Business research is commonly conducted before expanding or opening a business. Entrepreneurs use the resulting data to predict the success of the company. Research can also predict possible problems for the business. Owners can then tailor the business model to address these issues so that they do not result in a low return of investment.
Primary Research Methods. These ways of conducting research gather data directly from target consumers. The owners or a paid research team can oversee the process.
- Surveys. Surveys can be conducted in person, over the phone or via a mailed or online questionnaire. People will answer specific questions regarding the business. This includes preferences regarding the business. A demographic profile also needs to be established so that the answers can be properly categorized. Information gathered with this method is often easily collated. Each question often has multiple-choice answers. This results in quantitative data that can easily be plotted on a graph or table.
- One-on-one Interviews. Small businesses can conduct in-depth interviews with about 5-10 people to get as much qualitative information as possible. The group can be demographically varied so that the business can test its impact on different kinds of people. Businesses targeting a specific group such as teens or married women, can conduct targeted interviews with people from this specific demographic. The resulting data is often anecdotal and may need further analysis.
- Focus Group Discussions. This method facilitates communication within a group. Similar to the interviews, these result in qualitative data. A maximum of three groups with no more than 10 participants each is considered sufficient for small businesses. Questions are asked of the group, and stimuli such as product samples may be introduced as well.
- Sales and Records (for existing businesses). Existing businesses can look to their own sales to conduct research. Researchers can track historical and seasonal increases or decreases in profit. This is especially beneficial when the research is to release new products or expand the business.
- Competitive Checks. This simply means checking the businesses of competitors. This research may be as simple as visiting their stores and taking note of their procedures, layout, consumer traffic and products. The resulting data can be used to check the weaknesses and strengths of the competition to properly position the business.
Secondary Research Methods. These methods of research use data that were accumulated by other sources. These may be political and statistical data gathered by trade papers or government agencies. Secondary research can be conducted via libraries or the Internet. Most online business resources already contain basic information on existing businesses. Specific industries also have their own newspapers, organizations and magazines. These can be useful to check the successful companies in each field.
Some of the more common online resources are Yahoo! Business, Business Stats Online and AllBusiness.com. Government agencies such as the Department of Commerce and US Census may also provide information.
Useful data that can be gathered using secondary research methods include demographic profiles of specific locations:
- Existing laws, ordinances and restrictions on erecting structures and starting businesses.
- Sales and profit of competitors and similar businesses.
- Seasonal affects on certain industries.