Steps to Starting a Small Business – Market Research

Getting enough information on your target market of potential customers is vital to starting a business that will produce income. Making guesses on what the customer really wants will not bring you very far, so it’s important to do some digging and get the answers directly from them through market research which is an important steps to starting a small business.

Some of the following questions to ask in order to device effective strategies:

  • Who is going to buy your product or service?
  • What kind of people are they? (buyer, influencer or end user)
  • How big is the market? (Competitor’s annual sales would give you an estimate)
  • How will market trends going to affect your business?
  • Does your business has any unique selling point?
  • Is the need for your product or service currently not being met?
  • Is the market already saturated?

Why do it?

You will not be able to sell something or services that has no demand. Knowing what the market is looking for and so that you can present it in a new twist, drives the need for a market research. The advantage of small businesses is that they are close to their customer and can easily get information on their purchasing habits.

How to do it?

Most of the big companies spend huge amounts of money on elaborate surveys from renowned researchers to determine if their products or services will appeal to customers at a price they are willing to pay. But for small business owners on a tight budget, there are other means to collect the key data needed without having to spend a fortune.

3 ways to collect information:

  • Get business school students to collect data at the mall.
  • Look for financial data and statistics in local library.
  • Join trade association not only to access market research they have conducted but do the networking there as well.

Do I need any ongoing market research while running the business?

Yes, this is how you gather information to evolve and adapt to the changes in market trends.

3 types of methods:

  • Keep a close watch on what your competitor is doing.
  • Install point-of-sales software to track sales or services trend.
  • Put up customer suggestion box where they can write suggestions.

Every business needs to conduct market research, it is a crucial steps to starting a small business, and tight budgets are no excuse for omitting a research plan. By starting out with some easily accessible resources, you can begin to develop better marketing strategies that can position you for market growth.

Writing an Effective Business Plan For Your Small Business

Plans are Useless; Planning is Indispensable

“Plans are useless; planning is indispensable,” according to Dwight D. Eisenhower, then Commander of the Allied Forces in Europe during WWII. Now, you may be in total agreement with the first part of that statement, but you are really not convinced of the truth of the second part.

At this point, you may be tempted to skip writing a business plan altogether, viewing it as an unnecessary exercise in jumping-through-the-hoops, suggested by some old business professor who probably never held down a “real” job anyway. Maybe it’s okay as an assignment for an MBA class, but it would be just too confining and irrelevant for today’s fast-paced business environment. Anyway, you’re ready! You’ve thought about this business venture for a long time and talked it over with friends and everybody agrees it’s a great idea. Best to strike while the iron is hot!

Press for Success

Far be it from me to dampen your enthusiasm, but you should give yourself every opportunity for success. That’s what the planning part of the process of creating your business plan will do. By the time you have pressed your way through it, you will not merely have some neatly arranged document to keep on file, you will have a working tool that addresses the essential factors that influence your future.

Besides, your friends may be 100% behind you in your new venture, but, in case you are hoping to involve others who have actual money to invest, you may need to be able to make a convincing case. Wouldn’t it be nice to have anticipated possible questions and be ready with plausible answers? If you are risking your own money, that is perhaps even a stronger reason to do some indispensable planning.

Easy Writer

If you are one who is intimidated by the blank page, never fear! There are several good software packages that will guide you through the process, such as Business Plan Pro Complete from PaloAltoSoftware. Business Plan Pro Complete walks you through the entire planning process and generates a complete, professional and ready to distribute plan with a proven formula for success. The planning wizard makes it a snap to get started since you simply answer yes or no questions to create your custom business plan framework. Bplans.com offers free business plan samples and how-to articles as well as a wealth of other information. It is definitely worth taking the time to checkout. Microsoft Office Online Templates also has a variety of free templates to use with their products. The wizard indicates the information you need and you fill it in as you go.

You may find that the easiest part is the actual writing of the plan. The real work comes in the data-gathering, which may take you a hundred hours or more, depending on what you already know or have researched. If your new venture is in an area where you’ve been working, you may already know about your customers, your suppliers, your marketing plan, your organizational structure, your financial and cash flow needs, equipment, inventory, and so on. If you know all of these except for Marketing, say, then this is where you will need to invest some time and effort. You can find a wealth of information by utilizing the traditional data sources such as chambers of commerce, major cities’ websites, trade associations, the US Census Bureau, trade journals, magazine and online articles and advertising, etc. Performing keyword searches on Google, or Ask will bring up websites to check out. Following are some places to start:

  • James J. Hill Reference Library (jjhill.org): One of the nation’s premier business libraries to bring you FREE and affordably priced tools and resources you can use to create a better business plan based on relevant and credible data.
  • U.S. Census Bureau (census.gov): A source for a variety of useful statistics, especially the Economic Census that comes out every 5 years.
  • American Demographics (adage.com/americandemographics): Just as the title suggests, numerous free reports about consumer demographics in the U.S. nationally and by statistical area.
  • Internet Public Library – The Census Data and Demographics (ipl.org)/: An especially useful site that has links to information about countries other than the U.S.
  • Corporate Information (corporateinformation.com): Features information summaries on over 350,000 companies in the U.S. and abroad for competitive analysis.

