How to do market research for a small business - the complete guide

Informing business decisions with quality market research can have huge benefits for any business. Some small merchants might think the topic of how to do market research for a small business is only something to think about when their business is more established. However, even people looking to write a business plan or are in the beginning stages of starting a business can see major benefits from carrying out research they can reference in the future.

In this guide, we’ll take a closer look at what market research is, the benefits it can offer to merchants, and how to do market research for a small business as effectively and cost-effectively as possible.

What is market research?  

Market research is the process of studying consumer behaviour and wider economic factors, with the aim of using this data to make more informed decisions about your business. It’s a widespread practice across different businesses, with The Market Research Society (MRS) estimating the UK research insight and analytics industry has a valuation of £9 billion.

When it comes to answering “what is market research in business?” in terms of practical processes there are many forms it can take, these include: 

• Sending out surveys.

• Running focus groups.

• Leveraging original research from other companies. 

These methods are applied in different ways to source quantitative data, which is numbers-based and objectively measurable, and qualitative data, which is less tangible and more open to interpretation. All forms of market research can generally be divided into 2 categories: primary and secondary research.

Primary market research

Primary market research is research that you play an active role in collecting, either by carrying it out yourself or by hiring a third party. During primary research, the researcher interacts directly with their source which can be your business' existing customers or those stated as target demographics. Research data of this kind can provide insights into how to target these groups effectively and how to increase customer acquisition for your small business. Primary research collection of this kind often take the form of interviews, online surveys, focus groups, service or product and packaging testing and other activities.

In most cases, primary research is more expensive and time-consuming than secondary research. However, it also allows you to tailor your research activities to the nuances of your audience and business aims for more conclusive findings. The investment costs involved in executing primary research for your small business will be covered later on in this article, but at a high-level these will often include:

• Fee for hiring a market researcher or interviewer.

• Agency fee for conducting the research on your behalf. 

• Fee for hiring a physical space to conduct your research. 

• Paying respondents.

• Investment costs for data gathering tools, software and other technology.

• Travel expenses.

Secondary market research

Secondary research refers to taking findings from primary research that’s already been carried out and compiled by other parties. Common examples of secondary research might include studying reports and case studies from governments, trade bodies, or larger businesses that you share an industry with. Secondary research often makes up a large part of the market research carried out by small businesses with limited time and budget. This is because it tends to be easier and more affordable compared to carrying out your own primary research. Depending on your industry, you may find that a lot of valuable secondary research is available for free by searching the internet. However, you can also find valuable secondary research by reading trade journals or buying ebooks and whitepapers. There are also market research businesses which offer unlimited access to their data through subscription plans including:

• Local Data Company (LDC) for retail.

• NewsBank for national, regional & local newspapers.

• Statistica for all industries worldwide.

3 reasons why market research is important for small businesses

Now that you have an idea of what market research is, you may be wondering “‘why is market research important for me?”

Here are 3 of the main reasons why market research is important for small businesses.

It helps you understand your customers

If you’re a merchant just getting started as an entrepreneur, interested in becoming your own boss or open to exploring how you can turn your side hustle idea into an established business, market research can be a powerful tool for finding out exactly who you’ll be selling to.

While you may already have a vague idea of the kinds of people who would find value in your product or service, market research can give you a more objective, measurable view of the current market to ensure you’re taking the guesswork out of decision-making. Once you’ve got a clear idea of your main product or service, market research can help you answer important questions about the people who are likely to use it. This can be anything from their age range, income level, and the competitors or similar brands that they’ve used in the past. If you’ve already been running your business for some time, market research can also help you build a closer understanding of the people in your customer base and the things that motivate them. This often leads to making more informed decisions that result in building customer loyalty, improving customer retention and understanding how to better manage client expectations as they move through the conversion funnel or buyer’s journey.

Understanding things like why your customers choose your brand instead of your competitors, the value they get out of your product or service, and any potential challenges they face after purchase. This can also guide you in defining your unique selling proposition (USP) as a small business. In both cases, building an understanding of your customers and their relationship to your products can help you make informed decisions about improving your products, how to price as service and make it easier to identify new business opportunities in the future.

