A difficult task for any business is conducting market research. This research can impact a business in many ways including how they brand their products and who they market to. Although market research can aide a lot with your businesses marketing efforts, it also plays a key role when your business is attempting to obtain financing. The lenders or investors main objective when evaluating your business is to determine whether or not they will get their money back.
Good market research will help set your potential lenders mind at ease, and you will be more apt to obtain the business capital you need. The lender also wants to know things about the market such as the competition and the demand for your product or services. To begin the process of researching your market you can start by searching trade associations, trade show websites, and trade magazines. They exist in nearly every industry and can supply a wealth of information related to your market. The best part is that many of the trade related websites provide the information free of charge.
The government also provides a number of valuable resources for market research. For example, the Economic Census, released every five years from the U.S. Census Bureau, provides an excellent glimpse at industrial activity including the Industry Series report that offers separate reports for many industries and shows the number of businesses within an industry, sales volume, number of employees, and more. Other good resources for market researching are corporate websites of your competition and press releases from your competition. White papers provide good market research data because they are well-researched documents.
Magazines and Newspapers are another inexpensive resource for market research. As part of their research for articles journalists often gain access to expensive market research reports which may be mentioned in an article. Additionally, expert sites such as Google Answers provide value in offering direction to someone who seeks information.
They don't provide the hard numbers you may be looking for, but you may find the expert opinions useful when putting together your market research. Finally, another inexpensive resource for obtaining market data can be found at Academic Research Centers. Market research companies and investment houses are expensive alternatives to market research. The information found with a market research company is generally well researched and contains extensive product/industry metrics and statistics, including forecasts and trend analysis. It is not uncommon to pay well into the thousands of dollars for a report that is only a hundred or so pages long.
Since money is typically tight for a business starting out, it's best to go after your market research using the methods above for gathering free and inexpensive research data. Although market research is extremely important to your business plan and your business capital search, it is only one piece of the puzzle. Before a lender even looks at your market research they will look at things such as your business management team's experience, your past business successes, and your "lending character" or your ability to repay a loan.
It is vital that you not only have a good business plan, but you also need a good business financing plan as well.
Corey Pierce is the CEO of BusinessFinance.com a business capital search engine with the funding criteria of 4,000+ sources for business capital. Visit www.businessfinance.com to search the funding directory for free.