I hear statistics all the time such as..."80% of all small businesses fail in their first year."

Does this mean that small business success is largely the victim of bad luck? On the contrary, I believe that most failed small businesses result from with untested assumptions.

The answer lies is performing sufficient market research, which can be as easy as picking up the phone. Market research removes the risk and guesswork of developing your business, products and services, which I explain in my book, Get Slightly Famous:

Once you have a working idea of the market you'd like to serve, you need to dig deeper to test your assumptions. The process starts with market research: analyze your best potential customers, your competitors, your market's predisposition toward your products and services, and your ability to serve these people so well as to make you their vendor of choice.

Market research can provide relevant information for establishing a solid foundation under any business. Even if you have been in business for years, it's a good idea to stay up-to-date with market research that might help you understand where your market niche is going.

Market research can, among other things, help you understand your potential customers, the likelihood that they’ll buy your products and services, why they’ll buy them, and how much they’ll pay. Market research can also help you evaluate your competitors' strengths and weaknesses, thereby providing one of the keys to dominating your niche.

I've always held that market research is the most underutilized secret weapon for small business success. Ryan Schmidt, a past client and owner of a new software wholesale business, summarizes below how easy (and eye-opening) simple market research is for testing assumptions about your target market.

I've finally learned that the secret to positioning and growing any company for success is to conduct as much market research as possible.

Prior to conducting market research for SoftwareLot, I came up with services and marketing strategies that were based on my assumptions of what customers would want from my company. I was about to launch SoftwareLot.com based on these assumptions when you strongly suggested that I take time to do market research.

Following your advice, I created a list of the top 10-12 companies in the Pittsburgh area that showed the most potential of needing our services. I took several days to call each one and ask them a series of questions. I recorded all of my interviews on a tape recorder so I could go back and listen to our conversations and take notes.

I asked every company I talked to how much they paid for services like ours, what their profit margins were, how much software they purchased per month, and the top 3-4 most important aspects they expected their software vendors to have. I also asked what trade journals they read, what websites they visited, who their top vendors were, etc.

I also saw a trend in commonly used vendors, and I was able to visit their websites and create my product prices, return policies, shipping policies, etc., based on what these vendors were doing. When I talked with each prospect, I also explained SoftwareLot.com's business model and asked if they thought it was appealing, or if they saw any flaws in my model.

I found out a few surprising things. First of all, my original marketing strategy was going to be based solely on how cheap our prices are, because I thought that price was the most important buying factor for our potential clients. As it turns out, almost everyone I talked to told me that fast and reliable shipping was the most important thing to them, followed by an extremely efficient customer service department. Price came third.

Based on this information, I completely changed my marketing to focus on our fast FedEx shipping services and 24-hour customer support response time. I also discovered that I could increase my profit margins by 15% without hurting sales. This will dramatically increase our profits every month, and I never would have known that this was possible had I not taken the time to conduct this research.

Another great advantage to talking directly with prospects and customers is that they will tell you exactly how to sell them on your services, stressing what is most important to them. If you record the conversations, you can copy exactly what they say word for word in your marketing campaigns. It's extremely powerful.

Needless to say, I am very happy with my market research results. It has helped me establish a company that is tailored to provide exactly what potential prospects are looking for, and it has given me invaluable information that I can use for marketing, profit projections, and word-of-mouth marketing. The market research that I conducted has given me a complete idea of who my customers are, what they want, and how to sell them.

Thank you, Steven, for recommending this process to me. It's made all the difference in the world.

Good Sales,

Ryan K Schmidt, CEO
SoftwareLot.com, LLC
http://www.softwarelot.com