German_Force » Market research and competitive analysis

Use market research to find customers
Market research combines consumer behavior with economic trends to confirm and improve your business idea.
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It is essential that you understand your consumer base from the start. Market research allows you to reduce risk even while your business is still just a glimmer in your eyes.
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Collect demographic information to better understand the opportunities and constraints of customer acquisition. This can include population data about age, wealth, family, interests, or anything else related to your business.
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Then answer these questions to get a good idea of ​​the market.

Demand: Is there a desire for your product or service?
Market size: How many people will be interested in your offer?
Economic indicators: What is the income range and employment rate?
Location: Where do your customers live and where can your business reach?
Market Saturation: How many similar options are already available to consumers?
Pricing: What do potential customers pay for these alternatives?
You will also need to keep up with the latest trends of small businesses. It is important to gain a sense of the specific market share that will affect your earnings.

You can conduct market research using existing sources, or you can do research yourself and go directly to consumers.

Current sources can save you a lot of time and energy, but the information may not be as specific to your audience as you want. Use it to answer general, quantifiable questions, such as industry trends, demographics, and household income. Check online or start our list of market research resources.

Claiming your own consumers can provide you with a precise understanding of your specific target audience. But live search can be time consuming and expensive. Use it to answer questions about your business or customers, such as reactions to your logo, improvements you can make to the buying experience, and where customers can go instead of your business.

Here are some methods you can use to conduct direct research:

Surveys
Questionnaires
Focus groups
In-depth interviews
For guidance on defining the right methods for your small business, the Small Business Department provides consulting services through our network of resource partners.

Use competitive analysis to find an advantage in the market
Competitive analysis helps you learn from competitors for potential clients. This is the key to identifying a competitive advantage that creates sustainable revenue.

Your competitive analysis must define your competition by product line, service, and market sector. Evaluate the following characteristics of a competitive landscape:

market share
Points of strength and weakness
Your opportunity window to enter the market
The importance of your target market to competitors
Any barriers that may hinder you when you enter the market
Indirect or secondary competitors who may influence your success
Many industries may compete to serve the same target market. This is why you should make sure to distinguish between your competitive analysis by industry. There are many ways to do this, including Porter's Five Force analysis. Important factors to consider in the industry include the level of competition, the threat of competitors or new services, and the influence of suppliers and customers on price.

Meet clients (and competitors)
John and Kelly looked at companies and individuals in their community to see if they could open a successful auto repair shop.

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Free small business data and trends
There are many reliable sources that provide customer and market information at no cost. Free statistics are readily available to help potential small business owners.