Do Market Research Before Your Business Filing

Have you considered doing market research before you complete your business filing? Many small business owners don’t take the time to conduct market research when they form an LLC. They fear it will be too difficult or too expensive. Market research doesn’t have to be either and, you can do it yourself. There are two types of market research you should complete before business filing, primary and secondary. Both can be done by the small business owner on a small budget.

With primary market research you are studying the likes and dislikes of potential customers in regards to your business products and services as well as the products and services offered by your competitors. In addition, you are studying potential customers shopping patterns and preferences.

Start with secondary research before you complete your business filing. Secondary research can be time consuming but with the help of the internet or your public library, it can be free. Secondary market research is studying the research conducted by others. To use secondary research when forming an LLC, read trade publications or business journals that have conducted research on your target market.

There are three options for primary research you can use before you complete your business filing. There are interviews, focus groups and surveys. Which type you use is dependent on what types of products and services your business offers.

Interviewing one on one may give you more in-depth answers and give you the opportunity to ask probing questions. Talk with people who have experience or interest in your products or services. For example, if you are opening a nursery, speak with both professional landscapers as well as novice gardeners. If you are canvassing for interviews pick high traffic areas and keep your interview questions brief.

If you are forming an LLC, a focus group is a great way to receive feedback about your product or services. To conduct a focus group, assemble a small group (no more than 10) and demonstrate your product or services. For example, if you are opening an ice cream shop, serve samples and have a short survey prepared to capture likes, dislikes and favorite flavor. Ask questions around price and what the customer would be willing to pay.

Surveys are also a good tool to conduct primary market research. Surveys can be done by mail, email or online. There are several sites that will provide you with free professional looking surveys that even include some basic tabulation. Make sure your survey questions are as specific as possible. If you were opening a beauty salon you might want to ask questions such as:

How often do you visit the salon?
What type of salon services have you received?
How much did you pay for your last salon service?
What services is your current salon lacking?

The results you can yield from market research can be invaluable and the impact to your business tremendous. Large corporations spend millions each year to find out where they and their competitors stand with their customers. But, market research isn’t just for the big guys and it doesn’t have to cost millions. Every small business owner, should do some form of market research before you complete your business filing. Good market research takes you one step closer to a successful business.

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