Market research is one of the most effective ways to improve your business model, but many small business owners overlook it. This is normally because they don’t see the value in research. However doing research can keep your business afloat during the first crucial years, and it can also help to drive sales and engagement as the business grows.
Here are four reasons why market research is so important to small businesses.
1. Why Market Research Is So Important For Small Businesses: It Lowers Your Business Risks
One of the best things about doing research is that it generally lowers your business risks. This is because market research will help to ensure you are actually providing your target audience with products and services that they actually want, so you are less likely to lose customers or see a downturn in sales.
One way to do this is by testing new designs or products before you actually launch them. Asking a small sample of customers to review the products allows you to make sure the products are actually meeting their needs (and if they aren’t, you can ask for feedback that allows you to improve the products). This is particularly important for new small businesses with a small budget.
2. It Makes It Easier For You To See New Business Opportunities
Another good thing about doing market research is that it allows you to see potential new business opportunities. For instance, the research may show a market demand for a product you had never considered selling before. This allows you to expand your business horizons (while taking advantage of exciting new opportunities!).
3. You Can Improve Your Advertising
Many small business owners have a limited advertising budget. If this is the case for you, doing research can help you to optimise your budget so that you get the best possible results. Market research could also teach you more about your target audience. For instance, you may discover that most of your customers use TikTok (or perhaps they prefer to use Facebook), allowing you to broaden your social media marketing efforts.
4. You Can Set Better Business Goals
Finally market research can help you to set better goals for your business. Many business owners only set vague business goals, such as a growth in customers or sales. Market research allows you to set more specific, achievable goals.
For instance, the research may teach you that you have experienced a continuous growth in sales over the last year. This means you can set the specific (and achievable) goal of doubling sales over the next year. Alternatively you may learn that a second audience is interested in your products, so you could set a goal to start marketing to them over the next six months.