What you need to know about your product, your customers, the industry and your competitors.
Market research is an organized effort to gather information about product markets and/or customers.
Know your customer - Research the demographics, economics, and social patterns of your customers to inform your business on issues ranging from marketing to pricing. Understanding your customer will drive decisions and choices on product or service features, packaging, and selling methods. You may identify customer segments (groupings of customers) to which different product variations may appeal, or different selling strategies may be effective.
You should make an effort to estimate how big the market for your product is: how many units will be consumed and how many dollars spent in total for a given time (say, for 1 year, 2 years, 5 years). Determine what value proposition you will be offering to potential customers: what does the customer expect and at what price.
Know your industry - It will be helpful, if not important, to understand how the industry you will work in operates. You should be aware of the practices and standards typical in your business area, know what typical financial performances for companies in the industry are, and how the industry interacts. Know how products are typically introduced and sold to customers, and how the supply chains serving the industry typically work.
Know your competitors - You absolutely need to know your competitors. In a dynamic marketplace, competitors will react to new entries like you, and you need to know what they might do and how to successfully carve out your niche. Be aware that competitors may not be obvious and direct. For example, TV networks have made great effort at beating each other, but were blind sided when the internet became their biggest competitor.
Hoover’s - Hoover’s Online allows you to research your competitors. Detailed information on specific industries. Fee or subscription.
US Bureau of Census (census.gov/econ) - Every 5 years a census of the economy is conducted. The data is released periodically. Find information on size of industry, size of individual businesses, payroll, revenues, and more. Geographic information is also catalogued. Free.
Industry Associations - Most industries have membership associations. Industry associations are often the best sources for detailed information on that industry. Associations vary greatly: some have detailed information and some don’t, while some make information available at no charge, while others will charge or require membership.