Skip to the main content.
Contact Us

15 min read

Best Tools For Market Research in 2023

Market Research Was Once Much More Difficult Than It Is Today

Market research has progressed significantly in the last few years. Information that was once difficult to obtain is now just a mouse click away. In fact, new tools emerge every year, reshaping how we find good data for business plans.

As information has become more widely available, lenders and investors are seeking more of it than ever before. Every good business — and business plan — is supported by extensive market research. 

What is Market Research?

I’m sure you’ve heard the term before, but before we get started, let’s define what “market research“ means in the context of a business plan. There are numerous definitions, but I believe this one from the Small Business Administration (SBA) is a good place to start.

“Market research blends consumer behavior and economic trends to confirm and improve your business idea.”

Because every industry and marketplace is constantly changing, it is critical for business planners and entrepreneurs to monitor consumer behavior trends. In this post, we’ll look at 11 different tools for conducting market research, their benefits and drawbacks, and how to use them in your business planning.

Why Market Research Is So Important

Market research assists businesses in developing in-demand consumer products and services, as well as defining the marketing strategy for reaching them. So much of our time in the fast-paced world of business is spent “putting out fires.” We are compelled to respond to the most pressing issue at any given time. However, having a long-term strategy backed up by real-world data is the lens through which we can make difficult decisions on a daily basis.

When done correctly, market research can serve as the GPS for your company’s growth journey. Market research for your business plan entails more than just determining product-market fit (which of course is critical). It is also used to validate the assumptions underlying the financial forecast.

For example, suppose your market research tools indicate that companies in your industry spend 50% of their revenue on direct costs. Does this imply that your company must also have a 50% cost of goods sold? Absolutely not, but if you deviate significantly from industry standards, your business plan must explain why (for example, your innovative product design uses fewer or less expensive raw materials).

Primary vs. Secondary Research

Market research is divided into two categories: primary and secondary research. In primary research, the data is collected and interpreted by the source. Surveys, focus groups, and interviews are examples of how businesses perform primary research. Secondary research, on the other hand, is the gathering and synthesis of data and information published by others. 

Because primary research comes directly from people who might buy the product, it is often the best way to determine product-market fit. However, primary research is typically costly and time-consuming.

In fact, most businesses should avoid conducting primary research until they have completed exploratory secondary research. Secondary research allows you to consider your assumptions before investing in more costly primary research.


Historic Data vs. Forecasted Data

When writing a business plan, you’ll need two types of data: historical data and predictions for the future. You can usually find free historical data sets on government websites if you look hard enough. Forecasted data, on the other hand, are expert predictions often based on those very data sets. Forecasts are created by economists and statisticians, and most of the time, you will have to pay for them.

What Makes Market Research “Good”?

First of all, market research is never based on a hunch. Sure, you’re a smart person with keen observation skills who has a grasp on what you see and experience everyday. You might know your industry inside and out, but to make solid market analysis, you need to rely on more than just your gut.

When putting together a business plan, you should only make assertions that are backed by facts. To make a compelling case — in a business plan, an academic paper or even a blog post — everything starts and ends with credibility. We live in a world where information is everywhere, and not all of it is accurate. 

In other sections of the business plan, such as your marketing plan or your company description, there is room for you to be subjective. But market research is different, and must be backed by cited, current and reputable sources. Try to find information from within the last year. If that’s not available, it’s okay to go back two years. But older than that and you risk appearing behind the times.

Overview of Market Research Tools

I have created my own unscientific scoring system based by ranking the following variables on a scale of 1-10:

  • Economic Trends: Big picture macroeconomic and societal trends
  • Industry Profiles: Detailed analysis of how a particular industry performs, both historical and forecasted
  • Financial Benchmark Data: Metrics for industry performance, include cost of goods, personnel, etc.
  • Localized Data: Population and demographic breakdowns for locally based businesses
  • Ease of Use: The data is easy to interpret and there are ready-to-use visualizations
  • Time-Saving: How much time it takes to find the information typically needed for a business plan
  • Affordability: You can spend nothing on your business plan market research, or you can spend thousands. As you’ll see in the scores below, there is a direct correlation between a tool being affordable and saving you time.

The rankings are completely my opinion and should be taken with a grain of salt. I believe that a good market researcher will use any tool they can find to make their case. But in working on business plans for nearly seven years, I’ve used quite a few of them, so I thought it would be helpful to others to score them based on their merits.

In addition, what one person thinks is affordable can be very different from what another person thinks.