It helps manage risk

All businesses face some level of risk. However, by using market research to develop your understanding of both your customers and the market you’re operating in, you can anticipate challenges that pose a risk to your business and adjust your strategy to control these. Let’s say, for example, you’re running an independent bakery and considering launching a new selection of artisan breads or international pastries. This will require investing time and money into developing the recipe, creating new packaging, and marketing it to your customer base. Before you engage in any of these activities, carrying out market research through a SWOT analysis, competitor analysis or another framework will allow you to better understand whether or not your target audience will enjoy this product.

You may also want to take your market research further by creating an early iteration of the product and letting a focus group of customers sample it, then taking notes on what your customer base likes about it and what they think can be improved. At the conclusion of your research, you’ll be able to significantly reduce the risk of spending further time and effort launching your new selection of artisan breads or international pastries if there’s little market demand for it in your local area.

It helps you stay relevant and competitive

When market research is focused on trends and your competitors’ activities, it can be a major factor in keeping your business aligned with industry changes, and gaining a competitive advantage. Imagine, for example, that you’re running a cafe, and you discover through secondary market research reports that macroeconomic factors are set to increase the price of imported coffee. Knowing this, you can then carry out some primary research to determine if your competitors are likely to increase prices in their branches, keep prices the same, or lower them. With this information, you’ll be in a better position to know how to price a product and align your business strategy with the direction of the market. Either by matching competitor price points or trying to gain an advantage by offering a similar product for a lower price. By making these kinds of informed decisions, you’ll be able to keep various activities in-step with market trends, increase revenue, improve cash flow and keep your business in a more secure position.

When should a small business conduct market research? 

Though you can carry out market research at any time, there are certain junctures in the timeline of a small business where it’s especially useful. Some examples of situations where it can be useful to conduct market research include:

• When you’re looking to make money on the side or have a new business idea for a product or service and want to use market research to determine if it’s viable.

• You’re looking for ways to recession-proof your business for the future and any economic downturn.

• When you’re planning to expand into new geographic areas, e.g by opening a new branch of your business. 

• If you’re considering starting an online business where you can make and sell products through an e-commerce store.

• When you want to make a significant change to your flagship products, and want to understand your audience’s opinion on this idea.

• If you have a business idea with low investment capital but want to apply for a grant or private investment, you’ll need to back up your business idea with objective data on the market.

While carrying out market research when these kinds of milestones in your near future can help to keep your research efforts focused, there may be other preparatory steps you’ll need to take to ensure your market research is as effective as possible.

Some helpful questions to ask yourself before you conduct market research for your small business include:

• What is the purpose of market research in my unique situation?

• Do I have clear objectives to achieve or hypotheses to test with my market research project?

• Do I have the resources I need to harvest a large enough data set for my research?

• Do I have a clear idea of the target audience I’ll be interviewing or studying for my primary research?

• Have I established a realistic timeline for carrying out, completing, and analysing my research?

By answering these kinds of questions and making sure that you’re starting your research at a logical point in time, you can ensure you’re using your time efficiently and carrying out your research project in a logical, purposeful way.

How to do market research for a small business?

When working out how to do market research for small business, you need to approach the project with:

• Clearly-defined sources of information.

• A methodical plan for the actual information gathering.

• A plan of how you’ll collate your findings at the end of the research.

Here are the 5 core steps of how to do market research for a small business and what each phase involves.

Establish buyer personas

Your buyer persona can be thought of as a highly detailed subset of your business' target market, focused on a specific member of a broader group. Many businesses give their buyer personas individual’s names to visualise them more clearly and create a clear, fictional archetype of the people who make up their target audience. Some of the main variables to think about when you’re defining your buyer personas include their:

• Age range.

• Gender.

• Geographic location.

• The industry they work in and level of seniority.

• Income bracket.

• Personal relationships (e.g married or single, with or without children.)

• Day-to-day challenges and the kinds of products or services they use to solve them.

If you’re new to creating a buyer personas, we suggest small business networking as a way to meet people who have experience in sales or marketing before you start defining your personas.

