they need from your business or brand.

6. Market Segmentation Research

Market segmentation research allows you to categorize your target audience into different groups (or segments) based on specific and defining characteristics. This way, you can determine effective ways to meet their needs.

7. Pricing Research

Pricing research helps you define your pricing strategy . It gives you an idea of what similar products or services in your market sell for and what your target audience is willing to pay.

8. Competitive Analysis

Competitive analyses give you a deep understanding of the competition in your market and industry. You can learn about what's doing well in your industry and how you can separate yourself from the competition .

9. Customer Satisfaction and Loyalty Research

Customer satisfaction and loyalty research gives you a look into how you can get current customers to return for more business and what will motivate them to do so (e.g., loyalty programs , rewards, remarkable customer service).

10. Brand Awareness Research

Brand awareness research tells you what your target audience knows about and recognizes from your brand. It tells you about the associations people make when they think about your business.

11. Campaign Research

Campaign research entails looking into your past campaigns and analyzing their success among your target audience and current customers. The goal is to use these learnings to inform future campaigns.

• Define your buyer persona.
• Identify a persona group to engage.
• Prepare research questions for your market research participants.
• List your primary competitors.
• Summarize your findings.

1. Define your buyer persona.

You have to understand who your customers are and how customers in your industry make buying decisions.

This is where your buyer personas come in handy. Buyer personas — sometimes referred to as marketing personas — are fictional, generalized representations of your ideal customers.

Use a free tool to create a buyer persona that your entire company can use to market, sell, and serve better.

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5 Challenges Marketers Face in Understanding Audiences [New Data + Market Researcher Tips]

Causal Research: The Complete Guide

Total Addressable Market (TAM): What It Is & How You Can Calculate It

What Is Market Share & How Do You Calculate It?

3 Ways Data Privacy Changes Benefit Marketers [New Data]

Free Guide & Templates to Help Your Market Research

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

How to Do Market Research

Noah Parsons

18 min. read

Updated May 10, 2024

One of the biggest and most expensive mistakes I’ve made in my business career could have been avoided by doing a little homework.

In the late 2000s, my team and I came up with what we thought was a great idea for a product . Tons of businesses would need it, and it was almost guaranteed to be a huge hit!

But, we neglected to do our market research. 

We ended up with a product searching for a market instead of figuring out who our ideal customer was and building a product specifically for them.

You can avoid making this same mistake. 

Let’s learn from my experience and go over the basics of how to conduct market research. 

• What is market research?

Market research is the process of gathering information about your potential customers. 

It helps you define your target market, craft customer personas , and understand the viability of your business, by answering questions like: 

• Who are your customers?
• What are their buying and shopping habits?
• How many of them are there? 

By exploring your ideal customers’ problems, desires, and current solutions, you can build your product, service, and overall business strategy to better serve them.

• Why is market research important?

When starting a business , conducting market research to get to know your customers is one of the most important things you can do. 

If you don’t understand your customer, you don’t know:

• How you can solve their problems . 
• What kind of marketing messages and advertising work. 
• If your product or service is actually something your customers will spend money on.

Beyond that, market research can help you:

• Reduce risk: Inform critical decisions with real-world data.
• Understand your competitors: Know how competitors and alternatives to your business represent themselves in pricing, quality, and placement.
• Identify market trends: Stay ahead by spotting emerging trends and shifts in the market.
• Enhance customer experience: Improve customer satisfaction by addressing their pain points.

Gathering data on your customers should become a regular practice for your business. 

The more in tune you are with your customers, the better you can serve them and the more likely you are to grow your business. You should never just let assumptions about your customers drive business decisions.

Developing primary and secondary data through market research is how you get an accurate reflection of your customers’ needs.

Further Reading: 6 things to consider before entering a market

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Things to consider before conducting market research

Market research can be incredibly time-consuming (and even a waste of time) when done without the right preparation.

Here are a few questions to answer to help ensure you make the most of your efforts.

What are your objectives?

A research objective is a stated purpose that explains why you’re doing market research. It should include a specific result you intend to achieve, using available resources within a certain time frame. 

Without an objective, you’ll pour over a sea of data without knowing what you’re looking for. And if you speak to customers without a goal, you’ll struggle to ask useful questions and dig deeper.

Don’t overthink it.

Your objective should be easy to understand and connected to your business needs. 

For example, if you’re just starting, your objective may be to verify before investing in production if your chosen customer base is interested and willing to purchase your product or service.

What research methods will you use?

You don’t need to have every question prepped or a list of people to interview at the start—but you should know what research methods you intend to use.

The research options you choose will impact the data you collect, and the time it will take to complete it. By doing this ahead of time, you’ll be better prepared to create a timeline of when to take specific actions and what milestones to hit to stay on track.

What tools and resources do you need?

You likely won’t know every resource you’ll need until you start doing research. However, that doesn’t mean you can’t be proactive. 

If you know the methods you’ll be using, research what tools you’ll need to:

• Conduct interviews
• Create surveys
• Observe customer behavior

If you use third-party data, identify reputable sources to provide the information you want.

• How to conduct market research

Every business will do market research differently. The sources, the methods of data collection, and how you’ll use that data are entirely up to you. 

However, the core steps you should take remain the same. Here’s my recommendation for how to structure your research efforts:

1. Start by identifying your target market

Imagine that someone walks into your business, reaches out online, or picks up the phone and calls you. 

It’s your perfect customer: someone who has the problem that you solve and is willing to spend money on your solution. 

Now imagine the details about this person. Who are they? Can you describe them?

Ideal customers and common traits

This “ideal customer” is your target market . Your business might have several target markets, but it will usually serve you best to keep your list of target customers to two or three.

Each of your target markets should share common traits . These might be demographic traits such as: 

• Income levels
• Locations 

They might be psychographic traits—groups of people that like the same things or have similar interests. Or, your target market might be a certain type of employee at another company, such as a Chief Technology Officer or head of marketing.

Most often, target markets are blends of demographic and psychographic groups. For example, you might develop a new type of shoe targeted at female triathletes. Or you might be opening a hair salon targeting urban, hipster men.

Further Reading: Why niche audiences are important and how to find yours

Market segmentation

Creating multiple target markets for your company is doing what’s called “ market segmentation .” 

This sounds complex, but all you’re doing is dividing your target markets into different groups you hope to sell to. Each market segment might have different characteristics and buy your product or service for different reasons.

You might create different marketing campaigns or customize your product or service for each segment.

Further Reading:

Target marketing explained

Your target market is your ideal customer who needs your solution. They share common traits like age, gender, income, interests, or job roles. To start, focus your efforts on one target customer.

Consider focusing on a younger audience

Younger consumers are often overlooked in favor of older customers who currently make purchasing decisions. However, if you can crack the interests of a younger audience, it may lead to long-term loyalty.

2. Find out if your market is big enough

Are there enough potential customers to sustain you and your competitors? If the answer is no, then you need to consider changing your product or service offering.

Use the attributes you defined in the target market step and determine how many people meet your demographic, psychographic, or location criteria. I’ve got some links to resources to help you figure this out at the end of this article.

For example: If your target market only has a few thousand potential customers, you must either sell to them frequently or at a fairly high price to create a sustainable, profitable business.

Further Reading: How to use TAM, SAM, SOM to determine market size

If you are targeting an existing market with established competitors, you do what’s called industry research . 

For example, perhaps you are building a new company in the market for sports drinks or the market for cell phones. In cases like this, understanding how much people buy of existing offerings will give you the best sense of your potential market size. 

In this case, you want to look for industry reports and read trade publications for your industry. These publications often summarize the market size.

Further Reading: Differences between industry and market research explained

3. Talk to your potential customers

Once you have identified your target market, or at least made a good guess at who your target market is, you need to take the most important step in this entire market research process. 

You need to get up from your desk, leave behind your computer, and go outside. That’s right, you need to go and talk to people in your potential target markets. 

Yes, you can do online surveys and other research, but that’s no substitute for actually talking to potential customers. 

You’ll gain more insight into your customers through first-hand accounts than any survey will ever tell you.

Do this one thing, and you’ll be miles ahead of your competition. Why? Because most people skip this step. It’s intimidating to talk to strangers. What if they don’t want to buy what you plan on making?

So, don’t be like most entrepreneurs (including me!) and skip this critical step. 

It can mean the difference between success and failure. Getting this step done early will help you refine your business model and make a clear impact on your future success.

Further Reading: How to Create a Market Penetration Strategy  

4. Identify and analyze your competitors

Part of understanding your customers is knowing what solutions they already use. 

These are your competitors, and they may directly compete with you or provide a reasonable substitution customers settle for. 

You’ll understand how to position your business to take advantage of potential opportunities and mitigate risks by analyzing who they are, what they do, and how customers respond.  

Document your known competitors

To keep things simple, start by listing your known competitors . Account for businesses that offer a similar product/service, and those that indirectly compete with their solution or industry expertise. 

Example:   You operate an outdoor goods retail store. Your mission is to provide hands-on direction for customers to find camping, hiking, and survival gear that they will love. You offer a wide selection of well-known brands, local options, and in-house creations.

Your direct competitors are the large brands themselves, less niche retail stores, and online sellers. You must also account for other businesses that provide expert-level information on outdoor activities. 

They likely don’t sell the products, but may provide guided tours, reviews, or other insights that overlap with your business. 

Analyze your competitors

Once you have your list, it’s time to get to know the competition. Check out their websites, social media, customer reviews, and news stories from the last year. 

Sign up for their email lists, visit their stores (if they have them), and track down any industry reports that give you an idea of their size, performance, and strategic direction.

You don’t have to do everything I just listed. But you must go deep enough to clearly understand your competitors and why potential customers may choose them over you. 

It may even be useful to use the SWOT analysis framework to provide additional structure for your research. 

Further Reading: 10 ways to determine what your competitors are doing

5. Document your findings

The final (and easiest) step is to document your findings. How formal your documentation is will depend on how you plan on using it.

If you only need to share your findings with business partners and others in your business, then you can probably communicate fairly informally. 

However, if you’re looking for investors for your business, you may need to write a more formal market analysis and do a market forecast.

Presenting your market research

The single piece of documentation that every business should create is a buyer persona . 

A persona is a description of a person that hits on all of the key aspects of your target market. And, just like you might have several target markets for your business, you might have several different buyer personas.

Creating a buyer persona converts your target marketing information from dry research into a living, breathing person. 

For LivePlan , we’ve created a persona named Garrett, who drives much of our product development. Garrett embodies the attributes of our ideal customer.

When we think about creating a new marketing campaign or developing a new feature for our products, we ask, “Would Garrett like this?” You can read about the process we used to create Garrett in this article.

How to create a detailed user or buyer persona

Visualizing your customers when reviewing a sea of data can be tricky. So, create a customer persona and turn that data into the living, breathing person you imagine your customer to be.

LivePlan customer persona example

Check out this real-world customer persona used by the business planning and management software LivePlan.

When should you conduct market research?

Market research is vital when starting a business. It will improve your product or service and help you avoid starting a business without customers.

However, market research shouldn’t be exclusive to new businesses. Conditions are bound to change, and you must stay up-to-date on your industry , competitors, and emerging trends. 

Here are a few other business events where market research can make a difference:

• Launching a new product/service or updating current features.
• Expanding into a new market.
• Consistent dips in financial performance. 
• Widespread market changes.
• New competitors enter the market.

Primary vs secondary market research explained

No matter how you decide to gather information, the methods can be boiled down to primary and secondary research. As a business owner, it’s worth understanding the basics of each type of research and how they work together.

What is primary research?

Primary research is the first-hand information collected (by you or someone you’ve hired) from customers within your market. Primary research cuts out the middleman and ensures that the results you are gathering are straight from the source. 

That’s why you should conduct primary research when validating your business idea. 

Furthermore, it can be broken down into two result categories — exploratory and specific.

Exploratory primary research

Exploratory primary research involves non-quantifiable customer feedback. This means you’re not trying to measure results but to record interest or an emotional response. You’ll accomplish this by asking open-ended questions in formats like focus groups or 1:1 interviews.

Asking for open-ended feedback ensures that the results are unfiltered and honest. You aren’t unintentionally leading or hindering their responses. 

Specific primary research

Specific research allows you to dig deeper into issues or opportunities you identified through your exploratory research. 

