Checklist for Start-up Market Research
Introduction
Before starting a new business, thorough market research is essential to help you find out whether there will be enough demand for the products or services you plan to supply once you begin trading. If you don't carry out basic market research before you start, you face an increased likelihood of early failure.
Key questions that you need to answer include whether there is a genuine market for your business idea, what trends are affecting your market sector and who your competitors are.
The more research you do initially, the better your position will be when it comes to making future business decisions. It is also important to continue to carry out research as an ongoing part of your regular business activity to ensure that you remain aware of what is happening in your sector and can retain a competitive edge.
This checklist will help you consider the types of questions your market research should address. It also suggests some tasks that will get you started with your research.
What to cover when carrying out market research
A variety of questions need to be considered in order to build up a picture of the key issues and trends that may have an influence on your market sector and business idea. Understanding the market will enable you to target your marketing efforts towards specific audiences, while also identifying how your competitors are approaching the market.
When researching your market, you need to consider the following:
The size and performance of your market sector
What volume and value share of the market do you need to capture?
Does your knowledge of the market and the research you have carried out suggest that there is sufficient demand for your product or service?
Is your market expanding or declining?
What cultural, economic or social trends could affect your market?
What market developments are there currently, or what could arise in the future?
Are there any gaps in the market?
What are the current trends, for example in buying habits?
What is the outlook in your market for the next two to three years?
What regulations do you need to comply with?
Are there any published market reports available?
Are there any market or industry journals that you could access?
Your customers
What are the characteristics of your target customers in terms of age, gender, socio-economic status, profession, location, buying habits, ethnic background, interests and so on?
What are the reasons why these specific groups of people (or businesses) will buy from you?
Where are your customers located?
How much are they prepared to pay, and how often?
What are their budgets?
What purchasing channels do they prefer to use? For example, traditional shops, market stalls, online stores or online marketplaces such as Amazon?
How will they prefer (or expect) to pay? For example, by cash, debit or credit card, online banking or via an online payment service such as PayPal or Google Pay?
How do they find out about suppliers such as your business? How much is their choice of supplier influenced by customer reviews posted online?
What volumes of your product will they purchase, or how frequently will they use your service?
Who makes the buying decision? For example, are the parents who pay for children's clothes the decision makers, or are the decision makers the children who will wear the items?
Your competitors
Who are your competitors, and how many do you have?
Where are they located?
How long have they been trading?
What do your competitors sell, and how do they price and promote their products or services?
Where do they buy their stock?
Which end of the market do they supply? For example, do they offer top-quality, expensive products to a niche market or cheaper lines in greater volumes to a wider market?
Who are their target customers?
What distribution channels do your competitors use? For example, shops, mobile services, online sales or stalls at craft fairs.
What are your competitors' strengths and weaknesses, and how can you make your business different from theirs?
What image do your competitors have in the market (for example in relation to quality, reliability, and the colour schemes and logos they use to reinforce their marketing message)?
What marketing methods do your competitors use?
Who are your competitors' trading partners?
Will other competitors enter your market in the near future?
Market research suggestions
Find out as much as you can about your market by reading market reports, trade journals and newspapers.
Use search engine resources such as Google Trends (https://trends.google.com/trends/) to find out what potential customers are searching for online.
Make a list of your competitors using your knowledge of your market, business directories and trade journals. Monitor their social media accounts to keep track of their marketing initiatives and their engagement with customers.
Make a list of your competitors' strengths and weaknesses and assess how you can compete with them.
List the differences between your products and services and your competitors' products and services.
Access business reference resources provided by your local library. They will be able to help you organise your research and find reliable, up-to-date sources of information.
Carry out some direct market research by talking to potential customers to build up a picture of the local market and its requirements. Designing questionnaires and selecting the right time, place and method (such as face-to-face, telephone or email) can be complicated, so if you are inexperienced in research, seek help from a business adviser.
Contact Ashored for help and support with your business.