A clearly-defined buyer persona will give you and anyone else in the business an effective guideline to converse with and learn from, based on the people who are going to make a difference to your sales pipeline and ultimately how easy it will be to scale your business in the future.

Choose one buyer persona to focus on

Once you’ve determined who your buyer personas are, the next step is to focus your market research efforts on the persona that aligns with the goals of your project. Consider the unique characteristics of your target persona to understand how their needs and behaviours can improve the relevance of the business decision you are investigating. Imagine, for example, you’re carrying out market research because you’re planning to roll out a new, premium version of your flagship product. In this situation, you may want to focus on a buyer persona who has an executive position and a higher than average income bracket, rather than one who has less purchasing power and may not be able to afford your new product. When you’re finalising the list of participants as part of your research project, there are a few things to prioritise to make sure you achieve the highest-quality outcome. To help structure your sample size we would suggest adopting the following split of participants:

• 60% of individuals who are a close match to your target buyer persona.

• 10% who have bought from your business recently that show signs of customer loyalty.

• 10% who have purchased from your close competitors in a similar timeframe.

• 20% who show they enjoy sharing their opinion with businesses, e.g by regularly interacting with brands in social media discussions.

Prepare the questions for participants

At times, some of the most insightful findings brands gain from market research come out of free, casual discussion with their target audience. However, it’s still important to prepare a clear structure to your research to maximise your chances of getting the information you need. The exact topics of the questions you’ll ask your participants will depend on the objectives you’re hoping to achieve with your research. There are still certain best practices you should exercise when drafting your questions to ensure you get the most valuable answers possible:

• Keeping questions clear and specific, avoiding double-barrelled questions or industry-specific jargon your participants may need explaining.

• Using neutral language in your phrasing that doesn’t show any bias or preference for one kind of answer over another.

• Keeping options for response open, inviting detailed, personal answers, and not forcing participants to choose between rigid options.

• Organising questions in a logical way. For example, if you’re planning to ask several questions about your pricing strategies, don’t spread them throughout the research session so that participants are confused by abrupt changes in topic.

• Keep questions concise and plan out the entire research session in a way that’s respectful to your participants’ time. If the questions go on for too long, people could lose interest and the quality of the data you gather could suffer.

Consider your competitors

As one of the key answers to “what is the purpose of market research” is to gain a competitive advantage in your market, it’s important to circle your research back to your knowledge of your competitors.

Using the data you gathered with your original questions, and online research about your competitors’ offerings and activities either through a competitor analysis or using a SWOT analysis framework, you’ll be better positioned to compare how well you’re meeting the needs of your audience in the current market.

This objective comparison to the state of your competitors’ business will make your ultimate conclusions practical and applicable, and help you avoid becoming too influenced by your internal knowledge of your business or fall victim to confirmation bias.

Collate and summarise

If the participants you surveyed gave you detailed responses, then you may come away from your session with a lot of disparate notes. To make sure you don’t lose any valuable information, it’s important to sort your findings into a logical structure that will help you inform a plan of action. You can summarise your market research findings in whatever way serves your objectives best, but here are a few ideas for headings that can help you form a useful outline for your research:

• A ‘Context’ section explaining your end goals and the reason why you carried out your research in the first place.

• Some brief details on the participants who took part in your study, and information about the buyer persona they relate to.

• An executive summary going over the most pertinent lessons you learned from your research and the general impact they’re going to have on your marketing strategy moving forward.

• A detailed plan of action on how you’re going to leverage the findings to optimise your strategy and work towards your stated goals.

Once you’ve learned some valuable lessons from your market research session, it’s important not to let this data sit in isolation.

Having organised the data in a way that works for you, think about ways you can incorporate your findings into key documents for your business, such as the marketing and financial analysis sections of your small business plan.

6 different types of market research

While in the past, market research only had a handful of set formats, there are now a wide range of tools and methods that small merchants can use to get closer to their target market, gain valuable insights on their industry and discover new business opportunities. Here’s a brief look at 6 types of market research you may want to incorporate in your project.

Surveys (online, phone, direct mail)

When you start researching how to do market research for a small business, one of the first solutions you’re likely to come across are surveys.

