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Starting a Business? 4 Ways to Research Your Potential Customer. Here's the lowdown on how to talk to your target market and find out if there's enough opportunity available to start a business.

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In their book, Start Your Own Business, the staff of Entrepreneur Media, Inc. guides you through the critical steps to starting a business, then supports you in surviving the first three years as a business owner. In this edited excerpt, the authors describe what primary research is and how you can use it to judge the viability of your business idea.

The secondary research you conduct should help you focus your niche and get a better idea of the challenges facing your business. To get a complete picture of your target market, however, you'll need to do some primary research as well.

A market research firm can help you if you feel that primary research is too complicated to do on your own. These firms will charge a few thousand dollars or more, but depending on the complexity of the information you need, you may feel the money's well-spent. Your local chamber of commerce can recommend firms or individuals who can conduct market research for smaller businesses on a budget.

If you need assistance but don't want to spend that kind of cash, you can go to your SBA district office for guidance; counselors can help you figure out what types of questions you need to ask your target market. As with secondary research, the Small Business Administration, Small Business Development Centers, colleges and universities are good sources of help with primary research.

Whether you use students, get help from the SBA, use a market research firm or go it alone, there are simple ways you can get primary research information.

1. Focus groups.

A focus group consists of five to 12 potential customers who are asked their opinions in a group interview. Participants should fit your target market—for example, single men ages 18 to 25, or working mothers. To find participants, just go to your local mall or college campus and ask people fitting your customer profile if they would answer a few questions. You should expect to pay between $75 and $100 per participant in focus groups. Although focus group interviews are informal, you should have a list of questions to help you direct the discussion. Start by asking whether your product or service is one the participants would buy. If so, what's the highest price they would pay? Where would they shop for such a product? Do they like or dislike the product's packaging? Your questions should center on predetermined objectives, such as determining how high you can price your product or service or what to name your business. .

If you're going the do-it-yourself route, you'll probably act as the focus group moderator. Encourage an open-ended flow of conversation, and be sure to solicit comments from quieter members, or you may end up getting all your information from only the talkative participants.

2. Telephone interviews.

This is an inexpensive, fast way to get information from potential customers. Prepare a script before making the calls to ensure you cover all your objectives. Most people don't like to spend a lot of time on the phone, so keep your questions simple, clearly worded and brief. If you don't have time to make the calls yourself, hire college students or freelancers through or another site to do it for you.

3. Direct-mail interviews.

If you want to survey a wider audience, direct mail can be just the ticket. Your survey can be as simple as a postcard or as elaborate as a cover letter, questionnaire and reply envelope Keep questionnaires to a maximum of one page, and ask no more than 20 questions. Ideally, direct-mail surveys should be simple, structured with "yes/no" or "agree/disagree" check-off boxes so respondents can answer quickly and easily. If possible, only ask for one or two write-in answers at most.

4. Email interviews.

Many of the principles used in direct-mail interviews also apply to these surveys. Give clear instructions on how to respond, and be appreciative in advance for the data you get back.

But how do you get the names of potential customers to call or mail questionnaires to? You can get lists from many places, including your suppliers, trade associations or a list-rental company. List-rental companies can give you access to a mailing list of a group of people who fit into your desired market. Refer to your local Yellow Pages for the names of list-rental companies. If none are listed, contact the Direct Marketing Association.

A less sophisticated approach to finding potential customer names is picking them at random from the phone book. If you've developed a latex glove for doctors, for example, you can get doctors' names out of the Yellow Pages. Whatever method you use to gather your information, the key to market research is using what you learn. The most sophisticated survey in the world does you no good if you ignore the information and the feedback customers provide.

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