Are you wondering how to do market research for your business?
Market research is one of the most important parts of going into business and staying in business. So, what should you be researching? How do you do it?
The Why & When Of Market Research
Without real market research, you aren’t even really flying your business on a reasonable hope of success. It’s not even a calculated gamble.
Surprisingly, very few would-be entrepreneurs and new business owners seem to really do much in this area at all. This could certainly be a big contributor to the extremely high rates of new business failures. Without this data, you simply have zero ideas whether this is a good business idea, what you are up against, and what the true potential is.
If you don’t know these answers, then you can’t share them with potential investors either. If they aren’t confident in the data or see you’ve just been too lazy or careless to do the work, then why on earth would you expect them to give you their hard-earned capital?
Given the importance of this step in starting a business, it is one of the first things you should do before getting started. Some spend months on this step alone.
It shouldn’t be a one time deal either. Markets, the economy, consumers, and technology change frequently. This research should be freshened up regularly. Especially when creating pitch decks for new fundraising rounds.
This will also help you be alert to important pivots and be sure you are making the right pivots.
Also, keep in mind that knowing how to do market research for your business is critical before fundraising. In this regard, remember that storytelling plays a key role in fundraising and you will need capital to scale things up. This is being able to capture the essence of the business in 15 to 20 slides. For a winning deck, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
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What To Research
1) The Problem
Is the problem you’ve encountered and want to solve really a problem for others too? Do others share this same pain?
2) Availability Of Solutions
If there is a problem you can validate, is there already a solution out there? This is one of the most common fundamental mistakes that aspiring entrepreneurs make. If there is a clear and pressing problem or inefficiency, has someone else already created the solution?
Make sure you know. If they haven’t or no one has sustained a business offering a solution in this market, why not? What is so hard or unprofitable about this space that has kept others out, or has caused others to fail?
This is one of the most important areas when it comes down to how to do market research for your business. Who are your competitors? How many do you have? Who will likely become your competitors when they see you making moves and having success in this space?
If there are existing competitors, what are they doing well and not? What are their strengths and weaknesses? What opportunities are they overlooking?
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