You may target a smaller segment of customers from the larger group you’ve spoken to, conduct additional interviews, or shift to more quantifiable research such as beta-testing or surveys.

What is secondary research?

Secondary research covers every other piece of data you have available. This includes resources such as:

• Public sources: Typically free and highly accessible information gathered through government-sponsored research projects. 
• Commercial sources: Research studies conducted by private organizations regarding the state of specific markets, industries, or innovations. 
• Internal sources: Data you have collected through everyday business operations. Everything from financial statements to Analytics reports can qualify.

Which is better: primary or secondary research?

Neither primary nor secondary research is better than the other. They simply have different use cases. So, aim for a healthy mix.

When starting, focus on conducting primary research to ensure you get the necessary information to validate your business. 

Compare those findings to secondary resources such as industry benchmarks , market reports, and internal data you’ve collected. 

You’ll likely leverage secondary research more consistently as you grow—but it’s wise to run primary research initiatives occasionally, especially when approaching a strategic decision. Only with both types of research will you fully understand the story of your place in the market. 

Further Reading: Types of market research explained and how to use them

Types of market research to try

1. face-to-face, remote, or phone interviews.

I mentioned this before, but the best thing you can do is get out and talk to your potential or current customers, virtually or in person. 

Be sure you have a refined set of closed and open-ended questions ready, and consider the interviewee’s tone, body language, and interest alongside their answers.

2. Focus groups

Similar to interviews, focus groups can provide direct feedback from your customer mix. Rather than receiving answers or reactions in a bubble, you get to see how customers may act when influenced by others in the market. You can simply ask questions, run product tests, or have them watch a demo.

3. Observational research

Observational research is about watching how potential customers engage with your product or service. You’re attempting to understand what roadblocks or frustrations they may be hitting, what functionality seems to resonate, what they want from your business, etc.

To conduct observational research, you can set up an official testing environment that you control. Or you can just go out and observe your potential customers and see how they shop, make purchases, and what factors encourage or deter them from purchasing.

4. Pricing research

You may include questions about pricing when conducting interviews or focus groups, but you can also specifically develop research around pricing. 

This can be anything from testing different pricing options on your website ( A/B testing ), offering discounts to exclusive segments, or running ad campaigns with different pricing positions. The goal is to understand what your customers are willing to pay and what they consider a fair price .

5. Brand awareness research

This type of research is about understanding if your target market knows about your brand and how much they happen to know. What do they associate with your brand? What competitors come to mind first?

It’s a great way to understand your current market penetration and who your competitors are. You can integrate this type of questioning within your other tests or conduct surveys to get this data.

6. Customer interest

As part of your initial validation process, you should try to understand current customer interest. At its most basic, you’re asking: Are customers willing to buy your product or service? 

You can simply ask questions and look for yes or no answers, but it may be wise to run a limited-time sale or pre-sale to actually line up initial revenue for your business. 

You can offer the chance to purchase during your interviews or focus groups, as well as run pre-orders through a simple landing page or by measuring engagement with a paid ad campaign.

7. Customer satisfaction

This research will help you understand current customer loyalty and what it will take to get customers to come back. Again, you can do this research within focus groups or interviews. 

Still, you can also test loyalty programs, limited-time promotions, customer service initiatives, and other ways to improve customer loyalty. 

Market research tools and resources

Finding market research data depends on the market you are targeting and the industry you are in. 

Here are a few of my go-to sources for market research:

• U.S. Census : If you’re opening a business in the U.S., the U.S. Census site is a goldmine of information. Check out the Census Business Builder to get population data and data on how much people spend in a given area on your type of business.
• Bureau of Labor Statistics : Another U.S.-centric resource, but a fantastic site for information on specific industries: hiring and expense trends as well as industry sizes. If your target market is other businesses, this is a good place to look for data.
• Consumer Expenditure Survey : If you want to know what people spend their money on, this is your source.
• SBDCNet Business Snapshots : You’ll find a great collection of industry profiles that describe how industries are growing and changing, who their customers are, and what typical startup costs are. You should also check out their list of market research resources, sorted by industry .
• ChatGPT : All data generated from AI models like ChatGPT must be verified. But it can still be an excellent market research assistant. With the right prompting, you can generate customer segments, understand their nuances, and prioritize them based on your needs.

Further Reading: 21 best market research resources for small businesses

Market research informs your startup decisions

Effective market research can help you avoid costly mistakes early on in the life of your business. 

However, it should remain a core practice that you regularly implement when approaching crucial business decisions, growth opportunities, or just to reaffirm your understanding of the market. 

Revisit this framework whenever you’re approaching a key strategic decision . Confirm that you still understand your customers, competitors, and where the market is headed.

Then use this information to inform your planning and adjust your strategy if necessary.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Before conducting market research
• When to conduct market research
• Primary vs secondary research
• Types of market research
• Tools and resources
• Market research informs your decisions

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How to Conduct Market Research for Startups

With 50% of new businesses failing within the first five years of operation, startups need to develop a deep understanding of their customer base quickly in order to thrive. Successful new business ventures strategically begin by gathering accurate and thorough information about their industry to identify the best path ahead. Conducting market research for startups is a key step toward meeting customer needs and strengthening marketing messaging.

Market research brings together important details about a business's customers, competition, and industry. The results serve as a tool in a startup’s business planning process as it evolves. Analyzing the findings can help determine the viability of a business concept and identify areas for adjustment to improve performance, profitability, and attract investors.

“Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.” Dr. Elaine Young, Champlain College Online

As noted by Dr. Elaine Young , professor and program director of marketing communication at Champlain College Online, “Startups need market research so that they can gain insight into the behaviors and values of their target customers. Just because you think your startup idea is amazing, doesn't mean that consumers will. Without market research, a startup is just making guesses. Listening to your prospective customers will help you align your product/service and marketing messaging to address their needs.”

Table of Contents

What is market research?

Why is it valuable for startups, types of market research, methods of market research, how to do market research for startups, sample questions to ask customers.

Market research is defined as the process of collecting, analyzing, and interpreting a broad set of information about a specific market or industry. The research might focus on:

• A potential product or service for that market
• Existing and/or potential customers for the product or service
• The needs, purchase habits, characteristics, and location of your target market
• Competitors in your industry
• Trends within your market or industry as a whole

As a business strategy, market research enables companies to make actionable decisions according to data-based findings. These measurable statistics can be gathered through a variety of methods, which we will explore below.

Startups benefit from market research in multiple ways. With so much time, energy, and funds invested in a startup, taking steps to strengthen the concept and connection to your target audience is critical to survival and the bottom line. 

The market research process delivers value to startups by:

• Allowing you to test the ideas and concepts behind your product or service
• Enticing investors with data showing the projected profitability of your venture 
• Providing statistical evidence to potentially support your business concept or encourage you to adapt it to better meet the needs of your target market
• Helping to clarify exactly who your customers are
• Serving as evidence to investors of an entrepreneur’s commitment to improving a business based on current market conditions
• Increasing the odds of   success of your startup

“Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience.”

Adrienne Wallace, Grand Valley State University

The American Marketing Association confirms that market research can directly increase your bottom line. And trusted market research findings can also speed up the process of getting investors on board with your startup venture.

“Startups can't begin with just a hope and a prayer,” notes Adrienne Wallace , associate professor at Grand Valley State University. “Market research can help founders focus their energy, enthusiasm, and resources toward a specific segment and the real target audience instead of making the age-old error of ‘everyone is the target’ because it simply can't be that for efforts to be fruitful.”

There are two types of market research used most in the business world today: primary and secondary. They can be used individually but are often combined to create a broader understanding of your target market.

Primary research

Primary research involves collecting data directly from your target market. This is often achieved through the use of surveys, interviews, and focus groups. The findings can provide a comprehensive understanding of your customer base’s needs and preferences.

Secondary research

Secondary research requires examining existing data collected by third parties. Examples of potential data sources include news media, industry reports, proprietary data from other companies, academic journals, or public databases. Although targeted data is not always available for your particular industry, secondary research enables you to gain insight and understanding about an industry overall.

Choosing a specific method of market research — either quantitative or qualitative — will determine the type of data collected in your research.

Quantitative research

Quantitative market research gathers large numerical datasets that can be used in statistical analysis. These results offer more accurate snapshots of industry trends and market challenges. Common methods of collecting quantitative research data are through surveys, questionnaires, and polls.

Qualitative research

Qualitative market research strives to identify the reasons behind customers’ buying habits, as well as their needs, wants, and overall customer satisfaction . These results can help clarify the “why” behind your target market’s behaviors and feelings. Focus groups, in-depth interviews, and online bulletin boards are typical methods for conducting qualitative market research.

Generally, quantitative market research is more commonly utilized than qualitative market research because it is more scientific, unbiased, and more easily plicated in future studies. In 2019, 61% of the money spent on market research in the United States went toward quantitative research, with only 12% spent on qualitative research.

Conducting market research is not a quick process, so it requires thoughtful planning. You may handle this research on your own or hire a third-party market research company to manage the process on your behalf. The steps below will guide you through developing a market research strategy that benefits your startup.

Step 1. Define your research purpose

The first step in market research for startups is to determine what questions you hope to answer through this research. From those questions, you can develop projected results that will help reveal the overall purpose of your research. Understanding the purpose from the beginning will be an asset in identifying the best approach to selecting subjects, composing questions, and testing product designs.

Examples of market research purpose include:

• Confirming consumers’ biggest pain point and whether your product meets their needs
• Tracking and predicting relevant industry trends
• Determining consumer spending capacity for a product/service
• Gauging the market infiltration of your competitors

Step 2. Study your target market and competitors closely

It’s important to take time to study existing information about your target market, your competitors, and your target demographic. Growing your knowledge base about all of these factors in advance will strengthen the relevancy of your research.

When working on demographics, a buyer persona template can be a useful tool to help segment the consumer audience into smaller groups for better targeting. Understanding each group’s behaviors and motivation can lead to research findings that resonate deeply with your customer base.

Step 3. Choose the right type and method for your needs

The best type of market research for your business will depend on the purpose you aim to achieve. If your goal is a broad-scope industry view, secondary research examining existing data may provide you with all the information you need. But if your strategy is to clarify specific details about your customer base, you will need to collect new data through primary research. 

The ideal method for data collection also depends on the end goal. Quantitative research methods such as surveys create data useful in making market predictions. Qualitative research methods like focus groups and in-depth interviews offer more personal and subjective responses from participants. Such responses are valuable when seeking direct consumer insight on your product or service and on brand awareness.

Step 4. Recruit appropriate research subjects

If you are pursuing primary research, the subjects involved in your study should be capable of providing insights that are directly relevant and valuable to your market research goals. Recruitment methods can vary from social media posts to hiring third-party market research firms and incentivizing participation.

Seek out existing customers, former customers, and potential customers to create a full spectrum view of your market and product. Other potential sources for research participants include:

• Recent customers
• Customers who did not complete their purchase
• Word of mouth among both personal and professional networks 

Step 5. Conduct your research

Execute your market research plan based on the method you identified in Step 3. Appoint someone not deeply connected with the project planning as the point person for interviews or focus groups in an effort to reduce potential bias. When creating surveys, strive to incorporate neutral (non-leading) language as a way to craft unbiased research questions.

Christina Inge , an instructor and curriculum designer at Northeastern University, suggests an effective research technique called customer discovery. “It requires asking customers what their needs are,” she says, “rather than showing them your product or service and asking for their reactions. This can help you get to the heart of what your customers need, leading to better product market fit, faster.”

Step 6. Analyze your results

Once you’ve collected and organized all of your data, analyze it for relevant trends and patterns. Any qualitative data, such as feedback from focus groups or interviews, can be interpreted quantitatively by noting response ratios amongst the participants. Examine your findings for insights that offer actionable next steps.

One famous example of a startup that pivoted toward success as a result of closely analyzing the market research on their target market is Tune In Hook Up. As an online video dating site that wasn’t seeing much traffic, their research revealed that users struggled to share videos easily with one another. Based on their findings, they decided to shift away from romance and focus on the videos, renaming themselves YouTube.

Step 7. Create an actionable report from your findings

Gather your findings into a report that outlines the recommended actions necessary to address the market research results. Whether the data provides positive or negative insights, you should always come away with actionable steps and suggestions for the next stage of your startup.

