By Fernando Berrocal

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You must cover a variety of issues in order to complete an exhaustive startup market study. It is essential to perform this kind of study as part of your business plan.  It guarantees that you are fully informed about the market. It also aids in determining what adjustments must be done for things to function properly. It reassures any potential or existing investors regarding whether or not you can demonstrate a reliable strategy–and a well-evaluated one.  A market study can provide sources of funding that they are making the right choice–with the right entrepreneur.

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You can't even begin to imagine how many errors can arise from failing to conduct a thorough market analysis.  In order to accomplish this job thoroughly, you must factor in a wide range of elements into consideration.  Before getting into specifics–such as the type of products your firm sells, and the price–you must endeavor to learn more about your customer demographics. You'll learn where they spend their money, how much they'd be prepared to pay for a similar product to yours, and how to properly spy on your rivals. Read on for the key points you need to address in your market study.

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• Target market: This is where you’ll decide who your product is for.  Thus, it will be the most particular of all requirements. Location, age group, and hobbies may also be included. Tell them what size and kind of business you're searching for. Make your user persona as distinct and unique as you can while constructing it.  What are the core elements of their identity? What is their age? What do they enjoy doing? Do they have kids? What about pets? The development of demographics will aid the business in comprehending its target market.

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• Market segmentation and demographics: It's crucial to delve into these two areas  if your business is aiming to target more than one market group. Although your focus may start with demographics, it may later expand to other potential markets. People can be divided in several different ways–more than you can believe! You may segment customers based on their geography or on their main activity, which increases the likelihood that they will purchase your products and/or services.

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• Business sector description and outlook: You should start by examining the market's potential size–and commercial trends in your market. Do that while also thinking about the industry in which your business works. Before delving into a more in-depth study, it is essential to have a general understanding of what other businesses in your sector are currently doing.

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• Market testing (and results): Why do your potential customers need what you're offering?  How can you substantiate that their present actions indicate a future likelihood that they'll buy your product? Many founders dedicate a large portion of their time to analyzing their rivals–to see how they might outperform them. Additionally, you'll be able to identify market gaps that your organization's items may address. Include market testing results in the results section if you or someone else has done so. Remember to address the following questions: What did your research end up finding? How did you arrive at those judgments? Do any specialists concur with the results of testing and data analysis from previous experiment research studies?

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• Total Addressable Market (TAM): The total addressable market–also known as TAM–contains the potential for your business expansion. Investors want to know that you are providing chances while also addressing a difficult problem. Investors invest in businesses that have the potential for enormous development as they are constantly considering this possibility. A company can't make up for poor investments if it does not seize enough business opportunities. “How many individuals might utilize this product” is the question to ask in this scenario.  Note: the most important–and frequently, the least accurate–question to answer is this one.

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• Business obstacles to overcome: Look at the obstacles portion of your marketing study to see what keeps a rival from setting up and stealing your market portion. You'll discover why no one can perform it as well as you do there. You must promote yourself as a business partner, in addition to having the appropriate remuneration package to offer. You must take your opponents' obstacles into account if you want to compete successfully in this sector. These include elements like the business technology needed, and any regulations that may be in place.

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Resources That Will Make Conducting a Market Analysis Easier

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There are several (well-liked) internet resources right now that can support your startup market analysis.  Nevertheless, keep in mind that these business instruments alone won't be sufficient. You'll also need to put in a lot of independent analytical work, such as conducting interviews, surveying customers in stores, and other straightforward marketing tasks.

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• Startups that perform market analyses: If you are a startup entrepreneur, a viable option is employing others to do tasks for which you lack the necessary time or business expertise. Although hiring an outside consultant might be kind of pricey, they could provide special insight into the demands of your clients. A startup market study may be too much for you to handle alone, so look for a business that can–and will–handle it appropriately to have the ultimate success.

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• Startup surveys:  Are you interested in finding out more about your particular business market? Try just asking the prospective clients in a survey. Nowadays, creating and running startup surveys is a great method to get data you never would have imagined. The data gathered is much simpler to gather and turn into useful information with the help of technology. You have three options: do it yourself, collaborate with someone else who is skilled at creating survey questions, or simply hire someone to spearhead this initiative.

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Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.