While online surveys are generally the fastest and easiest type of survey to set-up, more traditional forms like phone and direct mail surveys may lead to more personal and insightful responses. More traditional surveys can be an effective method for brick-and-mortar businesses looking to engage both existing loyal customers and local prospects who are likely to have some awareness of your business.

Focus Groups

During a focus group session, a moderator guides the discussion through different topics and questions. The aim of a focus group is to gather applicable insights on the group members’ opinions, attitudes, and habits when interacting with certain kinds of business.

During a focus group session, a moderator guides the discussion through different topics and questions. The aim of a focus group is to gather applicable insights on the group members’ opinions, attitudes, and habits when interacting with certain kinds of business. This type of market research can also involve asking for specific feedback on marketing campaigns such as email marketing and social media, product samples, and the technology your business uses for payment processing.

Interviews

Merchants will typically go into market research interviews with specific sets of information they want to learn from interviewees. This kind of research can also take on a more casual, unstructured format where the organiser and participant discuss a general topic freely, focusing on what feels natural as it comes up.

SEO (Search Engine Optimisation) and analytics

Market research through SEO and analytics involve using tools like Google Analytics and Google Search Console to look at metrics relating to organic marketing, such as: 

• Website visits.

• Page views.

• Conversion rates. 

By looking at patterns of engagement for different search terms and content on your website, you can gather insights about the sentiment of your buyer personas, or use this data to inform further, more detailed market research. Imagine, for example, you’re running a food van that specialises in vegan recipes, and you notice a lot of engagement with content on your website dealing with the health benefits of switching to a vegan diet. You can record this as an insight that the health benefits of your products are a major driving force behind your audience’s decision to choose you, or help influence future business opportunities and direct further market research initiatives like focus groups and interviews.

Social listening

The aim of this kind of market research is recording data about the sentiment around different products or services, trends in the industry, and other aspects.

There are ways to carry out social listening manually, but this is mostly done through the use of analytics tools that allow you to track specific keywords, hashtags, and other elements of content that appear on social media. Some of the most popular tools that UK businesses use for social listening include: 

• AnswerThePublic

• Owler

• Google Alerts

• BuzzSumo

• Mention

Aside from being a good source of market research, social listening can be an especially powerful tool for social media marketing for small business, giving you direct insights into how your audience interacts with your content on various platforms.

Online platforms

While social listening focuses on analysing pertinent conversations that are already happening on popular online spaces, taking a more active role in these discussions can also be a powerful method of market research. Forum sites like Reddit and Quora, alongside other discussion spaces like Facebook groups, give you the opportunity to start discussions with people who have already shown an interest in businesses like yours. If, for example, you’re running an e-commerce artist supply store, and you want to carry out market research focused on improving your pricing strategy, you might want to start a discussion in the subreddit r/oilpainting on the topic “How much do you pay for your brushes?”. The resulting comments can give you helpful insights on how to price your product and what passionate painters find reasonable to pay. Even highlighting why some buyer personas show a preference for a competitor’s pricing models.

Top tips for effective market research for small businesses

Whatever methods you choose for your market research, there are some best practices it’s important to adopt throughout the process to ensure you’re focusing on the right datasets and finding insights and serving your overall objectives. Here are some of the best tips on how to do market research for a small business effectively.

Define your research objectives

Any market research project should have your specific goal in mind to keep the activities that follow focused and effective. The market research objectives you choose should follow the SMART framework (specific, measurable, achievable, relevant, and time-bound) to maximise your chances of achieving your research’s end goal. Imagine, for example, that you’re running an independent restaurant, and you’re concerned that your customer experience and satisfaction levels are lagging behind your local competition. In this scenario, a SMART market research objective might be:

Legal and ethical considerations 

One of the central answers to the question “what is the purpose of market research?” is to find out more about a business' customers. With this in mind, as a merchant you should approach it with the same caution you would in any project that involves gathering data on private individuals. Before you start any market research activities in earnest, it’s essential to consider some of the key legal requirements and ethical measures that will ensure you’re not violating participants' privacy. For example by sharing their information with third parties without their explicit consent. Some of these considerations include:

• GDPR (General Data Protection Regulation) compliance, which will give your participants control over how you use their data and regulates the use of their private data.

