In the entrepreneurship class I teach at Texas Woman’s University, one of the most important sections that we study is market research and why it’s so important before you start or expand a business.
While the research does take a bit of thought and time when an entrepreneur just wants to get started implementing her great business idea, it is critical to help identify potential customers and gather relevant demographics related to those customers, to determine where to locate the business and even to analyze the viability and sustainability of the business venture.
Market research can add significant value to your business strategy by identifying new sales opportunities, determining where to best target marketing efforts (and what marketing vehicles are most effective), analyzing your competition to capitalize on potential gaps in the market and setting appropriate prices for your goods or services.
One of the most important components to market research is identifying your target market. It’s not enough to describe those who are most likely to purchase your products or services as “women who have children,” for example. It’s important to get down to a more granular level and determine your ideal customer’s characteristics, such as income level, education or race.
There are several sources of information in the Denton area to help you with market research, many of them free.
Denton County’s public libraries can provide you with access to and assistance with Reference USA, which profiles 49 million businesses (public and private), 281 million consumers and their buying habits.
The Small Business Development Center of North Central Texas is a partnership of the U.S. Small Business Administration and North Central Texas College and has several satellite offices throughout the area, including one at the Denton Chamber of Commerce. The SBDC has access to a broad range of customizable resources for market research, including:
■ Creation of a customer profile using a description of the “best customer” for a product or service.
■ Demographic breakdowns for a specified location.
■ Statistics of an area including population, age, income, race, gender, employment, housing and education.
■ Retail supply and demand figures and opportunity gap analysis for a specified area.
■ A one- to five-mile radius report for annual consumer expenditures and demographics that also indicates competitor business locations.
■ A breakdown of markets by industry to show size and sales figures.
In addition, TWU’s Center for Women in Business offers the free services of a small business adviser who can help you develop other methods of research to determine customer response to your goods or services, including focus groups, surveys and interviewing potential or existing customers.
While it’s understandable that you want to jump right in to running your business, you want to make sure that you first have sound knowledge of your market by conducting effective research. In the long run, this could help you pinpoint your marketing and sales efforts to build a successful business — and save wasted time and expenses targeting the wrong market.