Market research is about gathering information—reliable information. As an entrepreneur, you have gathered a great deal of information in order to establish a business. Market research is just one more way to gather information about the marketplace and consumers.

Most small business owners can easily define their market, based upon the target audience for their products or services. Basic characteristics such as gender, age, income, etc. define the demographics of your consumers. Since most small businesses are doing business within a defined geographic area, another avenue of information is available. The U.S. Census Bureau has a wealth of information about the number of households, family size, income and age of the local populous. Much of the information can be accessed directly from the bureau’s Internet web site at http://www.census.gov Your local library is also a likely source of such data.

Keep tabs on consumer opinions. Find out what your current customers think about your goods and services. A popular and relatively inexpensive way to gather information about how your customers feel about your business and how deeply committed they are to your store or brands is through a focus group. A focus group is an informal way of researching consumer opinions. In this scenario, you organize the questions you want to ask and bring together a group of 8-12 customers, which represent the demographic range of your consumer base.

Participants should be selected randomly within the demographic framework, so you don’t tend to pick your most loyal customers. Normally, potential participants are invited to participate in the focus group and are offered an incentive for donating their time. The incentive might be a store discount coupon or a popular or limited edition item from the store. Once the date, time, place and participants are ready, bring the group together. Hire a moderator or invite in an industry colleague to conduct the focus group. Be sure to have a staff member attend meeting to listen to the feedback and take notes. Don’t attend the focus group yourself. As the owner, your presence may inhibit discussion.

Once the focus group is concluded, you may ask yourself what have I gained? The report from the focus group should give you several important pieces of data such as: to what degree are clients satisfied with your products and services; suggestions customers have made for products they would like to purchase; opinions about competitors and how you fare in comparison. This is valuable information, information that you receive directly from your own customers. The only way you can improve and be a more competitive small business is by understanding your customers.

Focus group results can help you shape business decisions. Maybe all the participants felt more staff was needed to be available on the sales floor. Perhaps you learned that consumers liked a particular product line and would buy more items if you carried more products within that line. This kind of information can help you make more informed decisions as an entrepreneur. Now a word of caution, the information you just gathered is valuable, but since it is qualitative (not a numerical, statistically valid survey) you can not project the group’s perceptions as representative of all your customers. What you can do is evaluate the results and see how the feedback makes sense within your business.

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