Find additional tips and a free report template in HubSpot’s’ How To Do Market Research: A Guide and Template .

Drafting market research questions for startups is not an exact science because cookie-cutter surveys and interview questions will not work. Every product, service, and industry has unique features that require tailored language in each research question. 

Below is a sampling of the type of questions you may want to consider: 

• What do you like most about our new product or service?
• What do you wish our product or service did that it does not currently do?
• What do you lose sleep over at night?
• What price would you consider so low that you’d question this product’s overall quality?
• Which of these companies have you purchased this product from in the past six months? (list of competitors)

Market research is a booming industry around the globe, but nowhere more so than in the United States. The U.S. is the leading country for market research services , with the industry bringing in $18.75 billion in 2020, more than six times the industry-related revenue of any other country in the world. It’s no surprise, considering how quality market research can directly impact a company’s bottom line and growth. Free kits for growth marketing can help you get moving on the road to success through market research for startups.

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Start » startup, 3 easy steps to research your startup business idea.

After you choose a business idea to pursue, your next step is researching it. Here’s how to do it right.

Starting a new business is an exciting venture with limitless opportunities. However, if you’ve decided to take the leap into entrepreneurship, you’ll need to do your homework before you hit the ground running.

After choosing a business idea, the first step to starting a new business is researching that idea. You'll want to know if there is a demand for your potential product or service, as well as the type of competition you'll be up against. Doing this work can help you anticipate and counter any potential issues, giving your business the best possible chance of success.

Here are three simple steps to jumpstart your business idea research.

[Read: 5 Expert Business-Planning Strategies to Help You Reach Your Goals ]

Develop a market research plan

Conducting market research can help you determine who your target audience is and how to reach them effectively, as well as how your product or service uniquely solves a problem that audience is facing.

There are two main types of market research: primary and secondary. Primary research refers to any information that comes directly from your audience, such as focus groups, surveys and interviews. This can help you understand your potential customers’ habits, preferences and needs, so you can cater your offerings accordingly.

Secondary market research comes from the public or outside sources. These may include public sources like government statistics, commercial sources like market reports and internal sources like your company’s own marketing data. You can use this information to identify trends and patterns, allowing you to target your marketing.

When conducting market research, consider where your target audience spends time, then invest your efforts on those platforms. For example, if your ideal customer isn’t typically a big social media user, reaching out to people on Instagram might not be the best use of your time.

Conducting market research can help you determine who your target audience is and how to reach them effectively.

Study your competitors

Once you’ve gained an understanding of your audience, you’ll also need to gain an understanding of your competition. Competitive research involves identifying your competitors and identifying their strengths and weaknesses. This not only helps you see how your own business idea compares (and where you may need to make adjustments), it also provides valuable insights regarding industry trends.

Your first step is to identify your business’s main competitors, which can be done by simply searching your product or service category online. Competitors can be divided into direct and indirect: Direct competitors are targeting your same audience with a similar product or service, while indirect competitors may have slight variations in their product/service or target audience. Researching both can help you discover areas of growth for your own business, while also mitigating any potential threats to your business’s success.

Once you’ve found your main competitors, analyze their online presence by reviewing their websites, blogs and social media pages. You may even consider signing up for their email lists and following their social media profiles to get an idea of how they communicate. Finally, track your findings and use the information to fine-tune your business idea and its offerings.

[Read: Need Some Feedback? How to Conduct Customer Interviews and Focus Groups ]

Conduct a SWOT analysis

A SWOT analysis helps you objectively evaluate both internal and external factors that could impact your business. SWOT stands for strengths, weaknesses, opportunities and threats. Take time to brainstorm what your business does well, where your business can improve, which opportunities your business can take advantage of and which external threats could have a negative impact.

Once you’ve completed your analysis, implement what you’ve learned by creating an actionable plan that will help you capitalize on your company’s strengths and minimize the impact of any weaknesses.

Finally, keep in mind that your initial business idea research is just the first step. Your product or service, your audience and the market may change over time. Conducting regular research and analyses of your business will give it the best opportunity for long-term success.

Stay tuned for our next Startup2021 article on doing a competitive analysis.

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6 Steps to Determine if You Have a Good Business Idea

Posted september 28, 2022 by kody wirth.

You have an idea for a business. But is it a good idea? 

Even if you think it’s revolutionary, life-altering, and guaranteed to succeed—the people you hope will buy your product may not see it that way. So, how do you go from an idea that you feel good about to an idea that you know will work? By conducting thorough market research.

Let’s break down what market research is and how to build an effective research framework. One that will help you vet your business idea and prepare you to make confident and strategic business decisions.

What is market research?

Market research is the process of gathering and analyzing information about your potential customers, existing competitors , and the overall market. This information can be used to validate your business idea, inform changes to products or services, and even influence your marketing and communication strategies. 

When starting a business, thorough market research can help you answer critical questions, such as:

• Are there existing businesses pursuing your idea? 
• What level of competition will you be facing? 
• How many potential customers are out there? 
• How much can you reasonably anticipate in sales?
• Are there enough potential customers to make your idea a sustainable business? 

Types of market research explained

Market research can be broken down into two methods for gathering information—primary and secondary research. Each is valuable in its own way but is most beneficial when used together to verify information.

Primary research

Research and analysis of information and insights collected directly by a person or business. This can be exploratory, a less structured approach with more open-ended questions, or specific, a more rigid series of questions meant to provide specific data points. 1st party data of this kind can be found through surveys, focus groups, sales data, brand impressions, and any other information that you gather by doing business.

Secondary research

This type of research leverages previously gathered information from an outside entity completely unrelated to your business. This can include census data, industry reports, research from other businesses, and any other source of accredited information. Most of this data is publicly available, but some may require subscriptions or singular purchases to gain access.

How to do market research for your business idea

Jumping into market research can be intimidating. Whether you’re collecting your own data or leveraging 3rd party reports, it’s an overwhelming sea of information that can easily drown your efforts without a firm framework to work from. To make your research efforts effective, try this step-by-step process.

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1. Set research goals

It’s tempting to conduct open-ended market research. To sift through reports, talk to people, or run surveys without an end goal in mind. While this may be enriching, it also leads to a lengthy research process that may lead to no valuable information at all.

To keep yourself on task, you need to establish research goals upfront.

• What specifically are you trying to find out?
• What information gaps do you need to be filled?
• How much data do you need to feel confident in your decisions?
• What decisions will you be making with the information gathered?
• What’s your deadline? 

One of your goals when conducting market research is to determine whether or not it makes sense to pursue your business idea. For your idea to be successful, there needs to be a big enough market, a bearable level of competition, and consumer demand that can lead to long-term sustainability. 

Recommended Reading: 5 Steps to set SMART business goals

2. Get to know the industry

In this step, you’ll focus on defining the industry you intend to enter. You need to know the history, current state, and where it’s headed. To help refine your efforts, be sure that you focus on the following:

Key Players

Who are the key suppliers, distributors, retailers, regulators, and customers? You should have a clear understanding of how these various entities interact and if there are gaps or deficiencies that you can exploit. 

Competitors

Exploring key industry players will lead you to more detailed competitive research. Remember, while you should understand the market leaders, they may not be your direct competition. Take a deeper look into the entire competitive landscape and identify who you believe you’ll be up against. 

How do their businesses compare to your idea? What is their current market share? What makes them competitive? Dig in and try to understand as much as you can about their operations.

How is the industry changing? Are there any disruptions? Could there be? What are the historical trends in sales, marketing, etc?

Understanding how the industry, and companies within it, have responded to consumer sentiment and what they’re currently dealing with is vital. It provides a picture of economic dips and increases, the likelihood for change, and if there are any emerging trends that need to be incorporated into your idea.

A part of industry trends that you should take an especially careful look at is the adoption of technology. How often do technological changes occur? What macro-technology trends are or could affect it? How much of an investment is it for you and your competitors?

Understanding what technology is necessary to compete, what is changing the industry, and how often can give you an idea of the necessary expertise and associated costs.

3. Explore the demographic landscape

People are at the core of every business. So, what is your target market? Who are your ideal customers? You need to identify the people most likely to support your business. 

What’s their age, income level, gender, and race? What psychographic factors contribute to their purchasing decisions? Do they feel strongly about environmental support, pricing, quality, etc?

You must ascertain the relevant behaviors, preferences, and perspectives of your target audience. By the end, you should have a very clear picture, and possibly created a persona that creates a real-world personification of this group of people. 

Need help identifying your target customers? Start with a breakdown of the market size. 

• Estimate the Total Available Market (TAM)—the total market for your product.
• Determine the size of your Serviceable Available Market (SAM)—the portion of the market that you can reach.
• Identify your Service Obtainable Market (SOM)—the likely size of your actual customer base. 

Understanding your TAM, SAM, and SOM is a proven method for assessing the viability of your market and the first step in pinpointing your customers. 

4. Interview potential customers

It’s not enough to simply identify potential customers, you should talk to them. Their feedback provides powerful insight into what they want and how to position your idea to address their needs. The industry data you collected is a starting point. However, you need to take the target market you’ve identified and start reaching out to them directly. 

Potential customers voicing their opinions provide insight into why and what they will spend money on. This is your opportunity to confirm if you have a viable business idea and even improve it. 

Not a fan of one-on-one interviews? You can run focus groups, send out surveys, create a landing page, or even create social media accounts focused on your ideal customer to see what sort of traction you get. Ideally, you do a mix of these actions to get direct feedback and numerical data that helps you understand if you’re on the right track. 

Recommended Reading: How to conduct a market analysis

5. Conduct a SWOT analysis

After collecting all of this information, it’s time to solidify if your idea will truly work. The easiest way to do this is with a SWOT analysis .

This four-by-four grid condenses everything down into potential strengths, weaknesses, opportunities, and threats to your business idea. Not only will it visualize the reality of your business situation, but it also helps you better position yourself to succeed in the market. 

It can also tell you if your small business idea simply has too much against it. Do the potential weaknesses and threats far outweigh any strengths or opportunities? You may need to rethink aspects of the idea or be prepared to take on far more challenges if you choose to launch as is.  

6. Test your idea

Even if the research you’ve conducted heavily favors your business idea, it’s still worth taking the time to test it. This can take the form of pre-orders, a limited batch of products, a beta test for your service, or even an MVP that you leverage in additional one-on-one interviews or focus groups. The goal is to create something tangible that customers can invest in or interact with.

The feedback you receive will further confirm whether or not you have a solid idea. It’s also one last chance to identify anything that should be adjusted or better positioned to resonate with your customers. It may also show that in practice your idea defies the research and simply doesn’t work or far surpasses expectations.

How to find out if your business idea is taken

It’s difficult to come up with an original business idea. More than likely, as you research the viability of your idea, you’ll uncover that it’s very similar to another business. If you’re worried that your startup idea is taken and want that answer upfront, there are two simple methods you can use:

Simple Google Search

The first step you should take, before investing a large amount of time researching, is to conduct a quick Google search. More than likely, you’ll immediately be presented with several business or service options. If not, try other searches using variations to determine if someone is offering a similar product and service, but describing it differently.  

If your idea has already been tried, it doesn’t mean that it shouldn’t be pursued. However, you need to know “how,” “when,” and “by whom” your idea was brought to market. Using Google is a fast, easy way to get answers. 

Patent and Trademarks

If a web search doesn’t bring up any similar ideas, the next step is to review the United States Patent and Trademark Office , or similar national database, listings. Just know that it isn’t as simple as searching for specific names and descriptions. Additionally, this still isn’t an exhaustive list, and businesses that haven’t filed an application may still be protected.

So, if you’re worried about a potentially valuable idea infringing on a current patent or trademark, it may be worth connecting with an attorney to do the search for you. Likewise, people may infringe on your idea if you don’t protect it. If your idea is completely original and valuable, you should seek protection from the start.          

Recommended Reading: Real reasons why people start businesses                        

What to do if your business idea already exists

Is every idea you have taken? That can actually be a good thing. Use the existence of a similar idea to frame your industry and competitive research to better position your own idea. To help you with this process, be sure to focus on the following:

1. Determine if the idea exists but failed

So, someone previously tried your idea. However, as part of your research, you uncover that they went out of business. 

What did they do wrong? Did they target the wrong customers? Were there supply chain issues or extensive costs? Maybe their ad spend or messaging were misaligned? 