• Make sure you communicate the purpose of your research to participants, how you intend to use their data, and any potential risks surrounding their participation.

• Ensuring your participants are able to stay anonymous, and your communications confidential, throughout the course of your research.

• If you’re planning to share your findings with third parties, for example marketing partners, then it’s essential to maintain accuracy and transparency in how you share your information.

Make sure to thoroughly research the legality and ethics of your research plans before taking the first step in your project as it can be easy for small businesses, that aren’t especially experienced with market research, to unintentionally slip into unethical practices. 

Free tools for small businesses to conduct market research 

Market research is a large industry, where consultancies can potentially charge thousands of pounds to find conclusions for their clients. However, effective market research isn’t just the territory of large, well-funded companies. There are a range of free tools for market research that small businesses like yours can use without having to worry about budget restrictions.

Here are some of the best tools to incorporate for your market research:

• Google Trends is a tool you can use to search for different topics and see the interest shown in them based on Google search data and mentions across the web. The geographic filtering makes it particularly useful for small e-commerce businesses that are planning to expand their operations to other countries.

• Google Forms is a part of the Google Docs suite which allows you to create customised surveys, and then distribute them by simply sharing a link. This provides a quick and easy way to get surveys in front of your participants and links with other Google products for reviewing and analysing the data you receive from them.

• Make My Persona is an interactive buyer persona template from HubSpot that walks you through the process of creating buyer personas to underpin your market research and contextualise the results.

• Statista is a resource for secondary research that collates data from multiple different research institutes and presents them in reports. Note: Some of the reports are blocked by subscription paywalls. However, most businesses will be able to find large datasets that are useful for their market research objectives.

• Tableau Public is the free version of Salesforce’s Tableau. A data visualisation tool that allows you to input raw data from your market research, and create detailed, professional visualisations that can be customised to suit your preferences. This can be useful for sharing your market research results with people in your team, business partners and consultants you’re planning to work with, or simply keeping as a reference point for your future business strategies.

• Google Analytics while not specifically built for market research, can help develop buyer personas or gather insights on how your existing customers interact with your various touchpoints. 

After set-up, this tool will show you insights like which content on your website gets the most views and interactions, which are the best social media platforms for your business that refer the most traffic, and the kind of search terms people are using to find your business online. Finding patterns in this data is a great place to start when deciding which audience segments to target as part of your research, or drafting questions specifically about the customer journey.

Conduct market research myself or outsource it to a professional?

Depending on the overarching objectives, the demands of your market research projects can become very intensive, and threaten to take time away from the day-to-day running and operations management of your business.

Even for a relatively simple research project, if you’re new to market research you may not feel confident to carry out research and apply your findings effectively. There are a few pros and cons inherent in outsourcing your market research to a consultant or agency that specialises in this kind of work. If you’re considering handling your market research yourself, here are some of the major benefits and drawbacks to consider.

Pros of conducting market research yourself

• Greater control over the research process, from articulating your goals in a way that makes sense to you and that align with your wider business growth strategies, to the way the data is presented. This allows for a higher level of customisation at each stage and reduces the risk of miscommunications causing a consultant to deviate from your vision.

• Cost savings, as you’ll only be paying for the tools and secondary research you need. When you outsource your market research, you’ll be paying for these kinds of resources as well as the expertise of the third party you hire.

• An understanding of your business' journey so far and its objectives for the future, which third parties will have a limited time to familiarise themselves with before they initiate their research.

• A potential for higher efficiency, as you may already have access to large datasets gathered through your marketing campaigns and tools.

• The flexibility to adapt your research to sudden changes in your market or your business' priorities.

Cons of conducting market research yourself

• While you may have a greater understanding of your business' objectives and background, third-party market research professionals will bring unique skills and knowledge of the research process which you may not have. If you keep the process entirely in-house, you could be at risk of arriving at biased findings or missing useful insights.

• Executing market research in-house is resource-intensive compared to outsourcing it. This requires time and effort which you’ll save by outsourcing the project to a third party.

