Consider this: A small business owner in BC spends $30,000 on a product launch without knowing their demand, competition, or target markets first. The launch fails and they don’t know why. The market research they skipped would have cost a fraction of their investment, and led to a successful, fruitful launch. What could have been?
Running a small business, making all your big decisions on gut feeling seems cost-effective, but in reality it is a luxury you cannot afford. Every dollar you spend on marketing, product development, or hiring is a bet. Market research is how you stack the odds in your favour.
It is the process of gathering data to answer critical business questions: Who is my customer? Will they pay for this? Who am I competing against? How can I attract the largest amount of people possible to my products? And so on…
This guide will show you how to conduct your own research affordably, and how to recognize when it is time to bring in the experts.
The Basics: Primary vs. Secondary Research
Generally speaking, market research can be divided into two core buckets:
- Secondary Research: Data that already exists. It is cheaper and faster to gather. Examples include Statistics Canada, competitor websites, and industry reports. This can give you key information on your landscape in the bigger picture, but remember you are constrained by what is available.
- Primary Research (The Deep Dive): Original data you collect yourself, specifically about your business, your customers, and your market. Examples include customer interviews, online surveys, and focus groups. This gives you the specifics you need to understand about the bigger picture AND the deeper dive. While this takes more investment (time and money), it allows for you (when done right) to collect the answers to all of the questions you may need to figure out.
It is always advisable to start by pinpointing all the information/answers you need to achieve your goals. Then, start by seeing what is available via secondary research, and use primary research to fill in the specific gaps that secondary data cannot answer.
A 5-Step Framework for Small Business Market Research
You may use the following as a reference guide for how to go about conducting the research you need in a way that can bring you as much value as possible:
- Step 1 – Define your objectives: Do not just “gather data.” Ask a specific business question. “Why are our sales dropping in Q3?” is a research objective. “Look at sales anywhere” is not. A clear objective determines every decision that follows.
- Step 2 – Scan what is out there: If there is data that is reputable and can lead to your answers, skip the primary research and go right to the source! This will save you time and money. However usually this isn’t the case. Every business is unique in its own way, and so are their objectives at any given time. So it is helpful to consult what is out there already, but also rare that all your answers are already out there at your disposal.
- Step 3 – Define your target audience: If you need more data than what is out there, its time to identify your target audience. You cannot survey everyone. Define the exact area/group of people you need answers from. Feedback from the wrong audience is the same (or could be even worse) than no feedback at all.
- Step 4 – Choose the right method: Use surveys for broad quantitative data (e.g., “What percentage of our customers would pay $X for this feature?”). Use interviews for deep qualitative “why” answers (e.g., “Why did you choose a competitor?”). Often times, when you have the resources, use a combination of secondary and primary research to go even further with your analyses.
- Step 5 – Analyze and act: Data is useless without interpretation. Data must be analyzed in a proper, objective way. And numbers can be misleading. Context, rigour, and technical skills are key to translate large data sets into actual business decisions. Connect every finding back to the original business question, identify actions the data is telling you to take, and prioritize the actions that are feasible, actionable, and should be done first!
Free and Affordable Tools to Get Started
Today we live in a world where there are many helpful and affordable (and often free!) tools to get you started on doing your own research. Some key ones include:
- Statistics Canada: For demographic data, industry profiles, and market sizing. These are free, credible, and specifically Canadian.
- Google Trends: For understanding what your target customers are searching for, how demand is shifting, and how your market compares regionally across provinces.
- Social listening: Facebook groups, Reddit threads, and LinkedIn comments in your industry are a free window into what your customers are frustrated by and what they wish existed.
- Survey tools: Google Forms, Typeform, Survey Monkey all offer free tiers for basic surveys. Use these for quick pulse checks, but read Step 5 above before you do.
A word of caution on free survey tools: The tool is the easy part. The hard part is designing questions that actually will lead to an objective and comprehensive set of answers for you to trust and take away (e.g., do not accidentally lead the respondent to the answer you want to hear), and deciding who you actually need to hear from.
This is where professional research design makes a significant difference.
The Danger of DIY: When to Hire a Professional Firm
DIY’ing the research that your company needs is a great way to save a bit on costs as opposed to having a professional firm (especially for smaller businesses and start-ups with limited funds). That said, there are many shortcomings that are commonly seen to be aware of:
- The Bias Trap: One of the most important parts of collecting the right data is to be objective, and this can be failed if at any point bias seeps in to your design, the questions you ask, how you interpret the data, etc. Believe it or not, objectivity that an outside firm brings is one of the most important parts that is often missed by companies who do the study themselves.