I chose to judge based on price rather than a word like “value,” which is even more vague. IBISWorld is a good example of this. Some people might think $925 per report is a lot of money. But when it comes to value, I wouldn’t even think about starting a business (or writing a business plan) without first reading an IBISWorld industry report.

Masterplans Rankings of Top Market Research Tools (Paid & Free)


Free Market Research Tools

Internet

Masterplans Score: 40

Did you know that 15% of internet searches are completely new? There are trillions of searches each day, and many have never even happened before. This tells us that people are becoming more specific about their searches (instead of “business plan,” they are more apt to search, “what does market research involve in a business plan”). And the reason for that is because search engines are getting better at figuring out user intent.

So, as a business planner, use that to your advantage. Get really specific and see what you can find (here are some tips and tricks for internet searches). 

Let’s say you’re opening a casual counter-service restaurant. You “know” that people love those kinds of places, increasingly wanting tasty food but being willing to pay less for it by sacrificing table service. That’s a solid hunch, but you need a statistic to explain why that’s the case. So I searched, “how many people eat at fast food per week” and boom, the number one result was an article saying that 36.6% of adults consume fast food on a given day. 

When I’m performing these general internet searches, I always make sure and check two things before I even click on it: 

  1. Who published it, and
  2. When did they publish it

In the case of our fast food statistic above, the answers are the CDC (very credible), and October 2018. Now that’s where things get a little tough. Business is fast-moving, and when you consider the tumult of a global pandemic, hyperinflation, etc., data from two years ago is pretty outdated.

But search results are handy because they give you that information before you even click on it. So I can quickly scan the rest of the results on the page and see if there’s anything more recent, and lo and behold, I see that there’s another article from 2022 by BillPin. But upon opening that document, I find that they’re citing that same 2018 research by the CDC. 

When doing market research on the Internet, the best and most up-to-date information isn’t always free.

Here’s a #protip for performing market research on the internet: try using the “news” filter.

Not only are most news organizations credible sources to cite, they often will have articles that source information that is behind paywalls. You can even go a step further and filter by date published. I like to limit my searches to the last year, but if that gives me no results from credible sources, I’ll go as far back as two years.

how-to-filter-by-date

Internet forums like Quora and Reddit can be great places to learn about business in general, but it’s usually not a good idea to use a single person’s experience or point of view as research.

Pros of the Internet for Market Research:

  • Tons of information
  • Free (with internet access)
  • Available anytime and anywhere

Cons of the Internet for Market Research:

  • Assessing source credibility
  • Data timeliness
  • Time-consuming

Local Library

Masterplans Score: 39

If you’re doing your business plan on a budget, your local library can be a great resource. Not only will it have a selection of both general and industry-specific books, librarians are often happy to help you use databases and directories that the library might subscribe to, like Data Axle Reference Solutions (formerly ReferenceUSA). You don’t even have to visit the library to use Reference Solutions. If you have a valid library card, most libraries allow you to use their tools from the comfort of your own home.

Pros of the Library for Market Research:

  • Free (with library card)
  • Research assistance
  • Short-term book borrowing

Cons of the Library for Market Research:

  • Limited hours (if visiting)
  • Books frequently out-of-date
  • Time-consuming

Free Industry Reports

Masterplans Score: 43

Many industries have trade associations that collect business data that can be very useful when conducting research. As a means of promotion or lobbying, these organizations frequently conduct annual surveys and publish reports on the most recent trends in their specific fields, and make that information available for free (or as gated content). Examples of this include the State of the Restaurant Industry published by the National Restaurant Association. There are more trade associations out there than you could imagine: here’s a great categorized list by Marketing Mentor. These organizations can be great for networking and education long after you complete your business plan as well.

As you become more serious about planning your business, it’s a good idea to join an industry organization, especially if you’re starting a brick-and-mortar business, though it can sometimes be pricey to do so. The reason for this is that industry associations maintain industry-specific benchmarks that you will need to conduct research on your specific business location — data that you will never find through a Google search and that is not published on sources such as IBISWorld and ArcGIS Business Analyst.

For example, do you know what the core demographic characteristics of the average laundromat customer is? The Coin Laundry Association does. They can tell you the minimum population size within a certain distance, the percent of blue collar workers that population should have, and the percent of residents who should be in a specific income bracket. You then use that information to analyze each prospective location you visit, using a mapping platform like ArcGIS’s Business Analyst Online to determine if that location can truly support your laundromat and set it up for success.