Now, what should you do differently?

Is a healthy amount of upfront cash necessary to succeed? Should you attempt to target an entirely different customer base? Would a simple pricing or feature change resonate with the customers they failed to attract?

Use the specific areas you identify as part of their failure to fuel your research and testing. If you can, it may even be worth reaching out to former employees or business owners to get first-hand details.

2. Hone in on a niche

Even if a business exists and is targeting your ideal customers, it doesn’t mean you can’t carve out a piece of that pie. Rather than going for the entire customer base, you can focus on personalization and the needs of a subset of that customer group. A niche .

Starting with a smaller niche will allow you to save money with more cost-effective marketing and more focused sales strategies. Once you’ve captured the initial market share, you can, if the opportunity is available, expand your target market. 

3. Differentiate your revenue model

How your business intends to make money is critical to its sustainability. However, the business model of current or previous businesses isn’t the only way. In fact, it may be an opportunity for you to do things differently. 

Maybe the business should operate on credit, or perhaps cash upfront is better? Or could the service be offered free to users, if advertisers came on board? Understand what has been done and if there is an opportunity to provide alternatives that benefit customers or your operational efficiency.

4. Create a better customer experience

There is no substitute for great customer service. If you’re considering a business idea that is taken, providing an exceptional customer experience can set you apart.

Maybe you provide greater personalization, different options to communicate, a no-hassle return policy, or any number of benefits that the competition simply doesn’t care about. So, rather than attempting to compete on price or scale, focus on building relationships. Where you provide more value and in return, your customers become more valuable.

Sometimes there’s a reason that previous businesses failed—it’s simply not a good idea. Or, maybe an idea is so good that the market is simply too competitive to enter. In either of these cases, rather than moving forward with your idea, it may be best to pivot. 

This doesn’t mean your research was a waste of time, in fact, you likely came across possible alternative ventures. And you don’t need to start all over with researching a new idea. You’ve already done some of the leg work and can jump into some of the later steps focused on testing.  

Recommended Reading: How to pivot your business during a crisis

Your business idea is just the first step

You have an idea for a business. Now, by conducting market research, you know that it’s a good idea. So, what’s next?

Now, it’s time to put that research into action. Learn how to apply your learnings to a one-page plan and establish your business goals. Then forecast your initial sales volume and explore potential pricing options to determine how you’ll establish a sustainable business.  

With a plan and forecast in place, all fueled by your initial research, you’ll be ready to pursue business growth. To test, review, and adapt your business to better manage external issues and take advantage of emerging opportunities. 

And if you want a tool that helps you do all of that, from testing an idea to tracking and analyzing performance, then you should try LivePlan. It’s business planning and financial management software built to help small businesses grow through a simple but powerful four-step process. 

Learn how you can drive business success and start growth planning with LivePlan from the very beginning of your business.

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How to do market research for a startup (with examples)

Did you step out of the shower this morning with a business idea to beat them all? Did you read back through late-night notes, and they finally made sense?

If you’ve come up with an amazing idea for a product or service, congratulations! This could be the start of a great adventure, and every adventure needs to start somewhere.

To set a business set up for success, don’t create that website or launch that prototype just yet .

Take the time for proper market research . We know it might not seem as exciting as elevator pitches and guerilla marketing campaigns. Still, it’s just as important for your business strategy and will be a firm contributor to your startup’s success.

To discover if your big shower idea is viable, you need to conduct market research .

Before understanding which market research method is best for you, let’s get on the same page. 

What we’ll cover in this article:

What is market research.

• What good market research looks like, and what it can deliver
• Why market research for startups is so valuable 
• How to conduct market research for startups in a way that’ll give you actionable data
• Some examples of how market research changed the course for startups that went on to become successful businesses

Market research is about analysing the market you are in or are about to enter. It involves closely examining market trends, industry trends, market dynamics, your target audience, and other potential customers. Market research includes competitor analysis to see how similar businesses are selling and identify any indirect competitors you can learn from.

Market research findings will influence and guide your go-to-market strategies, and help you secure funding — they aren’t just for good-looking reports! Investors will want to see more than general market size figures. If you can show them proprietary data you’ve gathered from your target consumers (also known as zero-party data ), it will give them the deeper layer of insight they’re looking for.

Market research has been around for decades , and companies have tweaked and updated it over time, but the term has always been used rather loosely. It shouldn’t be conducted to simply confirm that your idea is good. 

When you conduct market research looking to affirm a hypothesis, you become susceptible to market research bias. You can end up walking away with specific data sets that affirm your theory, rather than actionable data that can dictate the direction your theory needs to take—which may be the opposite direction!

Why is market research important for entrepreneurs and startups?

It’s easy to be blinded by the potential of a big startup idea. Your product or service might seem great on paper—or even as a prototype—but without proper market research services , it could flop when you go to market.

Startup founders need to get as much detailed information on their potential market as soon as possible. Here are some reasons why:

Market research will help you test your ideas

There are several things you can and should find out about your product through research. The first question to answer: is there sufficient demand for your product?

It’s not true that if you make something and promote it hard enough, people will eventually start buying it. 

It could be that the product you have in mind is not for the target group you would expect or that the timing is off. For example, selling wired headphones now that most cell phones don’t even have a headphone jack would not be the perfect timing to secure demand. This works both ways; your product could be behind the times or ahead of them—as you’ll see later in our examples!

That doesn’t mean you can’t produce anything that hasn’t been done before – you simply have to do it differently and better. When Slack entered the market, there were communication tools for businesses already on the market. They just did it better. 

Aside from understanding what your core product and its features need to look like, you’ll also gather important information on pricing, payment plans, marketing strategies, product messaging, and more. There are tons of companies to help you with your research—here are the top market research companies in the US to get you started.

Conducting market research is important for attracting investors

If you want to impress potential investors, you’ll need more than a spicy prototype to whet their appetite. The main thing that investors care about is how likely they are to make money out of this product in the long run. 

For that, they’ll need to see research that backs up your claims and proves there’s a viable market for you to enter and meet demand. 

 This research makes the decision-making process to invest that much easier. 

Investors will need to conduct a due diligence check before they part with their cash. You’ll have a large chunk of the data they need embedded in your market research—making this investment process run that much smoother for every stakeholder. 

Discover how market research can help your brand: from reaching the right customers to testing creative assets

It makes startups less likely to fail 

Let’s look at why startups fail.

The top answers for this underline the importance of market research once again. At number 1 on the list of reasons why startups fail: ‘ no market need. ’ In 42% of cases , there’s simply not sufficient demand for a shower thought—no matter how innovative it is.

Number 3 on that same list is being beaten by the competition. Ignoring your competitors accounts for 20% of startup failure !

Of course, market research can’t predict the future entirely. However, when done properly, it’ll give your small business the tools needed to get a head start in the sink-or-swim world of startups.

Choose the right tools for market research

Attest is here to give you all the market insights you need, with tailored demographic filters and ready-to-go survey templates, you can measure everything from brand awareness to product demand in hours, not days or weeks.

How to do market research for a startup: 6 steps

There are plenty of tools, resources, and best practices to conduct solid market research, but it can be difficult to pick the right direction to head in. Worry not! Here are six steps to get the most out of your market research.

1. Find the right market research methods for your needs

Before diving into your market, target audience, and competitors, it’s good to freshen up on the types of market research methods there are: primary research and secondary research.

Primary market research

The internet only knows so much. You’ll have to get some data straight from the source: your target audience. That’s where primary data enters the picture. This is research you do yourself, gathering information directly from the people you want to use your product or service.

A great way to do this is by using online surveys or working with focus groups to get a comprehensive understanding of what your future buyers and loyal customers need.

Secondary research

If you use existing research and data, you’re doing secondary market research and finding secondary data. This can be great for exploring market dynamics and spotting trends. You can find more tools to help you conduct this research method in our blog: 12 great market research tools .

Secondary data has its place, but because it’s external research that hasn’t been conducted with your business in mind, you’ll need to be aware of citation bias.

What’s citation bias? Citation bias occurs when your data uses the results of other research. The results of which may have been looking to prove something slightly different to what you’re looking to prove. Plus, if the research is not conducted by you, then the data may already have fallen victim to one or more other types of survey bias you haven’t been able to account for.

2. Find out what you need to focus on

You might have a general sense of what you want to learn from your market research: whether or not you should launch your startup idea. However, you’ll need to specify some research goals to get actionable data.

After your first exploratory primary research or secondary research, you’ll be able to identify where you have knowledge gaps. What isn’t clear about the market? What assumptions about your potential customers need to be verified?

You can split up your market research goals into different categories—helping you better assign the right team to the right tasks.

For example, let your best marketers and sales reps help you in researching buyer behaviours. Let your finance team guide payment habits and payment methods for your market research. 

This market research template can help you better guide your market research.

3. Identify your ideal market

In any market research, you’ll have to look at three important factors:

• the target market as a whole
• your competitors
• your potential customers

We’ll start with the market as a whole because it’ll help you get more specific data along the way.

First, figuring out which market and industry niche you fall into is crucial. It may seem obvious, but if you put some thought into it, you might find you’d perform better in a different market.

Aim for a market where you fit in, where there’s a large enough product demand , and where you can make a difference.

Here’s how to find out what’s going on in a market:

Find your market, fast

Don’t leave the success of your startup to chance – our market research software is here to help you navigate the market and make the right decisions for your brand.

Talk to industry experts

Talk to experts who’ve been working in that target market for years and ask them about what they think the future will look like. These might just be speculations, but it’s better to hear them and address them than pretend they don’t exist.

You can also pay attention to what’s happening in online communities revolving around your product idea. For example, places like Facebook Groups, Reddit, Twitter, Twitch, ProductHunt, G2, Capterra, and other platforms can be a great eye opener about your potential future customers and market. 

Read the latest trend reports

Another great way to get a clear view of trends in your market is to keep track of relevant blogs and news. There are plenty of target market reports and public market data available to find out the latest trends and where the market is going, like G2, Deloitte, Gartner, McKinsey, and more—make the most of these datasets.

Use target market research tools

With Google Alerts and Trends, you always have comprehensive, up-to-date data on trends and can spot changes in popularity for certain brands and products by focusing on specific keywords. 

Find out what our favourite tools are for analysing your target market in our blog: eight smart market analysis tools .

4. Shake hands with your target audience

Get ready to talk to real people.

To understand your target market, you need to look at more than numbers. It’s great to see some people spending a lot on certain products, but you’ll need to learn why they do that. Get the powerful insights you need to create a strong positioning and ensure your marketing efforts hit the spot.

This is where primary research is most important. You can choose in-depth interviews, online surveys, focus groups, or a mix of those things, depending on what answers you’re looking for. 

Lost for words? We’ll give you some inspiration in this list of 20 essential questions you should ask your (future) customers .

Consumer profiling for startups

We recommend you go beyond the standard consumer profiling demographics and build buyer personas with layers. By adding behavioural and attitudinal data to the mix, you will create much more effective marketing campaigns and digital marketing strategies that land with the people most likely to use your product.

We’ve got a guide full of tips to get started with consumer profiling as a startup and a success story of one startup that discovered their most important potential customers weren’t who they thought they were .

5. Analyse your key competitors—direct and indirect

Next up: your competition. You don’t need to infiltrate their business to get to know them inside-out, but it sure helps to look at their strategy, messaging, tactics, and, most  importantly, what your target audience thinks of them.

Your target market probably knows who your competitors are better than anyone else. Find out what products they consider as alternatives to yours, and you may find out you have significantly more competition than you initially thought.

Take things a step further and look beyond your obvious direct competitors; focus on other companies that could be catching up with you in a few years or are in your niche but currently offering something else. Chances are you’re not the only one working on a new business idea each morning in the shower!

Rest assured, this doesn’t have to be guesswork—here are our 14 favourite competitor tracking tools to help you get started.

6. Be prepared to make big, but well-informed decisions

Once your market research is done, and all questions answered, it’s time to create a plan of action. Hopefully, you found out that your product or service is a lucrative idea and that there’s a real market for it—even if you need to tweak your idea a bit.

Market research will be the guide for any future business decision you take. How you approach product development, branding, and marketing, will all depend on the results of this research. 

3 Examples of market research for startups

The success of any startup heavily depends on whether they’re willing to listen to their target market or not.

