Market research is important because it will help you figure out whether or not there is demand for the service you’re offering or the product you’re selling.

It will also help you when it comes time to write your business plan, especially if you’re pitching an angel investor or a venture capital firm. They will want to see there’s a market for your idea, otherwise, it won’t scale as rapidly as they need it to in order to make a return on their investment.

There are a number of fantastic resources you can use to research your industry, including research you manually undertake yourself like sending out surveys, speaking with people on the phone, sending emails, and generally getting in touch with others who are or have been in similar situations to you. View 7 Steps to Small Business Success by John Jantsch... great start up guide! 

There are a number of ways you can go about gathering this information:

• Perform web searches—see who is operating in your location, search for statistics on your industry, find out who is selling something similar to you, what they’re doing, and how they’re doing it. Are they doing well? Could you do the same thing and succeed or could you do better by doing something else?
• Go shopping—do both online and offline shopping or “research.” See what people are paying and how they’re rating products and services.
• Talk to people—including customers.
• Gather information—from government sites like the U.S. Census Bureau or the national Small Business Development Center (SBDC) network, your local chamber of commerce, and relevant industry publications
• Gather your own research—by undertaking telephone and email interviews, running focus groups, and asking people to fill out surveys.