• When you’re interpreting the data from your market research, you’ll be at greater risk of biased judgement due to your inside knowledge of your business. Market research services will bring a level of objectivity to the project which will maintain the integrity of your findings.

• Most small businesses will have limited access to data sources and tools compared to people or businesses whose full-time focus is carrying out market research. Though it will be through a proxy, benefiting from the insights these tools offer tends to be more cost-effective as part of a consultant’s bill, compared to if you were to invest in them yourself.

• Unless you have a lot of previous experience with market research, tackling it in-house will require some level of training and development so you can get familiar with key concepts and the tools you’re going to use. This can compound the time you’ll need to invest in it and make the entire process less efficient.

3 examples of market research 

When you’re in the process of planning market research, it can be useful to see how it works in a real-world setting to make sure you’re drawing on effective data collection methods and learning how to apply them effectively. Here are 3 examples of how businesses have carried out effective market research in the past so you can apply these learnings to your own market research.

Nextdoor

Nextdoor is a local networking site that allows users to connect with businesses and other users in the local area. In late 2022 and early 2023, Nextdoor was seeking to attract new advertisers by showcasing its engaged audience and the unique nature of the platform. They started their market research by generating a report through the consumer research platform GWI, with the aim of finding the distinct features of the audiences making up their user base compared to users on other platforms. They then repeated this process focusing on the Nextdoor for Business platform. This allowed them to draw on pre-existing datasets recorded from their internal user data, user surveys, as well as the GWI database. By focusing on this platform, Nextdoor was able to focus on numerical datasets which showed some of the core values motivating their users’ behaviour, such as:

• A preference for local businesses.

• Placing a lot of value on business recommendations from their neighbours.

• A desire to build connections with other members of their community.

Finally, Nextdoor organised their findings that proved these insights in an intuitive data set, highlighting key industry verticals and can now pinpoint and display trends that are relevant to both new and existing businesses using their service. From there, they were able to share these insights with potential advertisers and give them a clear, objective view of the audience they could potentially reach by advertising a business on their platform.

Sodexo

Sodexo, a catering company, wanted to gain more insight into their buyer journeys in order to have a more informed marketing strategy.

Supplying their services to a range of different clients, the business wanted to find converging points of commonality between different buyer personas and fulfil several objectives for all audience segments during the buyer journey. These objectives included:

• Understand how to engage with buyers at the early stages of the buyer journey.

• Build a more detailed picture of the pain points, challenges, and moments of success occurring throughout the buyer journey.

• Develop an understanding of the emotional needs of prospects and clients.

• Understand the extent to which the motivations and pain points of different audience segments varied by industry and type of business.

With their objectives established, the research company that Sodexo partnered with carried out 100 detailed phone interviews with the business' prospects and clients. They focused on a variety of job roles for this part of the project but restricted the interviews to people who were actively involved in outsourcing. When the data was collated, Sodexo had a number of insights on the buyer journey they could apply to their future marketing strategy, with a particular emphasis on the perceived benefits of outsourced catering services as seen by their target market.

This directly enabled Sodexo to adjust their marketing messaging to highlight the solutions they could offer their clients, and carry out more targeted and successful campaigns.

EcoVadis

EcoVadis, a sustainability consultant, works with large manufacturing suppliers to assert and improve environmental, social, and governance (ESG) scores in order to attract new buyers. Before their market research project, the business had encountered a challenge in that many supplier organisations weren’t aware of how they could get this kind of rating, or the value that it offered. To solve this, the EcoVadis aimed to: 

• Create a marketing strategy that differentiated the EcoVadis brand from other ratings companies.

• Raise awareness of the functions and value in improving a business' ESG score.

To inform this marketing drive, EcoVadis’s market research surveyed a large group of decision-makers at businesses that fit their audience profile, specifically looking to evaluate its ‘brand health’ compared to other businesses in this space. This research project found that while EcoVadis’s visibility was strong compared to many of its close competitors. There were still improvements to be made in the way they communicated their value proposition so that targeted decision makers were compelled to hire them. The lessons learned from this competitor analysis allowed EcoVadis to review their marketing strategy and improve brand messaging to communicate USPs more effectively.

