Market research is a key step towards starting your own business, but many entrepreneurs go about it the wrong way. For instance, some rely on family and friends to collect information. As well-wishers, these people will usually encourage your ideas because they believe in you.
But is this enough to actually launch a business, much less sustain it? If you haven’t used the right data collection tools to clearly define your target market, there is no way you will be able to compete with others effectively!
Other than a complete lack of market research, here are 5 other mistakes you should avoid as an entrepreneur:
1. Not Using Professional Software – Startup owners tend to avoid using market research software because of how much it costs. This is a mistake because these tools allow you to collect a lot more information, and then analyze it to gain insights into markets you should be targeting.
Along with simplifying the process of decision making, professional software also helps you improve your bottom line over time. Think of it as an investment rather than an expense, because that’s what it is.
2. Picking the Wrong Target Market – When you’re reaching out to a focus group with surveys and other data collection tools, make sure it’s the right one. Only by understanding your audience can you tailor your marketing strategies for them.
Avoid focusing on a single channel of communication when you’re collecting data about your target market. This limits the exposure you get as a startup and prevents you from connecting with other potential audiences in need of product or service your business offers.
3. Doing What Your Competitors Do – It doesn’t hurt to know how your competitors are gathering market data, but don’t focus only on that. You need to stand out from them rather than copying what they do.
Your target audience has already seen what the competition has to offer, so study them but do your own thing. If you want to gain an edge, you need to think creatively and establish a unique identity. Being innovative and creative will help potential customers remember your brand.
4. Focusing Only on Broad Groups – Like we discussed above, family and friends will support whatever you’re doing. This makes them a biased audience, since they will avoid being honest about your mistakes.
Rather than relying on well-wishers for market research and feedback, reach out to people who could actually be potential customers. They will be more likely to share their objective opinion about the advantages and disadvantages of the products or services you’re planning to offer.
5. Not Prioritizing Primary Research – Most business owners look at surveys and studies published by others before launching their business. These sources of secondary market research offer a basic indication of your target audience, but you cannot rely on them alone.
Focus on sources of primary research too, e.g. online surveys, focus group studies, etc. By connecting directly with your potential market instead of only using second-hand data, you will collect more valuable information for your startup.
Market research may not be as exciting as other aspects of running your own business, but market research is a critical step to getting it off the ground!
