How To Conduct Market Research

Market research blends consumer behavior and economic trends to confirm and improve your business idea. It's crucial to understand your consumer base from the outset. Market research lets you reduce risks even while your business is still just an idea.

Gather demographic information to better understand opportunities and limitations for gaining customers. This could include population data on age, wealth, family, interests, or anything else that’s relevant for your business.

Then answer these questions to get a good sense of your market:

  • Demand: Is there a desire for your product or service?

  • Market size: How many people would be interested in your offering?

  • 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 want to keep up with the latest small business trends. It is important to gain a sense of the specific market share that will impact your profits. You can do market research using existing sources, or you can do the research yourself and go direct to consumers.

Existing sources can save you a lot of time and energy, but the information might not be as specific to your audience as you would like. Use it to answer questions that are both general and quantifiable, like industry trends, demographics, and household incomes.

Free Small Business Data and Trends Resources

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

Consider these types of business statistics in your market research and competitive analysis:

Focus Goal Reference
General business statistics Find statistics on industries, business conditions NAICS, FedStats, Statistical Abstract of the United States, U.S. Census Bureau
Consumer statistics Gain info on potential customers, consumer markets Consumer Credit Data, Consumer Product Safety
Demographics Segment the population for targeting customers American FactFinder, Bureau of Labor Statistics
Economic indicators Know unemployment rates, loans granted and more Consumer Price Index, Bureau of Economic Analysis
Employment statistics Dig deeper into employment trends for your market Employment and Unemployment Statistics
Income statistics Pay your employees fair rates based on earnings data Earnings by Occupation and Education, Income Statistics
Money and interest rates Keep money by mastering exchange and interest rates Daily Interest Rates, Money Statistics via Federal Reserve
Production and sales statistics Understand demand, costs and consumer spending Consumer Spending, Gross Domestic Product (GDP)
Trade statistics Track indicators of sales and market performance Balance of Payments, USA Trade Online
Statistics of specific industries Use a wealth of federal agency data on industries NAICS, Statistics of U.S. Businesses

If you fail to follow this step, it can potentially lead to disaster for your business in many ways. Imagine if you had to recall all of your products because of a demand by a prior trademark user. Not only that, but you can end up paying the other party’s attorney fees and monetary damages, which can get very costly.

If you decide to own a federal trademark, your business will have several advantages, such as:

  • Public notice of your claim of ownership of the mark

  • A legal presumption of your ownership of the mark and your exclusive right to use the mark nationwide on or in connection with the goods/services listed in the registration

  • The ability to bring an action concerning the mark in federal court

  • The use of the U.S. registration as a basis to obtain registration in foreign countries

  • The ability to record the U.S. registration with the U.S. Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods

  • The right to use the federal registration symbol ®

  • Listing in the USPTO online databases

Asking consumers yourself can give you a nuanced understanding of your specific target audience, but direct research can be time consuming and expensive. Use it to answer questions about your specific business or customers, like reactions to your logo, improvements you could make to the buying experience, and where customers might go instead of your business.

Here are a few methods you can use to do direct research:

  • Surveys

  • Questionnaires

  • Focus groups

  • In-depth interviews

Market research helps you find customers for your business, and helps you find a competitive advantage for your small business.