Let’s look at real-life examples that paved the way for tons of startups and set an example in market research best practices to transform a business in its earliest stages of growth.

Example 1: the board game maker that won big with market research

Before coming across Attest, Big Potato Games was cobbling together insights from social media and Google Analytics—not ideal when you want a comprehensive picture of your market.

The team needed to establish exactly who their customers were, and learn the behaviours and attitudes of their potential customers to more effectively target the right people in the right places with the right messaging.

Using market research to explore consumers’ attitudes towards board games and what motivates them to play helped them define key customer personas. The research uncovered seven key customer types, all the way from casual, occasional players to hardcore gamers.

An example of what they uncovered through market research was that mums view board games as a way of getting the family together, while young adults saw it more as a way to socialise with friends.

They also found out the size and importance of each customer segment. While the hardcore gamers are a super important and dedicated segment, it’s still quite a small buyer group. It turned out that the mums group was a much bigger purchase decision-maker and demographic to go for.

Market research allowed them to better understand the segments where they sought to build awareness, who was using their product, and who was actually buying it.

Example 2: admit when you can’t beat the competition

Ever heard of Odeo? It probably doesn’t ring a bell. It was created by Evan Williams and Biz Stone in 2005 as a platform for podcasts. They placed their bets on podcasts. However, as we now know, their timing was off.

Instead of sitting around and waiting for podcasts to hit, they re-examined the market. They looked at user adoption rates, technology, and customer acquisition costs. At the time, Apple was their main competitor, and they knew they wouldn’t win. So, based on their market research, they pivoted.

They looked at other popular platforms where content was shared, such as Facebook. Their market research looked at what people didn’t like about those platforms. What tools were they missing? What annoyed people?

Not long after, Twitter was born. The Facebook News Feed was too cluttered for many people, so they cleaned things up. As we know today, it was a huge success.

Example 3: The dating site that turned into a video platform

Over the years, a lot of dating sites and apps have come and gone. Tune In Hook Up is one of those that has gone rather quickly. Its creators saw that the website, which was a video dating site, didn’t get enough traffic to make the right matches.

They had this technology that made posting videos online easier than ever, but not enough people were jumping on it.

They did market research and found it was hard to find specific videos online, and websites that did offer them didn’t work very well. Sharing videos with others was a pain for users.

Based on their research, they broke up with the online dating market and focused on the video part of their business that already existed. They changed the name, the platform, and their lives. You might have heard of it. They called it: YouTube.

Market research made simple

The right market insights can make or break your business, which is why market research is one of the most important things you can invest in. Don’t leave your market research up to chance – choose the best tools that set your startup on the path to success and match it with talent that knows what to go for. Now get back in the shower; you’ve got ideas to create!

Make market research easy with Attest

With our cutting-edge tech and on-demand research expertise, your startup can rest easy. Measure brand awareness and gain vital insights from our built-in audience of 110+ million people.

Market Research FAQs

To do market research for a startup, you should follow these six steps: 1. Pick the right market research methods 2. Identify what you need to know 3. Find your ideal market 4. Get to know your target audience 5. Analyse your key competitors – direct and indirect 6. Be prepared to make big, but well-informed decisions Once you complete them, you’ll have all the information you need to create a business strategy that will lead to your startup’s success.

The best form of market research you can do for a new business is primary market research. This is gathering information directly from the people you want to use your product or service by using online surveys or working with focus groups.

The main focus of the market research for small startup businesses is to validate their business idea. It doesn’t matter how good your idea or prototype looks; if there isn’t a market for it, no marketing budget will suffice.  By researching what the market thinks about your idea and what needs they have, you’ll know if your product will have demand or not. 

Customer Research Lead 

Nick joined Attest in 2021, with more than 10 years' experience in market research and consumer insights on both agency and brand sides. As part of the Customer Research Team team, Nick takes a hands-on role supporting customers uncover insights and opportunities for growth.

Related articles

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How to do Market Research for Your Business Idea

Perhaps you have an idea for the next top-selling gadget, an app to help make people’s busy lives better or a method to sell professional services in an innovative way.

Once you’ve come up with a business concept and decide you want to bring it to market, it’s time for planning and preparation. Performing market research before launching a new business idea is an important step to help ensure your new endeavor will be successful.

What is market research?

Market research is the process of learning why consumers will want to purchase your service or product. The details you gather will show you what your target market’s needs and preferences are. You can learn what consumers’ spending habits are like and the types of purchasing decisions these people make. Having this information and analyzing it thoroughly can help you figure out the best way to make your offerings known and price them in a way to attract the most customers.

The following steps can help you get started.

How to do market research

1. read about the market..

There are market reports for most industries. Even if your idea seems unique, such as a new type of toy, you can find information about different aspects of the toy market, including pricing and what toys are selling well. Reading these reports and those in trade journals can show you current and predicted trends, which gives you a better idea of how your product or service might perform.

2. Perform customer research.

You’ll want to know a lot about the type of people who may be your future customers. This includes information about who they are, such as their age, education level, location and occupation. You’ll need to review their current buying habits and whether they’re willing to pay more for quality or they’re adhering to a budget and using coupons while focusing on cost.

Much of this demographic information is available on the U.S. Small Business Administration’s website . You can use this data to determine which groups are more likely to purchase from you than others — and if there are other groups you want to target and sell to.

You’ll also need to analyze information to determine why your target group would buy your product instead of something from another company. Start by finding out who the customers are for similar products or services, based on market reports.

3. Interview potential customers.

Once you find these potential customers, you’ll want to ask about their needs and what they want in a product or service. You can do this with an online poll or survey on social media . Sending out a survey link to online groups where these potential customers spend time is a good option.

For example, if your target customers are mothers of young children, put the link on a social media platform where these women share tips, or ask a few specific women to share the link with others who meet that description.

Reaching out to potential customers is essential for understanding if or how your product will be relevant in market. Some key answers you can gain from this include:

• What products or services already exist?
• How much are customers willing to pay?
• How can products or services be better?

4. Understand the competition.

Learn about other companies in the same or a similar industry. By comparing companies that have similar products, you can better understand the business landscape and learn how they’ve succeeded. This can also help you determine your chances of success. Company size doesn’t necessarily matter here. You can research established firms of a similar size or start-ups, be they private or publicly traded. Speaking with potential customers can also clarify what they currently like about the competition and areas where they feel their needs aren’t being met. Reading online reviews, talking with customers in person or online, and conducting surveys are all useful ways to obtain this information.

5. Testing the business idea

The last step is testing your business idea. You could offer a business service to a few customers to get their opinion and see how it works in real life. If you’re making a product, create a prototype and let others use it to get their feedback on whether it’s useful, if it fits a need and how much they would pay for it. You can modify your business idea based on what you learn.

Launching a small business can be challenging, even with a great idea. Find more tips on how to successfully start your business , and consider how you plan to protect your company from potential damages. With small business insurance , you can have the peace of mind that you’re covered if the unexpected happens.

• business idea
• market research
• starting a business

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How to Do Market Research for a New Business idea in 9 Steps

By: Author Tony Martins Ajaero

Home » Grow your Business » Marketing & Sales

How do you conduct market research analysis for a new product idea? How do you ascertain the profitability of a business idea? How do you turn a business idea into an opportunity? How do you decide if an idea or opportunity is worth pursuing? What tools are needed for market research ?

A couple of years back, Mark stumbled upon a business idea during a brainstorming session. The idea seemed so promising that he called it the “next big thing.” And really, there was a large market for the product. Mark’s idea was unique; no other business in the same industry had offered a product that works the same way in the past.

Even though the startup cost was a bit on bit on the high side, Mark was sure he would quickly make his profits. And, like any other enthusiastic entrepreneur, he started taking steps to implement his idea. Since he had enough savings and was able to provide all the startup funds from his own end, Mark needed no third party funding to get started. Nothing could stop him, not even money.

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Mark obtained all necessary licensing and fulfilled all legal requirements. He found a good location. He purchased the needed equipment and hired skilled and experienced staff. And he marketed his business aggressively and had created much awareness even before launch.

When he eventually launched the business, it became obvious that his target market was lukewarm towards his product. But Mark felt it was too early to draw conclusions. After all, a new business normally passes through an initial “low-sales” phase before blossoming.

Out of optimism, Mark pumped more funds into the business over the next months to keep it alive. This was against his plan, but the business wasn’t yet generating enough sales to support itself. After one year of running the business, things didn’t improve as Mark had hoped. In fact, sales dwindled. And Mark could no longer continue to fund the business.

Mark approached a seasoned business consultant to figure out what could have happened and what could be done. That was when he discovered shocking facts about his business idea. He was enthusiastic, but his target market wasn’t. His product was unique, but it didn’t really fill the consumer’s need in a unique way.

And because his product had to be priced a bit high to guarantee profit, his target market stuck with the other products, since his product didn’t really solve their problem in an easier or quicker way than the cheaper alternatives.

Eventually Mark’s business crumbled just after the first year of its launch. Why? Because he didn’t research the market before launching his “big” idea. And so, he couldn’t survive the harsh realities of the market.

Back to the present

Having understood—from that story—the importance of conducting extensive market research before starting a new business, you will now learn how to do it yourself. It is no longer a hidden fact that the the economic climate for new businesses is never and will never be certain. That is why entrepreneurship is viewed as being risky.

Now despite the risk associated with starting a business, many people are still going ahead to start an enterprise and few of these individuals succeed. How and why did they succeed? Conducting market research for a new business idea isn’t as difficult or complex as you might think. And it comes down to just four steps, which are discussed below:

9 Steps on How to Do Market Research for a New Business idea

1. identify your target market.

Your target market is the group of people you will promote, advertise, and eventually sell your product or service to. To define your market, you need to answer certain questions, such as the following.

• What are the demographics of the locality you’re running your business in?
• What is the age range of your target market?
• Are you targeting males or females, or both?
• Are you targeting married or single individuals, or both?
• What is their occupation?
• What are their interests?
• How often will they need your product? Every day or only at specific times?

Giving answers to these and other relevant question will help you define your target market. The rule here is to make your target market clear enough that you can visualize them in your mind.

2. Critically Analyze your Market

Okay, so you have an idea that looks good but you want to know if there is demand for it? Or better still, to know if a demand can be created? The first step to take is to analyze your marketplace and a good way to start is by asking yourself the following questions:

• Is there any individual or company currently exploiting your idea?
• Is there a market for your idea?
• Is the competition stiff or non existent?
• If there is a market for your idea, then who are your customers?

It is crucial that you conduct a market analysis to as to determine the potential demand for your idea and the level of competition you will face. However, if after doing your market research and you discover that the market is already saturated with similar product ideas and customers are not in need for additional option, the best thing to do is to pass on such idea and move on.

3. Dig up all industry information about your business idea

If you scale through the step one and you have ascertained that a market exist for your product idea, the next step to take is to research the industry you will be operating in. It is of so much important for you to research everything about the product and business itself by going through trade publications, searching online, reading the news papers, talking to others in the industry and contacting your local chamber of commerce. Also, it is important you ask yourself the following questions:

• Who is the market leader in your industry?
• What percentage market share does the market leader hold?
• What is the success rate or failure rate of startups in that industry?
• Is the industry strictly regulated by the government?

4. Analyze the need to be filled

Chances are that you already defined the need, but you still need to analyze it to figure out if the need is really felt by your target market and if your product or service is capable of filling that need.

List the features and benefits of your product or service that make it the perfect solution your target market needs. In addition, list the factors that will prompt your target market to buy your product or service. This could be low price, convenience, higher quality, and other factors.

5. Carry out a SWOT analysis

What is SWOT analysis? SWOT stands for weaknesses, strengths, opportunities and threats; while SWOT analysis is simply the process of uncovering and understanding these factors. Weaknesses and strengths are internal and stem from the company itself (e.g quality service, a flawed product design) while opportunities and threats are factors that are related to the external sphere, including the economic climate of the marketplace, your customers and your competition.

6. Ask questions from potential consumers

Get in touch with your target market and gather relevant information about their needs and preferences as well as your product or service. You can do this using interviews, surveys, or questionnaires. Some important questions to ask might include the following:

• What factors do you consider when purchasing this product or service?
• What do you like or dislike about products or services currently in the market?
• What suggestions do you have for improvement?
• What do you think is the most appropriate price for this product or service?
• Asking questions like this will help you better understand what your target market expects from your product or service.

