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Conducting Market Research? Here are Several Official Sources of Free Data That Can Help

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Are you writing a business plan? Planning to expand into new markets?

Then it’s worth knowing that Uncle Sam offers access to free data that can help you understand your market and analyze consumer trends and demographics.  In fact, the federal government is the largest producer of data in the U.S. with numerous offices dedicated to collecting, analyzing and providing free access to their findings – good news for budget-conscious small business owners, but where do go to find that data, and how do you use it once you’ve got your hands on it?

First, conducting market research doesn’t always have to involve hiring a research firm or commissioning focus groups; much of the information you need may be at your fingertips.

This research can impact and inform all areas of your business, from where you locate your business to the color of your logo. Even a small amount of analysis can help you gauge the receptivity of your target market to your idea. 

But how will you use this data effectively? Here are some tips for finding data you need and translating it into information you can use in a business plan or simply to inform your strategy:

So Where do you look?

  • Free Government Market Data – One of the best sources of data is the U.S. Census Bureau. The information there is vast, and among the easiest to navigate. Thanks to a variety of Data Access Tools such as the 2010 Census Interactive Population Map, you can pinpoint census data to the block level and compare one community to another. Census data can help you answer many questions that come up during the business planning process, such as:

o   How do we know the size of industries and businesses?

o   How can we determine the economic activity of communities large and small?

o   Where should I place a new business?

o   What products in my industry are growing?

o   What materials are purchased by my industry?

o   What industries purchase my products?

  • Competitive Data - Want to know how your business stacks up against the competition? Where your potential competitors located? The best places to advertise? These are all critical inputs for your business plan and can also support your financing applications. SBA’s new SizeUp tool lets you crunch millions of data points to get customizable reports and statistics about your business and its competition. Enter your industry, city, state and other details. The tool then runs various reports and provides maps and data related to your competition, suppliers and customers. It also highlights potential advertising opportunities.
  • Use Your Own Data – Don’t just rely on external data sources. As your business grows, use your own data to analyze consumer profiles, buying behaviors and so on.

Some Sources of Data:

1. Business Data and Statistics from SBA.gov

A good place to start is SBA.gov’s Business Data and Statistics page, where you’ll find a collection of resources providing free access to information about business and economic conditions and indicators collected by the U.S. government. Whether you sell to businesses or consumers, these sites include data and statistics on income, employment, trade, and manufacturing, and plenty more.

2. The U.S. Census Bureau

The U.S. Census Bureau (www.census.gov) maintains a vast repository of information that is quick and easy to navigate, thanks to a variety of Data Access Tools. For example, with The American FactFinder, just enter a city and state and the tool will generate multiple options for viewing social, economic, household and demographic data for your town or future location.

The main site has also been newly re-launched to make it very simple to find the data you need, including a neat interactive map that shows a mash-up of economic and demographic statistics for any town, city, or state in America.

If you like what you see but are not sure how to use and interpret the data, the Census Bureau hosts seminars across the country to help business owners learn more about business and industry data on the site. Learn more.

3. FedStats.gov

If you want data but don’t know which agency maintains or produces it, head on over to FedStats.gov. This no-frills data-driven site provides access to a full range of official statistical information produced by the federal government without having to know in advance which federal agency produces which particular statistic. Data is available on wide-ranging topics, including economic and population trends, crime, education, health care, aviation safety, energy use, and farm production.

4. Small Business Statistics

Interested in statistics about how small business is doing? The SBA Office of Advocacy conducts and publishes its own research on topics such as the small business economy.

5. EconomicIndicators.gov

For briefings on retail sales, durable goods, manufacturing, construction, new home sales, and more, Economicindicators.gov provides access to daily releases of key economic indicators from the Bureau of Economic Analysis and the Census Bureau. This is probably your best bet if you're looking for one site that says it all.

How to Use the Data

Here are some ways you can use the data you uncover in your market research to build your business plan or inform your strategy:

  • Get to know your target market – If you are seeking investors, they will want to know that your market is sizable and that you have researched and understand its opportunities and its limitations. Is your market definable? Is it sufficiently large that you can reach it efficiently (for example, are population or demographic shifts likely to play to your advantage)? Where do your competitors fit in? Can you segment that market further? Above all, is there a niche you can carve for yourself?

As you prepare your business plan, think about providing: 1) A description of your target market, 2) the trends that impact that market and 3) strategic opportunities for your business in this market.

  • What is going on in your industry? – Few businesses are immune to industry trends. If consumer spending is down or unemployment is on the rise, this may affect your plans and your budget. Use economic indicator data to assess trends and market forces that can help you succeed. If your industry is in flux, could you use this fact to your advantage and position your business for future growth? Investors will want to see that you understand the factors that affect your business’ success. Be sure to include in your plan: 1) a description of your industry, 2) industry trends and 3) strategic opportunities in your industry.
  • Analyzing the competition – SBA’s SizeUp Tool can help you zoom in on exactly who your competitors are – use this information wisely.  Include a description of your competition in your business plan. What market share do they command? Who are their customers? What barriers to entry do they represent for your business? What opportunities are there? The SizeUp tool is very visual; consider using screen caps or charts to back up your data. Knowing your competition will help you better position yourself against them and reach your target market more effectively.

Bonus Tip: use SBA’s Build a Business Plan tool to help guide you through the process of creating a basic, downloadable business plan

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Growth in women's share of science, technology, engineering and mathematics (STEM) occupations declined to 27% in 2011from a high of 34% in 1990. While women make up nearly half of the workforce, they were 26% of the STEM workforce in 2011.

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