You can find a variety of companies online to help you with your market research. For example: Sundale Research’s (sundaleresearch.com) primary goal is to provide new and mature businesses with objective, accurate industry data and market analysis on a wide range of topics. Their market research is intended to save you time and money while keeping up with industry trends.

But your idea may be so new that you may also need to talk to potential customers, host some focus groups, talk to an ad agency, or maybe even make a prototype and float it past some people. Be prepared to spend the time. Remember, it’s not about the Plan but the Planning.

Build It on Paper First

Whether you decide to use business plan writing software or to just follow this guide and create your plan with your word processor, here are the sections of a good plan and the questions that need to be addressed:

  • Cover Page – Show the name of the company, your name, and the date.
  • Introduction – What is the name and address of the business? Who are the principals, their titles, and their addresses? What is the nature or purpose of the business? What is your launch date? How much start-up and/or operating capital is needed?
  • Executive Summary – One to three pages that summarize all the information to follow; come back and write this last.
  • Industry Analysis – How does your product or service compare with what is currently on the market? What is the trend in the overall industry? What have been the total sales in this industry over the previous 3 to 5 years? What new products or technologies have had the biggest impact on this industry recently? What is the future outlook for these and what trends are emerging? Who are the competitors, where are they located, and how are they doing? What advantage do you offer over them? Who is buying this product or service now? Describe the typical customer for this product or service. Are there emerging markets or market segments? Where does this product or service currently perform best? Possible Data Sources: trade associations; trade journals; attorneys & accountants dealing with the industry; industry salespeople; state business websites; focus groups.
  • Description – What product(s) or service(s) are you offering specifically? Are any patents, copyrights, or trademarks needed? Have they been acquired/filed? What is the size of your business? Where will it be located? Will this require purchasing or building a facility? Will this require leasing a facility? At what cost? Has a lease been negotiated? What personnel will you need? Where will you find suitable employees? What equipment do you need? Will it be purchased or leased? What are the qualifications of your principals? How do their backgrounds promote the success of this venture? Why do they think this will be a successful venture? Possible Data Sources: local Chamber of Commerce; community colleges & local universities; local employee leasing company; real estate agents; US Patent & Trademark Office; US Copyright Office.
  • Production Operation – If a product must be manufactured, what is the process? Will the work be done on-site or subcontracted? Who are the subcontractor(s)? If on-site, what space, equipment, machinery, production employees are needed? What suppliers are needed? Who are they? How will quality be assured? What is the anticipated production output? What established credit lines do you have? Possible Data Sources: local Chamber of Commerce; yellow pages; trade associations.
  • Service Operation – If a service is offered, describe it. Will the work be done by company personnel or subcontracted? Who are the subcontractor(s)? If on-site or in cyberspace, what employee qualifications, equipment, and technologies are needed? How will quality be assured? What performance levels are anticipated per employee? Possible Data Sources: local Chamber of Commerce; yellow pages; trade associations.
  • Marketing – How is the product or service priced? How will it be distributed? How will it be promoted? Will it be promoted by the venture or an outside agency? What agency? How have you determined what amount to set aside for marketing? How have you determined product or service forecasts? Possible Data Sources: on-line searches; Amazon; local outlets; trade journals; industry attorneys & accountants; salespeople.
  • Organization
  • How is the business structured? Who are the principals and the principal shareholders? What authority does each principal have in the venture? What are management’s qualifications? What is the job description for each position? What does the organizational chart look like? Possible Data Sources: on-line templates for job descriptions & organizational chart.
  • Risk Assessment – What weaknesses are inherent in this venture? What vulnerabilities face this type of venture? What impact will these have? What new technologies may affect this venture over the next 1 to 3 years? What contingency plans are in place? What level of liability insurance is required? What does it cost? Who is the carrier? Possible Data Sources: trade associations; trade journals; Service Corps of Retired Executives (SCORE); industry salespeople; customers; focus groups.
  • Financial Plan – What is the anticipated income? What are the cash flow projections? What is the anticipated budget over the next 3 years? What is the break even point? When is it anticipated to be met? What funding is needed and where will it come from? What funding is currently available? What collateral is available? What is the net worth of the principals, if applicable? Possible Data Sources: accountant; accounting software; Small Business Administration; Small Business Development Center; SCORE; banks; venture capitalists.
  • Appendix – Resumes of principals/management; letters of recommendation from current business associates/customers/suppliers; marketing research data; demographic data; leases or contracts in place or as promised; business licenses; price lists from suppliers; trade or industry articles or data; floor plans; information on subcontractors; liability insurance policies.

Impress for Success – Now you have to admit, this is going to make an impressive package! Put it in a binder and you have built something to be proud of – the first of your many business accomplishments. Your potential investors will appreciate the depth of your analysis, but this tool will prove helpful in describing your venture to your employees, customers, and suppliers, as well. After you have been up and running for a few months, you will find that the planning that you have done will sensitize your inner “business compass” and allow you to flexibly adjust to contingencies. And that is indispensable!

