How to do Market Research as a Small Business with No Money
If you are starting a business, one of the first things you might set out to do is do some market research. A lot of big companies pay good money to do market research, where firms, analysts, and internal teams do this as their full time job. They might also pay hundreds or thousands of dollars for ongoing reports about the current state of the market.
Unfortunately, most small businesses can’t afford this expense and are usually tasked with doing market research themselves, relying on only free resources. But when you sit down in front of your computer ready to do this so-called “market research”, you suddenly find yourself very stuck. Where do you even start?
The Shelbru team also felt this when we started to do our market research. But luckily, we’ve gone through all the trials and tribulations so that you wouldn’t have to! As a small business that spent a total of $0 for their market research, here are the tips and tricks we’ve gathered that should provide a guideline for how you can start doing market research for your own company.
First things first, you need a template. Without the template guiding you, you’ll feel overwhelmed and disorganized. The template creates a great framework for you to work within and provides specific instructions about what you should be looking for, which makes the endless searching and scrolling less daunting. Generally, we looked at these questions in this order:
Overall size of the market:
- What is the size of the market revenue wise?
- Is this market big enough to enter?
- What are growth projections for the market?
- Is this growth big enough to enter the market?
- Is the market growing, stagnating, or declining? And if so, at what pace?
Market Drivers and Trends:
- Are there any significant market drivers? For example, a specific sub-category of the market is driving majority of the growth
- Are there any noticeable trends in the market? For example, the key demographic is shifting
- What do these drivers and trends mean for the market overall?
- What opportunities are there?
- What challenges does the market face at the moment?
- What challenges could the market face in the future?
- How big of a threat are these challenges?
- Can you overcome these challenges with the product you have in mind? How?
- What is the demographic profile of your target market (age, gender, geographic location, income level, educational background, employment situation, etc.)
- What are their key shopping habits? For example, they are bargain shoppers that value discounts and coupons
- Who are the primary competitors in the market?
- What do they offer?
- What is their branding and positioning?
- What is their price point?
- What do customers say about them?
- What is their estimated annual revenue?
- What are their strengths and weaknesses?
These are the general questions that you should seek to answer and use as your guideline to direct your market research journey. Once you try to seek out answers to these questions, you should have a much better idea about the type of information you are looking for.
Now that we’ve addressed which questions you should be answering, let’s talk about how you should actually go about finding these answers.
Google is your best friend
As anticlimactic as it sounds, searching on Google really is a majority of what you’ll be doing. To answer each of these questions, we searched for a variety of search terms until we pieced together all the information we could find. You can start vaguely with a search term like “cold brew market” or “cold brew market size” and start to play around with the search terms to narrow down the results that you would like. We also started going deep into the pages of the search results rather than lingering around page 1~2. If you are hoping to find information for free, you have to be willing to do a lot of digging.
Industry and market research sites
These sites will usually come up in your Google search but especially to answer very high-level questions about our market, we relied heavily on a combination of websites that provide industry reports. Now the trick with most of these sites is that to get more information or the full report, you have to be willing to pay. But a lot of these sites will also provide a free preview or some summary information. Because the type of information given in these free previews are different across different sites, checking 6–12 different report freebies can actually yield a lot more information than you would think.
Also, we like to look for articles or blog posts of people in the industry referencing these reports and basically summarizing some parts of it for you. This is also a free way to get extra information off of these reports. But always double check that the site referencing the reports is credible and can actually analyze the information properly.
If you haven’t used Google Trends yet, you’re missing out. Google Trends provides you free data on the trends and popularity of their search queries. Especially if your target geographic market is a region that mostly uses Google for their search queries, Google Trends can provide valuable insights about your market’s seasonality, popularity, search volume, and any other trends you should note.
Since you have to search for a specific search query, I would use a couple of varieties instead of just relying on one. For instance, for Shelbru, we can look for “cold brew”, “cold brew maker”, and “cold brew set”.
Now that everyone feels the need to share everything online, social media has actually become a pretty handy tool for some high level market research. Especially when it comes to digging into customer feedback and buyer persona, social media platforms can really open your eyes to what is really going on on the ground floor.
To start looking on social media, we usually will search for key hashtags. So we might search for #coldbrew and see what types of posts are up. Are they all for a specific sub-category of the cold brew market? Do people like to show off cold brew that they drink at home or cold brew that they’ve purchased in a coffee shop? And as creepy as it sounds, check the user’s profile to see what kind of personality they are. Are they living in an urban area? Are they mid thirties married with kids or are they in their early twenties just starting their first job out of college?
Then I like to check the profiles of our main competitors and see not just how they position themselves and how they manage their social media pages but also see what type of feedback people are leaving on their posts. This not only provides some product-specific feedback about what they like and don’t like but also provides insight into how customers generally talk about your product category, what they are seeking from it, and what catches their attention.
Amazon reviews or review sites
If a similar product is being sold on Amazon at the moment, reading through the reviews on those product listings can prove to be incredibly insightful and valuable. This is a great way to gauge people’s temperature about certain types of pricing strategies, see what they value in the product (is it design, functionality, etc.?), and see the type of customer that the product attracts. If your type of product is not listed on Amazon but there are review sites that have them listed, definitely check those out as well! For example, if you’re entering the SaaS space, review sites like G2 are great ways to read direct customer feedback.
Also, you can use Amazon to see how many products in your category are listed, how they rank, and there are a lot of tools out there that will help you check how much revenue the listing is generating. We like to use Jungle Scout for revenue estimations of listings and it has proven to be super helpful when trying to gauge how much revenue our product category generates.
Even using these 5 resources, you will be surprised at how much information you can dig up. But there are scenarios where it might be worth spending some money on market research. One would be if your product will take a significant amount of capital and resources to build — then spending a couple hundred dollars or even a couple thousand dollars on market research to make sure you are entering the correct market with the correct product might be chump change in the long run. Or if you have a product that is going to be very hard to change or pivot later on, you might also want to invest in some market research so you do it right the first time.
But for most small businesses, especially online businesses, this is not the case. You can afford to pivot later on at minimal costs. Then the hundreds or thousands of dollars you would have spent on market research can be allocated towards other more resourceful channels, like the actual development and marketing of your product. And with so much free information readily available online lately, there’s no reason why you shouldn’t take advantage!
Shelbru has designed the perfect cold brew system — a brewer and carafe set — to help you level up your cold brew game! We will be launching our Kickstarter campaign this Spring to fund manufacturing and distribution and need your support.
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