How to do market research for a small business

Wondering how to do market research for a small business? We’re here with tips and strategies to fit your budget without missing out on quality data.

If you’re running a small business, you are often a one-person-does-all kind of CEO. You’re involved in marketing, know customers by name, negotiate with suppliers and are somewhat of a Human Resources manager as well. 

Wearing so many hats means you need to make countless decisions—can you also be expected to gather consumer insights from your target audience as well?

For businesses of every size, it’s crucial that their decision-making process includes collecting real-world data in the market. But you probably don’t have access to a whole research department. 

Fear not! There are plenty of ways for small business owners with big dreams to conduct meaningful market research. In this guide, we’ll walk you through it.

Why is market research good for a small business?

Running market research for small businesses is only one of a huge number of responsibilities—it’s easy to feel like other projects have higher priority. 

But let us remind you why market analysis is so important—and will make all those other tasks a whole lot more efficient. 

To minimize risks 

Small businesses usually don’t have a huge buffer to experiment—you might not have millions of dollars in funding to spend at the drop of a hat. So decisions you take can’t be as risky as when Coca-Cola does it, for instance. You need to think it through, and preferably have supporting data to back up your choices. 

To get to know your competitors

Whether you’re a local player, or a small online business operating worldwide, it’s crucial that you really get to know your competition. By analyzing their past decisions and current positions, you get a good idea of what works in your market, and what doesn’t.

To get to know your customers

If anything, small businesses have a benefit due to their size: it’s easier to connect to their existing customers, and new ones. Think about it from the customer perspective: you’re probably more able to connect with the people working in your local, family-run furniture store, than with one of the faces in IKEA—right? Leverage that strength and get to know your customers even better through market research, to really serve them what they want. 

To allocate budget better

Oftentimes, small business owners follow the footsteps of the giants and use their marketing tactics. They invest tons in their advertising or marketing plan, just because the competition dictates it. But what if market research would show you that there are way better places you could put your money, to reach specific parts of your target market? 

Budget-friendly market research tactics

While doing your budget, chances are you did not allocate a lot of budget to market research. Instead, you’d rather focus on the things that you immediately see the effects of. 

Understandable, but unfortunately not the recipe for success. Because we want small business owners to experience how market research can lay a solid foundation for their long-term plans, we’ll focus on some ways you can conduct market research in a cost- and time effective way. 

Use smart tools for competitor analysis

As a small business owner, you can’t go undercover in your competitors’ business. But how do you find out how you can leverage your competitive edge without dressing up as three pomeranians in a trench coat? 

Luckily, there are other, more discreet ways to get an idea of what the competition is doing. For instance, you can look into Google searches and social mentions to find out what customers are saying about you and your competitors on the web. Who’s getting more positive reviews—and more importantly: what are people valuing highly in their reviews? This can all give you a good flavour of what people think about brands. 

Check out all our recommendations on brand management tools.

Of course, the competitive landscape doesn’t just consist of social media mentions and online reviews, so you should also look at their pricing strategies and online marketing tactics. 

Do an online deep-dive into industry trends

When you’re opening a new business, do some exploratory research on what the market (or similar markets) looks like to predict whether your new idea or product will be a success. 

Gather data on trends in spending, how target groups have evolved, which marketing tactics businesses in this industry use and what platforms are popular.

A lot of your industry research you can do online research, especially if you want to gather data on quantities and such—but don’t forget you can also talk to industry experts. 

Here are some (free!) resources you can use:

Research databases

• Google Scholar 
• Science.gov
• ResearchGate
• Google Trends
• Statista
• Mckinsey

Use online surveys for first-hand information

Effective market research is a combination of primary research and secondary research. With just desk research, reports and books (secondary research), you’ll get a frozen-in-time idea of your market. You can bring it to life with first-hand customer insights (primary research).  

The best way to do that is by surveying potential, existing or past customers—depending on the goals and gaps of your research.

You can use online surveys to gather customer feedback or test a business idea—and so much more… 

Don’t think that there’s no use in asking your customers for input, because they ‘don’t know what your business is like’. Actually, you don’t have the same perspective as them either, so you could both learn from each other. 

And even though you’re a small business, that doesn’t mean you have to settle for a small audience to base your decisions on. On the contrary: you should still be aiming for a large enough survey sample size. With our online survey tool, you get access to 125 million people, from which you can easily filter and pick the ideal customer segments relevant to your business.

If it’s your first time doing market research, or you need a little bit of inspiration, have a look at our market analysis template here to see what areas we would definitely cover. And feel free to put your own spin on it to make it perfect for your business!

Give context to data with focus groups and interviews

With a focus group or by conducting interviews you can collect really useful in-depth information. 

Depending on the goal of the research, you could talk to your most loyal customers or prospective customers in focus groups, to either find out how to increase their CLTV (customer lifetime value) or how to lure them in in the first place. 

If you sell a super niche product or want information on customers about their motives or emotions which you simply couldn’t ask about in an online survey, try to find people in your target audience who are willing to give an interview. 

Make sure this aspect of market research also shows them what they’re getting out of it: don’t just thank them for their time, but also give insights into the results or incentives.

Remember, the best people to ask how you can delight potential customers, are your actual target customers. 

How to conduct market research for a small business

Excited, but not sure where to start? Let’s take a step back and look at the steps you go through when conducting market research.

1. Determine the goal of your market research

While it’s good to ‘just be curious’, market research without a clear purpose could quickly take up a lot of time and resources, without giving you a real ROI.

Here are some objectives of market research that could be relevant to small businesses. Let them inspire you and create your own. 

• NPD: Researching the viability of a new product
• Creative testing: Marketing research into which messages, imagery and marketing assets are most effective to your ideal customers
• Positioning: Researching competitors pricing and USPs
• Market analysis: Researching changing needs of consumers or exploring new target markets and potential customers
• And there are loads more…

While designing and conducting your market research, keep your key goal(s) in mind, always, and ask yourself with every step: is this in line with the goal of the research.

2. Make a plan (and stick to it)

Often, market research can feel too big, and too unpredictable. While it’s great to experiment, you want to stick to your objectives and plan in your market research, because this will give you control over your timeline, budget and keep stakeholders happy.

So, make a customer research plan. Include how long each phase will take, who’s responsible for what and which tools will be used. This will make it a lot easier to not only conduct the market research now, but also evaluate in the future how to do it better.

3. Choose your tools wisely

We did our market research as well, and know that we’re certainly not the only market research tool out there. Especially when it comes to tools for primary research—platforms like Attest—it’s crucial that you pick something that fits your budget and has all the features you need. So, do your research into that as well: start by determining what you really need (and what you don’t), and then cross-reference the tools you found to that list. 

4. Analyze and implement your findings

Market research for small businesses shouldn’t end up as a paper plane source. Be willing to let the results of your market research impact your business strategy. If you pick up on signals during your research that you should change some things, do that ASAP. And don’t forget to check back in regularly and run market research iteratively, to make sure you’re always up to date with your market.

We make conducting market research cost-effective

Look beyond the fact that market research costs you time and resources, and focus on how—if you do it right—it can pay itself back in exactly that. 

Market research is invaluable for businesses of every size, and small businesses can no longer hide behind the excuses of not having the right tools at hand—thanks to platforms like Attest. 

FAQs about small business market research