7. Analyze the competition

Find out more about similar products or services already in the market. What are their prices? What are their strengths and weaknesses? And how will your own products and services compete against them? This last step helps you figure out the competition’s weak areas that you can capitalize on. These are your unique selling points.

8. Research and check if a franchise opportunity exist for your idea

Instead of going through the painful process of starting a business from scratch , you can jump start and increases your chances of success by buying a franchise; that is if you are financially strong. So you must research and find out if a franchise exist in your industry.

9. Research and find out if their is manpower availability

What is the essence of starting up a business in an area where there is no manpower availability; or you setup a business whose daily operations require technical skills that cannot be sourced locally or the labor cost is too expensive. So you must research to ascertain that there is availability and affordability of labour. You should estimate the salary and wage costs along with payroll taxes.

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How to Come Up with an Innovative Business Idea

• 21 Jul 2020

Entrepreneurship is the pursuit of opportunity beyond currently controlled resources. By definition, entrepreneurs seek to fill a need in a new way.

For aspiring entrepreneurs, however, generating strong, novel business ideas can be challenging.

If you’re interested in being an entrepreneur , brainstorming ways you can satisfy needs and solve problems is a good place to start.

Remember the golden rule of brainstorming: There are no bad ideas. As your thoughts flow, jot them down so you can later prune the list to focus on your strongest concepts.

Here are some thought-starters for coming up with innovative business ideas and examples of how entrepreneurs have used them to build successful companies.

Access your free e-book today.

How to Come Up with a Business Idea

Is there an easier way.

One place to start brainstorming potential business ideas is by asking yourself, “What task can I make easier?”

A common denominator for successful businesses is their ability to fulfill customer needs . In this case, the need is to create a product or service that makes people’s lives easier.

Related: How to Identify an Underserved Need in the Market

The most innovative businesses have flourished from simple ideas. For example, HelloFresh has taught people how to cook and provided tools to prepare meals more efficiently. It started with a need to make meal planning and grocery shopping easier. By preparing meal kits that directly fulfill busy people’s needs, this idea has seen major growth.

Check out our video on how to come up with innovative business ideas below below, and subscribe to our YouTube channel for more explainer content!

This method of creating a product to fill a need can be viewed through the lens of Harvard Business School Professor Clayton Christensen’s jobs to be done theory , which he presents in the online course Disruptive Strategy .

“A ‘job to be done’ is a problem or opportunity that somebody is trying to solve,” Christensen says. “We call it a ‘job’ because it needs to be done, and we hire people or products to get jobs done.”

Look for these kinds of opportunities in your own life. Every “job” presents an opportunity to create an easier way to get it done.

By centering your business plan on a particular need, you can increase your chances of building a profitable business.

Related: Jobs to Be Done: 4 Real-World Examples

Can I Make This More Accessible?

There are many useful products and services that aren’t readily available to the entire market, creating an opportunity to produce a similar, more accessible product offering.

The founding of Airbnb by Brian Chesky and Joe Gebbia is an example that HBS Professor William Sahlman uses in the online course Entrepreneurship Essentials .

“Chesky and Gebbia observed how hard it was to find housing during big local events,” Sahlman explains. “They decided to list online three air beds in their apartment for people coming to San Francisco for a design conference.”

From there, they added a third member to their founding team, Nathan Blecharczyk, who built the platform for connecting people with spare rooms to travelers needing a place to stay. They called it AirBed and Breakfast, which later became Airbnb .

Chesky and Gebbia noticed hotel rooms weren’t easy to book during large events, recognized a business opportunity, and devised a solution to fulfill a need for accessible, short-term lodging.

There are countless industries and companies whose offerings are inaccessible to certain market segments or during specific periods. Consider how you might fill those needs.

Related: 10 Characteristics of Successful Entrepreneurs

What Can I Improve About This?

For every successful product offering, there's a multitude of ways to make it better. Think of companies you admire and imagine how you could improve their products. As you do so, consider the following four factors.

1. Delivery Process

Your business idea doesn’t have to be entirely new—it just has to fill a need. If you can identify a more convenient way of delivering an existing service, it could be an opportunity for your business.

Uber is used as an example in Entrepreneurship Essentials . Taxis have existed for decades, but Uber delivered its services in a new, innovative way by linking drivers in their own cars to customers via an app.

This example also shows there are no limits to what type of business you can create. Your business’ ability to fulfill a need will matter more than whether it’s a brick-and-mortar or online business.

Related: 3 Effective Methods for Assessing Customer Needs

2. Location

One of the simplest improvements to a product or service is bringing it to a new location.

Returning to the Uber example in Entrepreneurship Essentials , ride-sharing company Didi was founded in China—a location Uber hadn’t yet reached. Didi used a similar platform and model as Uber but filled a location gap Uber had left open.

What products, services, or concepts have you experienced in other places that you’d like to bring to your community?

One improvement that can make a significant impact is cost. Determining how to make a high-quality equivalent to a leading product and offer it for a fraction of the price has great potential.

Home security brand Wyze was founded using this logic. After four ex-Amazon employees discovered they could produce high-quality security cameras and sell them for one-tenth the cost of leading competitors, they sold one million security cameras in their first year as a company.

It takes testing to ensure product quality isn’t sacrificed for a lower price, but finding a way to reduce the cost of an in-demand item could jumpstart your entrepreneurial journey.

4. Customer Experience

Taking an existing offering and improving the customer experience for all or a segment of the market can be a valuable way to fill a need.

One example of an organization that’s done this well is Wanderful , a platform that, similar to Airbnb, connects travelers to locals who can offer lodging and travel advice—with the provision that all users are women.

Beth Santos, founder and CEO of Wanderful, noticed that female solo travelers made up 11 percent of the travel industry , which failed to take into consideration the safety, gender norm, and cultural concerns of women traveling alone.

She improved this experience by creating a network of women that can be tapped into for lodging, travel advice, or just a friendly face in a new location. Wanderful has since expanded its mission to give female and non-binary travelers voices in the travel industry through conferences, communities, and recognition programs.

If there’s an opportunity to improve the experience of a specific group of people, act on it and see where the opportunity leads.

Related: 6 Questions to Ask Before Starting a Business

Is It Time to Pivot?

When starting a business, you may need to pivot from your original idea as new needs arise in the market.

For instance, Jebbit , a tech startup that originally offered a platform to pay students for the advertisements they watched, saw a rising need for privacy and consent in the consumer data space. It pivoted to create a platform for secure, declared customer data.

Another instance in which it makes sense to pivot is during technological evolution.

In Disruptive Strategy , Christensen explains that technological advancements can be either sustaining or disruptive innovations , depending on how they impact your company.

Take Netflix : The service was created to allow people to watch movies without going to the video store and accomplished this by mailing DVDs to customers’ homes with prepaid return envelopes.

When streaming came on the scene in 2007, Netflix implemented the new technology into its business model and has continued to adapt as it’s evolved. Because Netflix was able to adopt new technology to continue serving its customers, streaming was a sustaining innovation.

In the case of video store Blockbuster , streaming was a disruptive innovation that it tried but couldn’t affordably adopt. It ultimately led the business to shut down.

When technological advancements arise, think of how your current business model could shift to use innovation as a sustaining force.

More Examples of Innovative Business Ideas

As you think of ideas for businesses, take inspiration from the world around you. Analyze the foundational needs other businesses have fulfilled for society and how they’ve adapted to what customers want.

Remember: As a future business owner, it’s critical to understand your company’s core mission. Focusing on that can help align your startup ideas and provide a greater chance for success.

To gain even more insight and inspiration, consider the following examples, which show how diverse your business model and mission can be.

Notarize , the first online platform for legally signing and notarizing documents is just one example of an online startup that discovered an overlooked need. For many, it’s a hassle to find a notary public to sign a document in person. This prompted Pat Kinsel, founder and CEO of Notarize, to make this difficult, but necessary, task more convenient.

"It really struck me that notarized documents are often some of the most important things people sign, and yet, we have this system that’s 100 years old," Kinsel said in an interview with Inc .

Kinsel designed the Notarize app to connect people to licensed notary publics via video chat so they can see their documents signed in real time.

This need for notarized documents seemed to be a common, but overlooked, need for many professionals. By thinking outside the box, Notarize seized a business opportunity and brought it to its fullest potential.

The development of Starbucks under former chairman and CEO Howard Schultz is another example that highlights how to efficiently choose locations for your brick-and-mortar.

“Schultz admired the sidewalk coffee shops he’d visited in Italy and decided he would introduce the same basic idea in the United States,” Sahlman says in Entrepreneurship Essentials. “That venture became Starbucks.”

Now, it’s rare to walk a few blocks without seeing a Starbucks on a corner. Strategic locations within high traffic routes created a customer base that’s made Starbucks an essential part of their lives.

Perhaps one of the most well-known companies in the world, Amazon is a prime example of fulfilling people’s need for convenience.

This e-commerce business made it the norm to buy items online—including books, music, movies, housewares, and electronics—and have them quickly and conveniently delivered.

Think Like an Entrepreneur

Coming up with an innovative business idea isn’t difficult if you’re observant. By asking yourself key brainstorming questions, you can generate a list of business ideas that fill market needs, improve existing products, and make daily life easier and more enjoyable.

Do you want to turn an idea into a viable venture? Explore our four-week Entrepreneurship Essentials course, six-week Disruptive Strategy course, and other online entrepreneurship and innovation courses to discover how you can harness the power of innovation. Download our free course flowchart to determine which best aligns with your goals.

This post was updated on September 19, 2022. It was originally published on July 21, 2020.

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How to Research a Business Idea

Last Updated: February 28, 2020

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The economic climate for new businesses is never certain, but doing your research can drastically improve your chances of success. By thoroughly investigating every aspect of your business idea, you will know what to expect and how to execute your strategy if you choose to move forward.

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Innovation Hub at Research Park

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Shark Tank Jr. Sparks Creativity in Young Innovators

Kathryn Dankesreiter, Assistant Director of Public Relations

August 12, 2024

Innovation Hub and STEM CORE ignite 4th-9th graders entrepreneurial spirit and transform ideas into innovative business ventures.

The Texas Tech University Innovation Hub buzzed with youthful energy and creativity last week as it hosted 60 budding entrepreneurs for the Shark Tank Jr. summer camp. The weeklong program, designed for 4th-9th graders, immersed students in the exciting world of entrepreneurship within the STEM (Science, Technology, Engineering, and Mathematics) fields. Texas Tech STEM CORE and the Innovation Hub partnered to create the Shark Tank Jr. program, combining their expertise to provide a dynamic and educational experience in STEM entrepreneurship.

The camp was divided into two sessions to cater to different age groups. In the mornings, 4th-6th graders explored the fundamentals of entrepreneurship, while the afternoons were reserved for 7th-9th graders, who tackled more advanced concepts. Despite their age differences, all participants shared a common goal: to transform their innovative ideas into viable business concepts.

Each day of the camp was packed with hands-on activities and learning experiences that took students through the entrepreneurial journey. The first step was ideation, where students brainstormed and refined their ideas. The young innovators learned to identify problems and devise creative solutions. This phase was crucial in sparking their curiosity and setting the stage for the development of their projects.

Once their ideas were solidified, the students moved on to the prototyping stage. Using various materials and tools, they brought their concepts to life, creating tangible representations of their solutions. This hands-on approach not only fostered creativity but also helped students understand the practical aspects of product development.

Managing a budget was another critical component of the camp. Students were taught the importance of financial planning and resource management. They learned to allocate funds wisely, track expenses, and make cost-effective decisions, ensuring their projects stayed within budget. This exercise instilled valuable financial literacy skills that would benefit them in future entrepreneurial endeavors.

Teamwork was at the heart of Shark Tank Jr. Participants were grouped into teams, encouraging collaboration and the exchange of ideas. Working together, they learned to communicate effectively, delegate tasks, and leverage each other's strengths. This cooperative environment mirrored real-world business settings, where teamwork and effective communication are essential for success.

As the week progressed, students delved into developing a Business Model Canvas (BMC). This strategic tool helped them outline their business ideas, identify key partners, resources, and customer segments, and define their value propositions. By the end of the camp, each team had a comprehensive BMC, providing a clear roadmap for their entrepreneurial ventures.

