Types of Research
There are two main types of research in business: primary and secondary. Primary research is research that you conduct yourself. It's original research where you design the research study, collect the data, analyze it, and draw conclusions.
Secondary research is collecting information that already exists. These types of data include demographic information like how many people live in a certain zip code, the average household income in your area, and how many new businesses have been launched in the last year. Some secondary data is free, while you may have to pay a fee to access other data. With the Internet, a tremendous amount of data is instantly available to you. You can research your local chamber of commerce, local publications, and many official records online.
There are advantages and disadvantages to both primary and secondary research. Doing the research yourself allows you to tailor the process to your specific needs. However, you may be able to draw the same conclusions and save yourself time and money by analyzing data that's been compiled by someone else. Using secondary data may be more convenient but may not answer all of your questions. In the end, you may get the best results with a combination of primary and secondary research.
There's a whole industry that compiles and sells data. Before paying for data, always ask yourself if there's a way to get comparable data for free. Find out how current the data is and consider what you expect to learn from it and how it might impact your business plan.
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If you're unfamiliar with conducting primary research or using secondary research data properly, you can take a class to make yourself more comfortable. Local community colleges offer classes in market research and basic marketing. At the very least, you can buy a book on market research techniques. Appendix A has some helpful suggestions.