What's the best way to conduct market research on a budget?

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Getting the opinions of five people cannot possibly be a predictor of success. You need a larger sample base, for one thing. But when it comes to research it's important to fit the type of study to your information goals.

Some companies with new products go into a beta testing phase, where they supply the product to members of the target audience and monitor how they enjoy using it--and this is something you can do with virtually no budget at all.

Another option is to introduce the product to groups and observe their reactions. You don't need formal focus groups for this, just several gatherings (or even roundtables) of people who are representative of your target audience, the right facility, and well planned meetings. Also, be sure to look at all published information concerning the market and purchasers of products that you deem similar to the one you plan to introduce. And by the way, you'll definitely need that identity package no matter how you choose to proceed.
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