Industry-specific pitfalls to avoid during market research 

No 2 business niches are exactly alike. Like with any other facet of your business, you’ll need to consider how your industry and business model will affect the practicalities of your market research. There are a range of industry-specific pitfalls in market research, ranging from factors affecting locality, product, audience demographics, and market forces out of your control. Here are some examples of industry-specific pitfalls that you should work to avoid during your market research.

Pubs and bars

Ignoring preferences in your local area: Pubs and bars thrive on a localised customers and foot traffic. Your market research should be informed by a deep understanding of your local customer base and target market. Not taking the time to understand the buying habits and cultural nuances of the customers in your geographic area can taint the value of your following research activities. Lacklustre competitor research: Pubs, restaurants, and similar hospitality businesses that have been established for a long time enjoy strong customer loyalty, which can make the competitive landscape very hard to penetrate.

Underestimating your competition through lacklustre competitor research can undermine the potential impact of your market research resulting in a poor understanding of their strengths, weaknesses, strategies, and market presence.

Bakeries

Not distributing samples: The success of a small bakery is often dictated by the taste and quality of their goods in the eyes of their customers. Running market research that allows your audience to taste samples and share their opinion is paramount to better understanding the views and opinions of your target customers. These valuable takeaways and insights can act as a strong indication of how your current offering is perceived in the marketplace and be used to inform future research initiatives. Not researching seasonal demand: Many bakeries are strongly affected by seasonal demand, with significant spikes during national holidays and noticeable dips at other times in the year. Failing to research this factor and make it a guiding principle in your future research can also cap the potential of your market research’s effectiveness. Overlooking trends: Trends like the customer demand for particular trending ingredients or baked goods that meet dietary preferences or requirements should also be a consideration for bakeries. Make sure you’re setting aside time and resource to consider and understand emerging trends and making this a consideration in your market research.

Salons

Lacklustre demographic research: Different audience segments may have very different ideas of what they want from a salon. It’s important not to generalise your audience, and instead create specific buyer personas to effectively segment the market and understand how demands differ from one demographic to the next. Not making pricing strategy a priority: Like other service-based businesses, the pricing strategy of a salon can be a major influence on your long-term success.

Fail to make pricing a critical part of your market research, and your research could lead you into overpricing or underpricing your services relative to the local market. Neglecting digital market research: Though salons are localised businesses, there’s still a huge amount of potential in generating attention through digital channels like social media or online search marketing.

Catering and food delivery

Underestimating the impact of logistics: Logistics will have a significant impact on the success of any business that relies heavily on delivery services. Research on market forces and standards in areas like food safety, transportation, timing, and more, can all foster valuable insights for how you should direct your business strategy. Make sure you’re not neglecting this area of research if you’re in the catering and food delivery niche. Neglecting to research dietary needs and trends: The dietary preferences of your audience, whether they’re health-conscious, ethical, cultural or otherwise, can have a major impact on the conclusions you arrive at through your research. Make sure this topic is central to your market research to maximise the value of your project. Forgetting the product: Audience feedback on the quality of food products is essential for research that leads to improved recipes, higher service quality, and more satisfied customers. Don’t neglect to establish channels for detailed feedback if you want your research to have practical value.

How much does market research cost?

There’s a huge range of variance when it comes to how much businesses spend on market research and it will appear as part of your small business forecasts and financial analysis.

Unfortunately, there’s no single formula or rule that can determine how much your market research will cost you or should be budgeted for. The most reliable way to determine the budget you should set aside is by researching the volume of data you’ll need for your research, and the cost of various market research tools and services that will allow you to achieve this. Before you start mapping out specific research activities and the costs involved, you can get a general idea of your market research budget by looking at the following factors:

• The type of research needed to achieve your goals and the cost of activities associated with it, such as labour and travel expenses.

• The sample size (number of participants you’ll need as part of your research).

• The number of people in your local population who match your target audience, and have a close enough match to your relevant buyer personas.

Disclaimer: The contents of this page are intended for informational purposes only and should not be construed as professional advice. For matters requiring legal or financial expertise, it’s recommended to seek guidance from qualified professionals.