The culmination of Shark Tank Jr. was the highly anticipated pitch day, modeled after the popular TV show "Shark Tank." On the final day, students presented their business ideas to a panel of judges comprising local entrepreneurs, Texas Tech faculty, and business leaders. The atmosphere was charged with excitement as each team took the stage, pitching their concepts with confidence and enthusiasm.

The judges were impressed by the creativity and innovation displayed by the young entrepreneurs. Ideas ranged from eco-friendly products to tech-based solutions, showcasing the diverse interests and talents of the participants. After each pitch, the judges provided constructive feedback, helping the students refine their ideas and offering insights into the real-world challenges of entrepreneurship.

"I was blown away by the ingenuity and passion these students demonstrated," said Taysha Williams, Managing Director of the Texas Tech Innovation Hub. "Shark Tank Jr. not only teaches valuable STEM and business skills but also empowers these young minds to think critically and creatively about solving problems."

Parents and mentors echoed Williams's sentiments, praising the program for its comprehensive and engaging approach. "My daughter came home every day excited to share what she learned," said one parent. "She's always been interested in science, but this camp has shown her how she can turn her interests into real-world solutions."

As the camp concluded, it was clear that Shark Tank Jr. had left a lasting impact on the participants. Armed with new skills and knowledge, these young entrepreneurs were inspired to continue their entrepreneurial journeys. The Texas Tech University Innovation Hub, through programs like Shark Tank Jr., continues to foster innovation and entrepreneurship, preparing the next generation of leaders to tackle the challenges of tomorrow.

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Money blog: Will 'the greatest chocolate bar ever' return? We asked Cadbury's...

Welcome to the Money blog. We'll have our usual personal finance and consumer news and tips, as well as all the latest on turbulence on the stock market. Leave a comment on any of the stories we're covering below.

Tuesday 6 August 2024 08:37, UK

• Asian markets rebound after big sell-off
• Explained : US recession could be 'huge' for global economy
• Fastest-selling property type revealed
• Pensioners face effective 15% energy bill increase this winter
• New £190 switching offer from TSB - here's what you need to know

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By Daniel Binns, business reporter

The markets in London are this morning up in early trading following yesterday's stock market falls around the world.

The FTSE 100 has gained around 0.3%, while the FTSE 250 is up more than 1%.

However, the gains have so far not been enough to make up the 2.04% loss in the FTSE 100 yesterday and the 2.83% fall in the FTSE 250.

It comes after stock markets in Asia rebounded earlier today following sharp falls yesterday amid fears the US could be heading for a recession.

Top FTSE gainers on Monday included hotel giant IHG, which owns brands such as Holiday Inn.

Its shares were up more than 2% after it reported a 3.2% rise in revenue per available room in the second quarter.

FTSE 250 firm Domino's Pizza Group is up 5% despite a new forecast that its annual profit is likely to be at the lower end of market expectations.

Meanwhile, oil prices have also rebounded slightly following sharp falls in recent days.

A barrel of Brent crude is priced at just over $77 (£60) this morning, a gain of more than 1%.

On the currency markets, £1 buys $1.27 US or €1.16.

After the revival of popular Cadbury's chocolate bar Top Deck earlier this year, we asked you which discontinued treat you would like to see brought back - and we got so many responses that we've decided to make a weekly feature of it called  Bring It Back . 

Every Tuesday, we'll pick one from our comments box and look at why it was so beloved and, crucially,  find out whether the companies in question might consider reintroducing them.

This week we are looking at one of the products that prompted the most messages - Cadbury's Spira.

Apparently the result of a new production process that allowed chocolate to be produced in different shapes and textures without the need for moulds, it was introduced in 1989.

As the name suggests, the twin bars in each pack were formed into a spiral shape, with six hollow tubes running through each one.

And as dozens of readers have longingly recalled, this design allowed them to be employed in a very specific way when consumed along with hot drinks.

Among the many readers to describe the practice was one calling themselves Oompahlumpa, who said: "Cadbury Spira was and remains the best chocolate bar ever.

"With experience, you can drink your hot drink through this chocolate straw, melt the inside perfectly and the outside will still be intact. It needs skill but it can only be achieved with the Spira."

Janette said: "I'd just love to see a Cadbury's Spira back on the shelves. Great to eat, but also great to use as a drinking straw!"

Reflecting the sentiments of countless other readers who got in touch, Jannic told us: "Cadbury's really NEED to bring back Spira bars! There's nothing else needing brought back other than this chocolate bar!!!"

Indeed, such is the affection for Spiras that they have spawned multiple petitions demanding their return and a Facebook page - with more than 35,000 followers.

Despite the apparent popularity of the bar, Cadbury's ceased production in 2005 - and suggested in response to a customer query on X in January that there were "no plans to bring back Spira".

However, Sky News contacted the confectionary firm in the wake of the deluge of messages calling for its return - and received the following statement.

"We continuously adapt our product range to ensure it meets changing tastes whilst supporting growth for our customers and our business," a spokesperson said.

"Our Spira bars were discontinued several years ago but we still have plenty of other delicious sharing bags for consumers to choose from!"

So, certainly not a commitment to a Spira relaunch - although its army of fans may take some consolation from the fact it is not a definitive refusal.

Those determined to convince the company to reconsider will undoubtedly continue their campaign - and we will be keeping an eye out for any further developments!

Which currently discontinued chocolate bar, crisps, sweets - or any other food product - would you like to see brought back, and why? Let us know in the comment box at the top!

Two-bedroom terraced homes are the fastest selling properties across England and Wales, according to Zoopla. 

On average, it takes around 27 days for this property type to be snapped up - compared with the typical 32 days. 

The property website calculates its selling time by counting the number of days between a house being listed for sale and a buyer and seller agreeing a sale subject to contract.

It takes several more months for sales to complete.

Two-bed terraced homes have been the fastest-selling in more expensive regions such as London and the East of England for at least six years. 

But they are now also the fastest-selling property type in some more affordable regions, signalling a shift in buyer requirements amid higher borrowing costs, Zoopla said.

This property type is selling fastest in Yorkshire and the Humber, and the West Midlands. 

Zoopla found two-bed terraces are shifting particularly quickly in Wigan, at just 17 days on average. 

A similar situation has been seen in Manchester and Bristol, where the typical time to sell is 19 days.

Despite this, two bedroom terraced homes have made up only 7% of property listings generally over the past three months, with the average asking price sitting at £200,000, Zoopla said. 

Four-plus bed detached houses are currently the slowest-selling property type at a national level. 

And, although flats typically take longer to sell than houses, these are the fastest-selling property type in the North West, including in urban areas like Manchester, Liverpool and Warrington. 

More than 50 organisations have written to Chancellor Rachel Reeves after she scrapped the Winter Fuel Payment for most pensioners.

They say the move - impacting pensioners not on means-tested benefits - will contribute to pensioners' energy bills increasing by 15% this winter. 

"The decision to remove the payment to all but a small minority of pensioners will see millions more older people face the prospect of spending this winter in cold, damp homes," the letter from the End Fuel Poverty Coalition said. 

Simon Francis, co-ordinator of the group, called for the government to offer more support to households of all ages. 

What is the Winter Fuel Payment?

The benefit was previously available to almost everyone in the UK who was born before 25 September 1957 to help them cover their heating costs. 

The one-off payment is worth between £100 and £300. 

Those who are able to claim it should get a letter in October or November stating how much money they are entitled to, according to the government website. 

Good morning.

Markets in Asia have rallied after worldwide plunges on Monday amid fears the US may be heading for recession.

Taiwan 's stock exchange jumped following a record drop on Monday, but shed some of the gains later in the morning amid lingering concerns over the outlook for the US economy and tech companies.

Japan 's benchmark Nikkei 225 share index soared nearly 11% after it plunged a near record 12.4% yesterday - its biggest fall since "Black Monday" in October 1987.

Indian government bond yields are expected to remain steady while  South Korea 's Kospi was up almost 3% after dropping on Monday by the most since late 2008.

The rally in the Asian markets came after a dramatic day on Wall Street on Monday.

All the major US stock market indexes fell at the opening bell and continued to drop up to the close.

Behind the drop are seven high-performing tech companies, the so-called magnificent seven: Apple, Google parent company Alphabet, Amazon, Meta, Microsoft, AI-microchip maker Nvidia and electric car producer Tesla.

The UK's FTSE 100 closed down more than 2% on Monday, the worst day since July 2023. The FTSE 250 also dropped on the open and had fallen 2.83% by the end of the trading day.

Sell-offs were not confined just to stock markets. Cryptocurrency Bitcoin reached a level not seen since February. One Bitcoin is now worth $54,650.

It comes after US jobs market data on Friday came in  much lower than expected for July , sending the country's stock markets tumbling.

Analysts at JPMorgan were more pessimistic, putting the probability of a recession at 50%.

We're pausing our live coverage for today - scroll back through to catch up on all the major developments as global stock markets tumbled amid fears of a US recession after an unexpected increase in joblessness across the pond.

Want to catch up at a glance? Here's a recap of events today:

• Stock markets around the world dropped sharply this morning - the UK's FTSE 100 was down more than 2%;
• Trillions were wiped off US markets when they opened at 2.30pm UK time;
• Some of the biggest losers in the US were Intel, Amazon, Arm Holdings, Nvidia and Tesla;
• The chances of a US interest rate cut rose as markets priced in a 90% chance of a reduction next month;
• The US turbulence was described by our NBC colleagues as a "complete U-turn" to a few weeks ago when "we were talking about the resilience of the US economy";
• And what it could all mean here in the UK - one lender said it would cut mortgage rates, with an analyst saying: "If the US sell-off continues, and given the current geopolitical backdrop, there is the potential for some deep cuts from major lenders this week and into next."

We'll be back tomorrow with live updates - good night.

By Sarah Taaffe-Maguire , business reporter

It would have been unthinkable to suggest that just days after deciding to hold interest rates that pressure would be mounting for an emergency cut in the cost of US borrowing.

Last week the US central bank, known as the Fed, announced it was making no change to interest rates, keeping them high to slow price rises. 

But today the global stock market sell-off led to calls, and an expectation among some quarters, of an emergency intervention by the interest rate-setters at the Federal Reserve. Investors began to bet an emergency cut could be made. 

Such measures are only taken in extreme circumstances. It would be the first time since March 2020, right at the outset of COVID-19 lockdowns, that such a move was taken.  

The monetary policy regulator is mandated to do two things: keep inflation at 2% and have high levels of employment.

Throughout today commentators and officials have noted stock market performance is not a core concern of the Fed. 

A 0.5 percentage point cut is now viewed by investors as the most likely course of action for the Fed's next meeting in September. Further cuts in November and December are also being priced in.

It comes amid worry the Fed misjudged the economic risk of keeping rates high, as it did in 2021 when pandemic-era inflation was increasing costs for consumers. The inflation increase was judged to be transitory but the effects of economic shocks on prices are still being felt in the US and across the world.

Away from the main news of the day - the global market plunge - to the home of English rugby.

Rugby chiefs have agreed to sell the naming rights to Twickenham Stadium, the home of the national rugby union side for the past century.

Sky News can reveal that the Rugby Football Union (RFU) has struck a deal with Allianz, the German insurer, to add its brand to one of the world's most famous rugby venues.

Sources said the RFU and Allianz were planning to rush through an announcement of the partnership after both were contacted by Sky News on Monday afternoon.

The value of the deal was unclear, although sources said it would represent a significant boost to the governing body's finances.

Read the rest of City editor Mark Kleinman 's report here:

Major US stock indexes had made up some losses by the middle of the trading day around an hour ago.

The Dow Jones Industrial Average was down less than 800 points, or just short of 2%, after falling as much as 1,100 points earlier in the day.

The S&P 500 was down 2.2% after declining more than 3% earlier.

And the tech-focused Nasdaq was off 2.6% after declining as much as 4.3% to start the day.

Stocks were bolstered after a business-services report that signalled the US economy remained on firm footing.

Trump makes hay

The turbulence has been seized on by Donald Trump, who managed to turn it into a political issue and help get #kamalacrash trending on X.

On his Truth Social account, Trump posted "KAMALA CRASH!" followed quickly by "KAMALA CRASH vs. TRUMP CASH!"

Right-wing accounts on X including Libs of TikTok, RNC Research and End Wokeness were quick to follow as they attempted to portray the market drawdown as the result of Kamala Harris's recent surge in polls.