- The Design Flaw Problem: Companies do a great job typically of defining the objectives of the research they want to do. But the next part is just as important – designing your research plan. Methodology, sample audience, sample size, and construction of your methodology (e.g., focus group question guides, survey content, etc.). There are so many little things and nuances in this stage that even many big research firms miss, and this is where your study starts to miss out on perfection. And missing out on perfection can be the difference in making the right decision from your data vs. the wrong one.
- The Interpretation Gap: Collecting data is only half the job. Turning raw data into a clear strategic recommendation requires analytical expertise and business judgment that most DIY tools cannot provide, and a skill that takes many years in research and analysis to even begin to approach excellence.
- The “Low-Cost” Myth: You wouldn’t believe how often a DIY research mission turns into one or both of the following: takes the person so much time to do the study that they could have spent doing the tasks at work they are best suited for, or the end-product of the research conducted has significant gaps in proficiency and the company ends up hiring a firm afterwards to do it the right way.
As much as we wish it didn’t, both of these scenarios happen all the time. And both result in the research that was supposed to shortcut around time and money investments actually costing more than it would have been to just hire a true professional market research firm in the first place.
This desire to connect excellent research while still shortcutting around time and cost investments is where the Bondar Group offers solutions that other firms cannot. With our business model of exclusively senior leaders (all our researchers have decade+ worth of experience), a hyper-focussed client service model (we take on fewer projects at a time so that we can streamline your project while providing extra focus on you), and our different service offerings (we can do end-to-end full market service studies or just help out on one particular nagging piece of your research), this company was made to offer small businesses like yours a place where you can assure the best quality research while avoiding risks around time and cost concerns.
Conclusion
In summary, research is vital to a business of any size and in our opinion, perhaps most important to newer and small businesses. This is because the major decisions your business needs to make can make or break your entire operation!
Given the gravity of these decisions, we recommend strongly not to rely on guesswork and gut feelings when there is a much more foolproof tool out there at your disposal.
Doing research is the tool to informing your decisions and equipping your firm with the best possible insurance that you make the very best choices when it comes to these make or break times.
We highly recommend you always start by defining your objectives of what you need to find out, then seeing what data is out there via secondary research, and bringing in primary research to fill in the gaps.
Bondar Group Consulting believes in all cases that you should be doing research that is as timely and cost-effective as possible. While DIY’ing it can be a great way to achieve this in theory, you must be aware of its common pitfalls that can lead to failing to achieve your objectives, and incurring more time and cost investment then you would have spent having just hired a professional firm in the first place.
We are here to help – whether its through an end-to-end study we work with you to complete, just helping with one part of your research and leaving the rest up to you, or even simply just getting on a call to help make sure you are heading in the right direction (which we will do for free!), all of our solutions are aimed at you getting the insights you need to optimize your go-to-market strategy while avoiding the cost and time investments that bog businesses down. Contact us today and we can help get you there!
Frequently Asked Questions About Market Research for Small Businesses
Before you start down your research journey, it may be helpful to answer some commonly asked questions we receive from other small businesses?
How much does market research cost for a small business?
It is a wide range! It depends on what you need to achieve, and what company you hire. That said, the foundation of our company is to provide a place where businesses like yours can hire a research firm that brings unparalleled expertise to your research initiative while still providing low cost and quick turnarounds.
Can I do my own market research without hiring a firm?
Absolutely! Just be mindful of the many shortcomings (see the above section) that do typically come from DIY research. Be aware of these and consider the risks before you decide to set out on your own. A popular solution is to just hire out for one piece of the study – for example, you can hire us to help you get started and tell you the optimal plan and methodology so that you can take the rest knowing you are doing the best possible path to your end goals.
What is the difference between primary and secondary research?
Secondary research is using publicly available data to provide insights that will inform the questions you need answering. Primary research is when you create your own data through various forms of research like surveys, focus groups, etc. Our suggestion is always to use secondary research for the data you need, and primary research when the data you need cannot all be found in the public domain.
How do I find my target market as a small business?
Complex question, but a simple framework to help you answer it: you need to identify which subgroups of your population (whether that’s certain demographics, geographic areas, industries, etc.) will be most interested in the concept of your products/services, and which will not! This is where primary research comes in: why make guesses about this when you can go find out straight from the source!