Pros of Free Industry Reports for Market Research:

  • Niche data
  • Competitor analysis
  • Regularly updated

Cons of the Free Industry Reports for Market Research:

  • Limited free information
  • Can have industry bias

Government Agencies

Masterplans Score: 43

The federal government (and even some states) do regular reporting on industries. For example, the Bureau of Labor Statistics provides employer-related data by industry code, so you can fine-tune your personnel plan. But the best Government Agency for business information is the US Census Bureau, and specifically its Census Business Builder (CBB). Here’s the CBB report for Pet Stores in my hometown of Portland, Oregon:

census-business-builder-report

There are a lot of formats and filters to play with here, so I encourage all entrepreneurs to at least take a quick look at it. It is free, after all (your tax dollars at work!).

And be sure to take advantage of government agencies specifically relevant to your industry. If your business has anything to do with health care, the Centers for Disease Control and Prevention (CDC) has tons of data and insights on hundreds of health topics; likewise, if you’re in climate change or agriculture, check out the USDA’s Research Services.

In addition, many states compile data on industries and demographics so be sure to check those out as well. Try searching for your state name and “economic development” to find it.

Pros of Government Agencies for Market Research:

  • Free
  • Primary source for many other research tools
  • Updated regularly (some reports are even weekly)

Cons of Government Agencies for Market Research:

  • Can be time-consuming to find data
  • You’ll need to figure out what agency is responsible for the data you seek
  • Most data is national

Podcasts

Masterplans Score: 35

I bet you thought Podcasts were just for true crime stories. Well, I’m here to tell you that there is probably a podcast out there for whatever industry you’re hoping to enter. As with all podcasts, some are rudimentary, boring, and terribly produced, while others are engaging and filled with useful content. Some are updated with new episodes weekly while others have a total of six episodes made 10 years ago before the podcaster abandoned the project. 

Podcasts are a time-consuming and passive way to conduct market research, but that doesn’t mean they should be discounted. If you’re like most Americans, you probably spend an hour a day driving, walking or taking public transit. You can easily replace your current listening habits once a week to take in a podcast that might teach you something important about the industry you’re hoping to enter. 

The best podcasts will feature interviews with successful people in your industry, and sometimes those interviews will be so packed with gold nuggets of advice that you’ll need to pull over and take notes. There is no better way to prepare for starting a business than to learn from successful people who have gone before you, and if they are generous enough to share their wealth of knowledge on a podcast, you should soak it up. Podcasts can help you learn what matters to your customers, what mistakes others have made, what demographic traits to look for, and what pitfalls to avoid.

Pros of Podcasts for Market Research:

  • Time consuming
  • Great for passive listening 

Cons of Podcasts for Market Research:

  • Difficult to cite
  • Quality varies
  • Can be outdated (check publish dates!)

Vendors

Masterplans Score: 43

It is advantageous to establish relationships with vendors and suppliers even during the exploratory phase. Some people put off taking this action because they are not ready to buy and do not want to be subjected to a high-pressure sales pitch. This is a mistake! Your vendors are some of the most knowledgeable people in your industry, and they can provide entrepreneurs with a wealth of information.

An early homework assignment for any budding entrepreneur is to develop a relationship with three vendors or suppliers. Are you starting a coffee shop? Talk to three people who supply local shops with everything from cups to coffee machines. They can give you great info on industry benchmarks and sometimes even help you avoid putting your business too close to a business that is about to undergo a major upgrade. They can sometimes tell you who in your local area is interested in selling their business, or they can tell you to avoid purchasing a certain business because of structural faults that they know about. 

Sure, they want you to become their customer. But to earn it, they know they have to build trust, and they are often willing to give you information you need to become successful. After all, your success contributes to their success.

Pros of Vendors for Market Research:

  • Industry knowledge
  • Local knowledge
  • Good for networking

Cons of Vendors for Market Research:

  • Information is mostly anecdotal
  • May be difficult to find
  • Can have bias

Paid Research Tools


Statista

Masterplans Score: 51

I love Statista. Statista is the number one tool for general market information, with over one million statistics from 22,500 sources covering 170 different industries. In short, if there’s a business statistic out there, Statista has it. When Masterplans first subscribed to Statista as a market research tool about five years ago, I remember coworkers posting fun stats they found to the company message board. The novelty has worn off a bit by now, but clearly when we first got it, we all enjoyed playing with its depth of information.

