01/01/2014 08:23 pm ET Updated Mar 03, 2014

Market Research on a Budget

Thinking about starting a company? Got some downtime during the holidays to brainstorm your next career move? Before you take the entrepreneurial plunge, you should take some time to see if your idea is really ready to fly.

Before we launched Rivet & Sway, we spent most of our spare time researching the eyewear market and trying to identify specific problems that woman have with the eyewear shopping experience. None of this research cost much money. It just took some time, some persistence and the willingness to ask people to do something for you.

I've highlighted five of the tactics that we used to gather market research for Rivet & Sway below:

Industry Reports: Here's the deal. Most industry reports cost a ton of money and spending up to $5K on a report is daunting. That being said, if an industry report comes from a reputable outlet, it's definitely worth the money and effort. We spent a couple of weeks individually combing through hundreds of pages of data to learn more about the eyewear industry, its dynamics and where potential opportunities existed. Fortunately, we had the means to actually pay for one of these reports and saved ourselves a bit of time. But if you don't have the cash, have no fears. There are MYRIAD ways to get your hands on these reports without spending a dime. Think about utilizing your personal network, your connections with any universities, students or professors, and your ability to simply send an email to the author of the report. You'd be surprised how effective just making an effort can be in obtaining key industry data.

Personal Interviews: Once we had a gut feel that women might be a good segment for Rivet & Sway, we started talking to opticians, optometrists and eyewear boutique owners about the overall shopping experience. Of course, we tried to make it not too obvious that we were thinking about starting a competing company, but in some cases, our questions were met with suspicion and trepidation. We didn't care much though. At the time, we had nothing to lose and were really just trying to see if any opportunities existed. It's always good to talk to people on the front lines. In some cases, this takes perseverance, persistence and having a bit of a thick-skin. But you have to be willing to put yourself in some uncomfortable positions...that's what being an entrepreneur is all about.

Surveys & Polls: One of the many benefits of being an 'older' entrepreneur is that your personal and business networks have expanded dramatically since you were, say, 22. And we took full advantage of reaching out to our personal networks, our spouse's personal networks, our business networks, etc. I took a very similar approach when we were researching MouseDriver... created short electronic surveys and polls (primarily via surveymonkey) that wouldn't take folks longer than 60 seconds to complete. And of course, we only targeted women. By the time we started sending out email surveys, we knew that we were trying to obtain as much information from women as possible. Consequently, it made structuring our questions very easy. The polls were especially helpful when we were trying to find a name for our company.

Focus Groups: I'm not a big fan of focus groups. In my experience, the insights you get from a focus group are typically inaccurate, and ofttimes, completely off base. Maybe it's due to group-think, bad moderation, wrong participants, but I've never been a fan. So why did we do them for Rivet & Sway? Because we could essentially bootstrap the focus groups and we had a great moderator who had deep experience recruiting and conducting focus groups. Utilizing Craigslist as our recruitment platform, my condo's business center as our conference room, and potential competitors' already existing websites, we were able to garner some very insightful information on the issues that time-strapped women have with the prescription eyewear shopping experience. Did these things take time? Yes. Were they fun? No (although the dynamics between participants can be fascinating). Was this particular series of focus groups effective? Absolutely. Am I still a big fan? Nope.

Competitive Analysis: I love researching competitors for two reasons: you get information on the actual competitor and you get information on the industry. By researching a competitor's site, by searching for any blog or press mentions and by reviewing customer comments via social media, you can get a pretty good idea of how a competitor is positioning itself. Additionally, you can get a ton of industry and market information from your competitors, especially if their seeing a bunch of media momentum. Most entrepreneurs, CEOs, founders, etc. love media attention and don't realize that the more they disclose to the media, the more information they're making publicly available to others. By just connecting the dots, we were able to parse together some great insights by simply doing News, Blog and social media searches on our competitors. Plus, if you're going to move forward with your idea in any sort of fashion, you're going to need to know how to position your company against existing, and new, competitors.

Market Research doesn't have to cost a ton of money. In the end, we spent roughly $5K on market research. $3K of that amount was spent buying an industry report, which I know we could have obtained for free had we put in the effort. Is $5K (or even $2K) a decent amount of money? Yes, it is. But it's worth the investment if you're potentially going to spend your life savings, or somebody else's, bringing an idea to market. Plus, that small investment could also save you from bringing an idea to market that doesn't stand a chance.

Questions, comments, concerns? Feel free to comment below and please feel free to share this post with others.

This post originally appeared on John Lusk's Blog.