The turbulence in the US stock market isn't done yet.

Investors will be looking for signs of the market bottom, which is the lowest point in a market decline, or the turning point where selling stops and buying begins.

John Roque, the senior managing director of New York based asset management firm 22V, has picked out six signs to look out for that the market bottom is approaching.

1. The yen needs to stop strengthening against the dollar

The strengthening of the Japanese yen has ruined profits from carry trades, which is when investors sell something in one currency and buy something in another. 

A settling down of the exchange rate, according to Mr Roque, would give carry-trade investors a "chance to catch their breath".

2. 'Leadership stocks need to stop going down'

High-performing and influential companies in the US stock market like Apple, Google, Amazon and Meta will need to see their stocks stabilise.

That would be a sign investors don't feel like raising more cash and are happy with the risk in their portfolios.

3. Stock indexes becoming oversold

A stock is regarded as oversold when it has suffered a sharp decline, and markets believe it may have become undervalued as a result.

When the Relative Strength Index (RSI) drops below 30, a stock or index is considered oversold. 

4. Bond prices need to stop going up

The price of bonds moves inversely to interest rates - meaning they go up when the interest rates go low.

5. Changing rhetoric from the Federal Reserve

The Fed meets in Wyoming in Jackson Hole in late August to discuss the economy. 

Talk coming out of that meeting about a rate cuts would "help investors' psyches", according to Mr Roque.

6. VIX volatility index peaking

The Cboe Volatility Index (VIX) is a key measure of expected volatility in the stock market and is often referred to as Wall Street's "fear gauge".

Once the VIX peaks and starts to fall down, market recovery can follow quickly. Currently, the VIX is up 245% over the past month.

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Looking for a New Business Idea? Here's How to Identify What People Really Need. If you can find a niche, underserved need, you and your new business can claim it as your own.

By Eric 'ERock' Christopher Edited by Dan Bova Mar 21, 2022

Opinions expressed by Entrepreneur contributors are their own.

As a would-be entrepreneur , it can sometimes be tempting to think that all the good business ideas have already been taken. When practically every industry seems to be overwhelmed with businesses (particularly in the e-commerce age), it can seem hard to find a way to stand out from the competition.

In reality, however, there are still plenty of opportunities out there for entrepreneurs who are willing to dig a bit deeper. By looking for niche, underserved needs in their industry of choice, entrepreneurs can develop new and very successful brands of their own.

As it turns out, you don't have to try to serve everyone to create a successful business.

1. Consider your own interests and underserved needs

While pursuing your passions is a cliche starting point for any entrepreneur, it is particularly important when you are trying to identify more niche needs. By focusing on your own interests, it can be easier to identify areas where your own needs currently aren't being met.

Brainstorming a list of your skills, hobbies, interests and problems that you'd like to see solved in your own life can serve as an invaluable starting point for finding niche opportunities.

Sometimes, entrepreneurs can even identify niche business opportunities by combining aspects from different interests. On a smaller scale, this can easily be seen on sites such as Etsy, where, as one example, you'll find products that combine an individual's talent for laser-cut wood art with their interest in video games.

Related: 6 Steps to Turn Your Passion Into a Career

2. Evaluate what others in your industry don't offer

If you already have a particular industry in mind, it can be helpful to conduct competitor research. Don't just look at what others in your industry offer — look across multiple companies' websites so you can get a better idea of specific products or services that aren't generally available.

This stood out during a recent conversation with Ashley Sarnowski, co-founder of Sunnie Hunnies. As she explained, "We found our niche focus of super soft swimwear for newborns and toddlers in part because it was an issue that had come up within our own families. However, what really helped give us the drive to launch our own product was doing research and seeing that the type of products we were looking for didn't really exist in the current market. Our research gave us the confidence that we could offer something unique in a crowded market."

3. Survey the target audience

You can go outside your own experiences and get ideas for niche needs by surveying others in your potential target audience. You could start with family, friends or business associates, or you could go to internet communities and take part in their conversations.

Pay attention to the problems people are experiencing, the products or services they wish they had or the questions they are asking. Consider how these pain points and desires relate to your niche, and how you could use your skills and knowledge to provide a meaningful solution.

Aside from evaluating audience problems and needs, dig deeper so you can understand their buying behaviors and motivations. By more fully understanding the persona of your target audience, you won't just be better able to develop an on-point niche product or service. You'll also know how to market it effectively.

Related: 5 Steps to Creating Effective Customer Surveys

4. Conduct keyword research

While your own personal experiences or anecdotes from friends and family can help you identify underserved needs, not all niche ideas are created equal. Before going all-in on a niche business idea, you should conduct keyword research to validate its potential.

According to NerdWallet , "If a keyword has under 500 searches per month, you are facing an uphill battle in terms of demand. "Ideally, you want between 1,000 to 2,000 searches per month. With a number like that, you can test your product without burning through cash.'"

On the other hand, if a keyword has a higher than expected volume of keyword searches, it may not be as niche or underserved as you originally anticipated. Tools like Google Trends can also help you see how interest in a keyword rises and falls over time, or whether a particular product or service experiences seasonal fluctuations in demand.

Just because other competitors already exist within your desired sub-niche doesn't mean you can't enter this space. Use your initial keyword research as a launchpad to identify what you can offer that is different or better so you can make a big impact in these smaller markets.

Niching down to find success

Finding the right products or services for the right niche can ultimately allow your business to become far more cost-effective and successful than if you tried to target a broad audience.

While focusing on a smaller niche means the total potential audience is smaller, brands that focus on a more specialized audience often become much more profitable. With less competition and the ability to engage in more highly targeted marketing, entrepreneurs can engender significant brand loyalty and word-of-mouth growth. By being one of the first to establish a foothold in your niche, you can also dominate SEO.

By putting in the effort to work with niche, underserved markets, you create a true win-win scenario for yourself and your customers.

CEO of BizFamousTM Media Group - Executive Producer - Entrepreneur

Eric Christopher, also known as ERock, is an innovative marketing strategist and respected business consultant who's a featured contributor on Entrepreneur.com, Business.com, Thrive Global, Huffington Post, and other major media outlets.

ERock has been a successful entrepreneur for nearly 2 decades. He graduated from Arizona State University with a 4.0 GPA, granting him Summa Cum Laude honors. 

He started his first brick-and-mortar business as a strength and conditioning coach, working with amateur athletes to Olympic gold medalists. He then started a part-time marketing business, which generated multiple 6-figures over the next half-decade. 

This experience ultimately evolved into a career as a branding, marketing, and media expert.

ERock is an accomplished writer, award-winning speaker, business strategist, and media consultant. He's described by his peers and clients as innovative, vivid, and quick-witted. 

His philosophy is that ALL branding and marketing must be educational, engaging, and entertaining in order to succeed in today's competitive business world. His passion is to invent unique and creative branding and media strategies that generate exceptional ROI and PR for clients.

He's consulted with a wide range of enterprises, including local business owners, national franchise chains, respected cryptocurrency companies, and world-renowned brands, including Shark Tank companies and an original Shark Tank investor.

ERock is also an accomplished business coach, having mentored thousands of entrepreneurs around the world, teaching them how to run successful businesses themselves.

ERock is the founder and CEO of (BizFamousTM Media Group - link: https://www.BizFamous.com), a media consultancy designed to promote large brands and enterprises and (Local Business Rockstar - link: https://LocalBusinessRockstar.com), a company dedicated to empowering small businesses in their markets.

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Famed 23-story new york office building sells for 97.5% discount in online auction.

The building was formerly owned by UBS.

Her Side Hustle Landed in Costco and Made $3 Million Last Year Even Though She 'Didn't Know Anything About Running a Business'

Lauren Chew, founder and CEO of Love+Chew, set out to "change our broken food system" with her first entrepreneurial venture.

This CEO Scaled His Company From $10 Million to Over $200 Million in 4 Years. Here Are 3 Things He Did to Lead The Company Through Market Disruptions.

When a new trend disrupts the market, navigating a path forward can be challenging. Oftentimes blindly following the crowd without critical thinking can lead to conformity and a loss of innovative thinking.

Costco's Return Policy Was Put to the Test When a Couple Brought in a 5-Year-Old Mattress: 'I Was So Nervous'

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Elon Musk Calls the Fed 'Foolish,' Says Agency 'Needs' to Lower Interest Rates

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RBC analyst makes a change to his ‘Global Energy Best Ideas’ list

Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow

RBC Capital Markets head of global energy research Greg Pardy made only one change, removing BP PLC, from his Global Energy Best Ideas,

“In July, the RBC Global Energy Best Ideas List was up 0.5% compared to the iShares S&P Global Energy Sector ETF (IXC) which was up 1.5% and a hybrid benchmark (75% IXC, 25% JXI – iShares Global Utilities ETF) that was up 2.8% on a sequential basis. Since its inception in February 2013, the RBC Global Energy Best Ideas List is up 189.8% compared to the S&P Global Energy Sector ETF up 39.7%. We are making no additions to the RBC Global Energy Best Ideas list this month, however we are removing BP”

The list is now Chord Energy Corporation, ConocoPhilIips, ARC Resources, Topaz Energy, Tourmaline Oil, Canadian Natural Resources, MEG Energy, Obsidian Energy, Woodside Energy, Enerflex Ltd., Pason Systems Inc., SLB, Subsea 7, AltaGas Ltd., Pembina Pipeline Corp., Archrock Inc., Energy Transfer LP, Northland Power, Superior Plus and PG&E Corporation

BMO chief economist Doug Porter found some good news in the GDP report,

“No one is going to mistake Canadian growth for a hot tamale—it’s still pretty chilly out there. But the economy is hanging in, grinding out underlying growth of just above 1 per cent. Notably, the highly cyclical goods-producing industries are showing some signs of perking up. For the first time in a year, these sectors reported a modest year-on-year rise in output in May. Meantime, the combined services industries are cooling, but still managed to churn out 1.4 per cent year-over-year growth. Looking back over the past 25 years, the stable services group has had median growth of 2.5 per cent (or about a point higher than now), while the volatile goods sector has seen typical gains of about 1.7 per cent (a bit more than a point above now). … what we just came through was very similar to the near-recession-misses in the early 2000s (tech wreck) and 2015-16 (oil price collapse). In all three cases, goods industries weakened, but didn’t plunge, and the services sectors managed to keep growing, just helping to avoid a full-on recession”

In a different part of the same report, however, BMO rates and macro strategist Benjamin Reitzes wrote “the ongoing caveat for Canadian activity figures is that population growth has been providing a big lift, masking more meaningful underlying softness. Indeed, looking at GDP per employed person, there’s been a consistent decline since Sept 2022″.

Scotiabank strategist Simon Fitzgerald Carrier provided a succinct summary of global markets in July,

“Cooling U.S. inflation data has heightened investors enthusiasm for a first Fed rate-cut in September, triggering a widespread capital reallocation within the equity market. In fact, the biggest laggards YTD (i.e., rate-sensitive sectors, small caps, Value) enjoyed a major reversal at the expense of well-known leaders (i.e., Tech, Communication, Growth, mega caps). Still, the S&P 500 managed to end the month 1.1% higher, behind Europe (+2.0%) and Asia-Pacific equities (+1.7%). Overall, the MSCI ACWI increased 1.5%, with DM equities (+1.7%) slightly outperforming. In Canada, the TSX (+5.6%; +4.6% in USD) was among the leaders in July, as a second consecutive BoC rate-cut added fuel to Canadian equities. EM equities slipped -0.1%, as China dropped -2.3% amid continued economic weakness, while India climbed +3.9% after posting a +16.4% gain in H1. LatAm stocks (+0.9%) regained their footing, after tumbling 18% in the first half of the year. Colombia (+1.8%), Brazil (+1.2%), Peru (+1.3%) and Mexico (+0.5%) all advanced, while Chile (-0.5%) modestly retreated. Commodities & Dollar Lower. Commodities are kicking off the second half of the year on a negative note, as the Bloomberg Commodity Index plunged -4.5% in July "

Diversion: “Rampant slaughter! Sexy armour! Tiger maulings! We bust the gladiator myths” – The Guardian

NEW* Market Factors newsletter: “The ‘amplification loop’ increasing risks for index investors” – Globe Investing

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