Statista is a great place for finding information about a general trend over time. For our fast-food industry, we can see that the market is forecasted to hit $331.4 billion in 2022:

Statista statistic example: Market Size of Quick Service Restaurants

Now that’s a lot of Big Macs. Which, according to Statista, cost $6.71 in Switzerland, $5.15 in the U.S., and $4.26 in Kuwait. (See I told you Statista had just about everything!)

Statista has some information available for free, but their in-depth stats are available by subscription starting at $59 per month. You can also download one of their numerous reports for around $700. 

Statista has definitely become a go-to for our market research team, and I don’t remember the last Masterplans business plan that didn’t have at least one Statista chart (most have several!). It’s that good.

Lest I talk up Statista too much, I should be clear that it doesn’t have literally everything. As in our laundromat example from above, Statista will not tell you things like how many customers within a certain radius need to have income over $150,000 to make your jewelry store successful or how many children under the age of 15 need to be present to drive your trampoline gym’s success.

Pros of Statista for Market Research:

  • Quantity of data
  • Global & domestic information
  • Clear & clean graphic format

Cons of Statista for Market Research:

  • Limited data context
  • Generalized industry data

Risk-Management Association (RMA) Data

Masterplans Score: 32

Risk-Management Association (RMA) statement studies are the go-to benchmarking source for every lending institution. Their reports for over 580 different industries (categorized by NAICS code) contain five years of historical data, including financial ratios, sales, and asset sizes. Individual industry reports are $185, or you can get a one-year membership for all industries for $720. 

RMA Research Example

As you can see from the above screen shot, these reports are dense and difficult to parse. The key pieces of information to measure your financial performance are located under “income data.” These numbers should be similar to your financial forecast numbers (or you should provide an explanation).

Pros of RMA for Market Research:

  • Lender’s data source
  • Concentrates on small and medium-sized businesses
  • Relatively affordable

Cons of RMA for Market Research:

  • Difficult to understand
  • Only financial information

IBISWorld

Masterplans Score: 56

IBISWorld is the leading industry research resource out there. In fact, it uses the financial dataset from RMA, but provides reports with more context in the form of expert summaries, and offers it all in easy-to-understand formats. Recently, it has added state industry reports, and while all states aren’t available yet, that’s where they’re headed. There are thousands of industry benchmarks, and over 700 industry reports. I downloaded a free sample (sorry, even though I have access to the entire database, copyright laws don’t allow me to share them) to show you how awesome these reports are (download the free sample here). The current sample report is for pet stores, so if that’s your industry, you’re in luck.

IBISWorld Data Example: Historical Market Performance

Now this is data we can use! Wages per job? Revenue per location? Even number of pets (check out the pandemic bump in 2020)! 

We can plug this into Excel or Google Sheets (yes, data is downloadable with subscription). Moreover, we get insights into industry benchmarks such as wages, direct costs, marketing, rent, utilities, and competitors. 

And if that wasn’t enough, IBISWorld has ready-to-use charts and graphs as well:

Individual industry reports are $925. You can also get a three-month membership with unlimited access for $1,595. If you would like pricing on a longer subscription, you’ll need to talk to a representative.

We cannot overstate the importance of IBISWorld. Though it has some key weaknesses (certain business models are completely ignored, such as fashion design or QSR restaurants), we use IBISWorld in every business plan we develop. It is the standard for the Industry Analysis section of the business plan, which is required by any SBA lender. 

IBISWorld earned big props from us during the COVID-19 pandemic, when instead of taking the easy route and just leaving their data as is, they burned the candle at both ends and developed updates for all industry reports, to include a COVID-19 update. This meant that our clients could present their business plans to banks and investors without embarrassing themselves with old industry data.

Pros of IBISWorld for Market Research:

  • Uses RMA data
  • Includes industry analysis
  • Includes charts and graphs
  • New industry updates during major economic shifts

Cons of IBISWorld for Market Research:

  • Expensive if on a limited budget
  • Reports are updated yearly so your report could be later in life-cycle
  • Based on NAICS system, so business categories can be limited
  • Not useful for local data

ArcGIS Business Analyst Online

Masterplans Score: 40

Esri’s Business Analyst Online is a mapping and data product that is part of the widely used ArcGIS platform. Subscriptions, which start at $1,100 per year, give you access to location-based analysis that no other service can match. The ability to create datasets based on drive time or distance from a location is our favorite feature. This assists our clients in determining whether the site they’ve chosen for their business is suitable. 

