MGT 200 - Small Business Management: Getting Started: Market Validation

Primary research: research that you conduct yourself. It involves going out and talking to people, asking questions, gathering information or data, and analyzing it. For entrepreneurs, primary research usually involves things like surveys, interviews, or focus groups with potential customers.

Secondary research: research that has already been done by someone else. The information has been gathered, analyzed, packaged up into a report or some other format, and published in a way that makes it accessible to others. For entrepreneurs, secondary research usually involves identifying industry and market analysis reports from library databases, trade associations, government entities, or doing Google searches for this information.

Quantitative data: can be counted, measured, or numbered. Useful for statistical analysis and answering questions involving how much, how many, or how often.

Qualitative data: descriptive data about qualities, characteristics, behaviors, or attitudes. Can be subjective and answers questions about how or why.

Closed-ended question: participant is given a set of possible answers to choose from (e.g., yes/no, multiple choice, Likert scale, ranking, etc.) Example: Do you own an iPhone? Options: Yes or No

Open-ended question: participant is given the opportunity to respond freely to the question. Example: What do you look for in a smartphone?

MARKET VALIDATION is the process of determining whether or not an opportunity exists in the market for your product of service. This usually involves talking to potential customers to determine whether there is a need or want for your product or service. 

This is called PRIMARY RESEARCH and there are important considerations to ensure this research is conducted effectively and ethically.

Entrepreneurship research requires both PRIMARY and SECONDARY RESEARCH. Start with secondary research - see what information is already available - then, use primary research to fill in the gaps and answer the questions you still have.

For PRIMARY RESEARCH: Find people in your target industry to talk to them or to have them take your survey. To find people in your industry the best place to look is through industry trade association. Every industry has a trade association. 

1. Use Google First: To find your industry's trade association just use a simple Google search: [YOUR INDUSTRY] AND "trade association"
   (Example: "food trucks" AND "trade association")
    
2. Find a List of Trade Associations 
   Wikipedia: List of industry trade groups in the United States
   Planning Shop: List of Major Trade Associations
   Rutgers University Trade Associations
    
3. Using Trade Association Lists for Outreach: Once you find your industry trade association, see if they publish any lists of members, or if they have a local chapter located near you. You can then contact that local chapter to ask to contact members near you. 
    
4. LinkedIn: You may also use your contacts from LinkedIn to see if you have any connections to people working in your target industry. 

For SECONDARY RESEARCH, try the following links and Library Databases:

• U.S. Industries at a Glance from the U.S. Department of Labor Statistics