In Summary

Planning out your business on paper first gives you long-term benefits with potential investors, employees, vendors, and suppliers. The business plan becomes your roadmap to success, with pertinent data that shapes the course of your business start-up and lets you adjust your journey as contingencies arise. Business planning templates are readily available and data sources abound at your fingertips. You will achieve a solid understanding of your business as you work through each section of your plan.

IMPress Action Checklist:

Below is a list of the steps that will help you put together your business plan. Check off each step as you complete it to keep track of your progress.

  1. Purchase business plan software or download a template
  2. Read over the business plan sections to decide what data you have, what data you need
  3. Gather data via the internet, phone interviews, print material
  4. Fill in the plan’s sections
  5. Write the Executive Summary
  6. Print and Bind Your Plan

Must-Observe Trends In Small Business Online Marketing

After the many updates launched by Google, most local entrepreneurs have already lost hope in their promotional techniques through the internet. Although conditions may be rough at the moment, your small business online marketing can still thrive provided that you know the right steps to take.

In connection to this, it is a must that you are updated of what is going on in your niche and in the cyberspace. This is because change is constant and learning how to adapt to it can keep your products or services in the limelight.

The first thing to embrace these days is that more videos are in and lengthy text is out when it comes to creating web content. Should you need to compose, perhaps, a long blog, ensure the presence of a couple of videos inserted in the paragraphs. In addition to being able to join the trend, it provides a cost-effective way for you to do small business online marketing. Videos are times as far as easy communication with potential clients is concerned. And so, there is extra time left for you to invest in profit-generating activities.

Next in line is the use of mobile phones. Being able to connect with your potential clients is a great edge over your competitors. It is similar to internet advertising with a touch of the typical call-to-action phrases which will encourage people to try your brand. A more costly type of promotion through mobile devices is sending of text or voice messages. Although it is said effective, a great number of recipients find it irritating.

For a desirable local online marketing method, you can join the campaign of providing consumers helpful product or service reviews. In fact, this is how many big and small companies these days monitor how their products and services fair in the market. Providing good reviews can also help you project an image of authority in the niche where you belong.

Moving forward, here is a quite obvious method – joining the social media bandwagon. Besides Facebook and Twitter, there are other social websites that are gaining popularity these days. Be keen to observe the most talked about topics among your target audience. Should you find anything related to your product or service offer discounts or packages using your social media accounts.

Computations done in the cloud is another trend that entices potential customers. This allows them to see beforehand possible the total costs of purchasing your products or subscribing to your services. This allows them to prepare for the payment. More than that, it is also beneficial for entrepreneurs like you when it comes to easy and reliable way for you to store data.

Lastly, include in your small business online marketing strategies the provision for easy payments. Customers are generally looking for the quickest method for them to do payments especially if they are very busy. Besides enabling your website for credit card payments, PayPal and Google Wallet are two of the famous options which entrepreneurs utilize nowadays.

Social Media and Small Business in 2014

Social Media and Small Business in 2014 have a vital relation with each other because social media gives the opportunity to the small businesses to play on the same play ground aside with large brands and organizations. In 2014 it will be a fact that most of the 2013 trends will tend to keep increasing and some will fall but the truth that only matter is about the communication between business and the customers. How you communicate and build relations and trust with the customers will decide which way your business will go.

Businesses are built on the content these days and content play the most important role in success of your business. So there are some trends you should be aware of:

It is quite evident that now mobile are going to go main stream and are going to play a role of most important communicating playground. Now days almost every website is switching to mobile site so it is very important for your business to make the switch to mobile site. It should be your top priority to build responsive design and think how people are going to interact with your business on mobile phone. You should have mobile apps, emails and SMS that the customer could interact on his mobile phone.

Niche sites are going to play an important role in communicating with your customers because now days it is very difficult to get found in the presence of Face book, Google+ and twitter. These sites will get you in front of the customers because of the high target by the customers and these are the best and affordable.

Social Media and Small Business organization relationship is very important and blogs will always outrun every other way of generating business. To generate new business leads you should create better content on regular basis and try to attract more and more traffic to your website. Blogs are also known as the pros of the small business promotions and if don’t have one you should go and start one.

You should communicate and interact with your customers and potential buyers by creating value able and better content because now days spasms could get in your way and can create a little bit of setback for your business.

Social Media and Small Business relationship depends upon success of your business if you are not successful than it means you are not interacting with customers in an appropriate manner. You should try to be friends with every person that like or comment on your post even if he is your competitor because it is your success that your enemies are admiring you and success always leads to more success.

Promoting your business on social media is two way things as if you want your content and product to be promoted by someone else you have to promote their products as well. So try to find potential influential people that can promote your product and you promote their products. It will do you better than the other party.

Create interesting and best content that a customer can’t resist and you get more and more response. You should be socially active and try to reply to every comment that a user is making and try to remove if there is any doubt in his mind. This year is going to be an exciting year and try to remain at the top of the game by using the new trends of the social media.