Ask M&M: First step in establishing business must be market research

According to the Business and IP Center, “Market research should never be underestimated. Many successful new businesses enjoy longevity because their owners conduct regular market research to understand their target market, identify consumer problems and pinpoint realistic competitors.”

You want to search for existing research that is already out there. What type of customer will you encounter? How about looking at who in your market is doing the same thing or something similar?

Be cautious of using data that is too old. The world is changing rapidly and you need to be on to the latest trends and possibly be the one to shift your market toward the future. The latest is usually the greatest.

Find out what competing products and services are already in your market and what you can do to outcompete.

Is the population large enough to support everyone? Can competitors’ locations be beat? Is there room to charge what you need to in order to generate a profit? Are the costs to do this business in this market too high? What is the likelihood of a new competitor entering this market?

Market research is a process to enable you to analyze the data available to assist you in forecasting if this new idea is as good as you think it is.

ASK M&M is prepared and submitted by Mark Schmitt, director of the Small Business Development Center at Cochise College; and Mignonne Hollis, executive director at the Arizona Economic Development Foundation. To ask your questions: Call the Small Business Development Center (SBDC) at Cochise College (520) 515-5478 or email schmittm@cochise.edu or contact the Arizona Regional’ Economic Development Foundation at (520) 458-6948 or email hollism@aredf.org; www.aredf.org.