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Steve Windhaus Ask the Small Biz Adviser

Small Biz Adviser: Basics of conducting your own market survey

Dear Small Biz Adviser
I am considering starting a specialty muffin shop. What kinds of questions should I put into a survey questionnaire to find out if this business venture is feasible?
D.H.

Dear D.H:
It's exciting to read that you are going out to generate your own market research data. The overwhelming majority of business and marketing plans rely on secondary data (data from other sources) to develop startup and promotional strategies. You should be congratulated because so few startups develop their own primary data, developed directly through your own survey.

Having congratulated you, now I have to warn you: Getting valid survey data isn't easy. How you conduct the survey, how you ask the questions, who you ask and other details of the process all affect the data's validity -- and your chances for success.

Be certain to structure the survey for ease of use. If you are simply going to ask questions directly to individuals, structure survey content to facilitate the ease of compiling your data. If you intend to give the individual a survey to be completed, the survey must be designed to be easy to understand.

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  • Survey questions, whether asked or submitted to the individual in document form, must be posed objectively. For example, pose a question such as: Do you like muffins? Do not pose a question such as: Do you like muffins if they are prepared the way you like them? The first example seeks a definite response to an objective question. The second example is a leading question -- it solicits a positive response by adding the "if they are prepared the way you like them" clause.
  • Ask easy-to-understand questions. Don't use fancy words.
  • Allow responses consistent with the nature of the question. For example, if a question calls for a "yes" or "no" answer, then word it that way and use the two options -- yes or no -- in the response area of the survey for that question, not yes, no and maybe.
  • Questions that require a specific response in the form of multiple choices or "yes" and "no," as in the example above, are called closed-ended questions. They allow you to easily compile results. Questions that request the respondent to write answers in the form of sentences, conveying what they feel, are called open-ended questions. Asking an open-ended question requires thought. Don't always expect clear, relevant responses if they have to write down that kind of answer while standing on a crowded street corner. That is best left for a controlled, quiet environment.

Open-ended questions have responses as varied as the respondents, and are not easy to categorize by groups of respondents.

What should you ask about? Consider these topics:

  • Types of muffins. Which are more and less popular?
  • People who buy the muffins. Where do they live? What are their professions, family status, marital status, children in the family, household income and eating habits? On what occasions do they buy muffins?
  • Where people buy the muffins. Do they prefer to buy frozen muffins at the grocery store or in a bakery? Do they prefer to buy ready-made muffins or the type you have to bake in the oven?
  • Pricing. What prices are they willing to pay for the muffins?
  • Promotion. How are they made aware of the availability of muffins? Do they read about them in newspaper ads, flyers on the street, friends referring them to a local bakery or becoming aware of the bakery because it is on their way to work or home?
  • Competition. Where do they presently buy muffins? Is there anything they would do to improve the muffins presently bought or available?

The types of questions to ask vary from one set of conditions to the next. And you have to be very careful when posing questions related to the backgrounds of the people buying the muffins. Anonymity will guarantee greater and more reliable responses.

Finally, there is the matter of where you seek the responses and how many responses you get. Surveying people where your muffins are not likely to be accessible is certainly a waste of time. Secondly, getting responses from 200 people is likely to give you a greater accuracy than data from 20 people.

I have only touched the surface addressing the issues of survey intent, content and analysis. So here are a couple of online sites that will help to broaden your understanding of matters to consider when seeking objective results:

  • SurveyWeb.com is apparently a fee-based service, but I found a page on the site that explains the contents of a downloadable software application for composing your own survey. Click on any of the titles, and you get a very precise, accurate description of that element in survey development.
  • The American Statistical Association provides a wonderful online brochure, How To Collect Survey Data, that more fully describes basic surveying principles only addressed briefly in my response.

There are many other links, but these should give you a good start to developing and conducting your survey.

I wish you well.

-- Updated: Feb. 2, 2005

Bankrate.com writers base their answers on our editorial content and advice of financial professionals. We make no claims or representations about the accuracy, timeliness or completeness of such content, advice or the answers provided to you. Our content, advice and answers are intended only to assist you with your financial decisions. However, by its nature such information is broad in scope. Your financial situation is unique, and our content, advice and answers may not be appropriate for your situation. Accordingly, we recommend that you get different opinions and seek the advice of your accountant and other financial advisers before making any final decisions or implementing any financial or investment strategy.

 

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