Its mapping capabilities are unmatched, so if you have reason to believe that your customers will come only from the west side of a certain street in your city, you can use Business Analyst to draw a custom zone. If your franchisor has given you a list of zip codes for your territory, Business Analyst can work with that too. 

You can go broad as well, gathering info on residents and businesses in your whole metro area. You can combine different areas together or compare them side-by-side to help you choose the best prospective location. Business Analyst Online can tell you how much residents in a certain area spend on their pets, their medical expenses, alcohol, restaurants, clothes, or any number of things. It can tell you how many people in your area follow the English Premier League on TV or are soccer super fans, so you can open your soccer-themed sports bar with confidence. It can analyze traffic patterns in your area and even create infographics based on consumer spending information and heat maps showing information like household income. 

Its utility is matchless for local data, and it’s even a blast to just play around with (if you’re a super geek like me). 

If your company does not have a physical location, Business Analyst Online is likely unnecessary for your business plan; since it’s such a specialized tool, it scores lower on our scoring system then other services. However, if you intend to start a restaurant, coffee shop, retail space, or any other physical location, you’re definitely going to want to delve deep into ESRI’s Business Analyst Online’s wealth of local data.

Pros of Business Analyst Online for Market Research:

  • Unsurpassed for understanding local markets
  • Easily create “custom areas” for where you want to direct a marketing campaign

Cons of Business Analyst Online for Market Research:

  • Data is for physical locations only
  • Studies happen more frequently in urban areas, so rural locations can have older and less specific data sets

Paid Industry Reports

Masterplans Score: 45

In addition to the free industry reports listed above, some industries have more extensive paid industry reports. These are especially relevant for specialized and localized information. One example we use is STR hotel industry reports that tell us the permanence of hotels within a specific geographic area. Another report we buy every year is Marijuana Business Daily’s Factbook, which provides segmented data, state-specific policy information, and overall industry trends in the legal cannabis marketplace. Pricing for reports like these varies (for example, the MJBiz Factbook is $300, while the STR reports are $600 each). Others can be quite costly. The Beverage Information Group’s Liquor Handbook costs $3,200, but if you’re starting a liquor company, it’s probably a resource you’ll want to have on hand. 

Pros of Paid Industry Reports for Market Research:

  • Great for specialized and local information
  • Detailed benchmarks
  • Great for competitors analysis

Cons of Paid Industry Reports for Market Research:

  • Usually expensive
  • There are so many, it can be hard to decide which are best

What Tools Are Right For Me?

For someone doing a business plan on their own, it is possible to find solid, fundable data only using free resources. However, that information will take time to uncover, so you should factor that into your decision-making.

When deciding what tools are best for your business plan, a few tips:

  • No single tool will be perfect
  • Look for tools that complement each other
  • Your budget for tools should reflect where you are in the process; always start with the free tools!
  • Sometimes the data you want doesn’t exist (so be adaptable)
  • If the data doesn’t support your hunch, figure out why, and adjust your plan accordingly

For our clients, time is money, so we provide our team with the best research tools available. 

Masterplans subscribes to IBISWorld, Statista, and ArcGIS Business Analyst, and incorporates all three reports into the majority of the business plans we write. 

We also conduct internet searches to supplement this information and other subscriptions, such as the Wall Street Journal, that we frequently cite for contemporary details, with other publicly available free data to provide context for our clients. As previously stated, we purchase a limited number of individual reports, and we are always happy to include data from any report purchased by our clients in their business plans.

In other words, the best business plan market research results from utilizing multiple research tools and capitalizing on each one’s distinct strengths to create a clear picture of a company’s industry, target market, and revenue potential.
Business Plan 101: All Your Questions Answered

5 min read

Writing a Solid Business Plan: Fundamentals and Principles

I’ve worked as a business plan writer since 2006, and it’s been a remarkably fun and fulfilling career for me. I get to see entrepreneurs of all...

Read More
Silver Lining: The Good News About a Bad Economy

5 min read

From Layoffs to Innovation: How Economic Downturns Spark New Business

It’s hard to go a day without hearing a report of another major corporation laying off workers. Layoffs are painful for everyone involved, especially...

Read More
How to Make Your Side Hustle Your Main Hustle

4 min read

Making the Leap from Side Hustle to Full-Time Entrepreneur

2022 was the year of the side hustle. Recent data from Zippia show that 45% of working Americans have a side job, and that percentage rises to 70%...

Read More