Why is market research important for a startup?

Market research is very important to start a business. Irrespective of the size of the business one should know everything about the business he/she is going to start.

Having money to invest in a business is not sufficient to run a business on a long-term basis. The prospects of running a business profitably for many years needs thorough knowledge about the demand and supply of the product and the demographics of people who are going to be the customers.

To know this, market research is an important task that has to be performed.

What is Market research?

Through market research, data is collected about the customers or a company and then analyzed to know about the future needs or requirements of the probable customers. The research helps any person who needs to start a business or an owner of an already existing firm to plan future strategies for the business.

Research of any business is done to know about the industry prospects, consumers’ preferences, current and future trends, and many other market-related data. Not even small data should be neglected while doing the research as it may change the course of the business in the long term.

Research helps to run a business in a professional manner with very little tension about the competitors and the business prospects.

There are two types of research namely primary research and secondary research.

·        The primary research is conducted in business premises to know about all aspects of the business from purchases, sales, demand for a product, number of footfalls per day, complaints and everything related to the day to day business activity is used as an input data to study the business nature.

·        Secondary research uses the data already available in the market and is general data about the industry, available in the newspapers, magazines, and articles published in the net. Personally, one can analyze the data but it is available to everybody who seeks it and it is a general data.

What type of research should a startup do?

Many prospective businesses have failed for a company because of the poor research done by a company. A startup should do extensive research before starting a business.

After studying the secondary data, they should use various primary research tools like Surveys, Interviews, group discussions among the same interest people, and observation of any relative business for some time.

Normally a startup will be new idea business so there will not be much data available in the market. So, a startup should give priority to personal data collection using the various tools available. This will help to understand the pulse of the business and industry.

Money matters for a startup but good research will help to analyze the nature of the business. With the help of research conducted at various places, one can easily decide, whether to start a business or just drop the idea of that particular business and look for a more profitable business idea.

Good research should analyze all the positive and negative of a business. A startup is normally started by persons who are new to the business. So, it is very important that proper research is undertaken before starting the business.

The present-day business scenario is very competitive. Same ideas arise for different persons at the very same time. It so happens that before you implement your idea into a potential business, someone else would have started the same business some months back.

You would lag behind them in terms of customer attraction because of the delay to start your business. These types of things can be avoided and you can confidently go ahead and start your business even if somebody had used the same idea earlier by doing quality research about your business idea.

Startups should avoid failure for the wrong reasons. Data shows 90% of the startups fail. The failure rate for a well-researched startup is very less. When you research well without any bias using a good agency, the result may hurt you or make you happy. 

There is no middle path after research.

So, always choose a good product and research well for that product. Accept whatever the research says and take a positive decision.