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Published March 05, 2020
A weekly look at issues facing Wyoming business owners and entrepreneurs from the Wyoming Small Business Development Center (SBDC) Network, a collection of business assistance programs at the University of Wyoming.
By Kelly Haigler Cornish, Wyoming SBIR/STTR Initiative program manager
Identifying your customers goes a long way in increasing a small business’s sales, but it also can play a major role in receiving funding from some sources. For small businesses pursuing Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funding, knowing your potential customers validates the market potential -- which federal agencies see as de-risking their investment in your idea. Those agencies don't want to fund an SBIR or STTR project that won't make it to commercialization.
One way to show the market pull or potential commercialization is to conduct market research and customer discovery. Advisers and innovation funding experts at the Wyoming SBDC Network can help you access secondary market research data from licensed, proprietary databases such as Frost & Sullivan.
This information will help you get an overall picture of your potential market. Additionally, your local adviser can work with you to craft customer discovery questions that you will use when you get out of your lab or office and talk to potential users, customers and partners. These conversations will help you determine if you have identified the solution to a real problem or if you are creating a product for a problem that users don't think exists.
Market research and customer discovery are important for any new business venture. This includes high-tech companies. In the SBIR and STTR world, federal agencies are looking to see if your small business understands the customers’ needs and if you are proposing solutions that really address the customers’ pain points.
If you think of the SBIR and STTR awards as investments in a small business by the federal government, then you can better appreciate the agency’s viewpoint. The reviewers assess the potential for the small business to succeed from the research and development phase (funded by SBIR and STTR funds) all the way to the market launch of a commercially viable product.
There are two types of market research you can conduct. Secondary market research is data that is collected and compiled by other entities. Some sources include government agencies, media sources and trade associations. Some of these sources are free while others are offered for a fee.
Examples of places to get free access to secondary market data are the U.S. Census Bureau, your local college or university library, and the Wyoming SBDC Network’s Market Research Center.
Secondary market research is easier and less costly to obtain, and can provide a broad understanding of your market. However, it may not specifically address what you need to know.
The other type of market research is primary. That means you, as the researcher, collect the information directly from potential customers and users. With primary research, the information you collect is based on the needs of your organization. Furthermore, you get to design the questions and target the market segment for your unique product. You also own the data you collect.
To learn more about conducting research and customer discovery, consider registering for our March 12 webinar with Peter Scott, UW’s Entrepreneur in Residence for the College of Engineering and Applied Science. This webinar, titled “Market Research & Customer Discovery,” will supply you with the information and tools you need to start on the road to customer discovery. You also can learn more by signing up to meet with your local Wyoming SBDC Network adviser by visiting www.wyomingsbdc.org/sign-up.
The Wyoming SBDC Network offers no-cost advising and technical assistance to help Wyoming entrepreneurs think about, launch, grow, reinvent or exit their business. In 2019 alone, the Wyoming SBDC Network helped Wyoming entrepreneurs start 108 new businesses; create or save 3,402 jobs; and bring a capital impact of more than $24 million to the state. The Wyoming SBDC Network is hosted by UW with state funds from the Wyoming Business Council and funded, in part, through a cooperative agreement with the U.S. Small Business Administration.
To ask a question, call 1-800-348-5194, email firstname.lastname@example.org, or write 1000 E. University Ave., Dept. 3922, Laramie, WY 82071-3922.