You have a good idea for a small business, but how do you know if there is a market for your product or service? Do research. In other words, data collection and analysis, profitability, placement and price of what you sell, demographics, competitor information, daily earnings expectations, and trends in your business. industry that can change everything, better or worse.
Some companies benefit more from a feasibility study than others, says Mark Eversfield, market research analyst for Small Business BC where he runs seminars and webinars on this topic. “It’s more important to do a market research for a restaurant than for a journalist working at home,” he says, referring to various levels of risk. Here are five strategies to consider before the official opening of your business.
Secondary school first
Mr. Eversfield explains that there are two types of market research: primary and secondary. He always starts with the secondary study because it allows him to learn more about the primary study. “The secondary market study, which includes reports and market research or statistics, tells you what’s happening with your target market, your competition and the trends in your industry,” he says. This information is collected by trade associations and your local Chamber of Commerce, as well as government agencies such as Statistics Canada , BC Stats , the Conference Board of Canada and the Canada Business Network .
Also, visit your public and academic libraries with a periodic index, a powerful search tool that allows you to search content rather than keyword searches.
The primary then
The primary market study is information coming directly from the source: your potential customers. Mr. Eversfield recommends starting on social media to gather informal feedback by sending messages to your friends and colleagues, then to polls and focus groups.
SurveyMonkey , a free cloud questionnaire tool, allows you to create a custom survey. Do not forget to ask short, direct and relevant questions. Focus groups are more complex because you have to gather a reasonable number of people. Submit a draw or discount on the merchandise if you decide to use this method.
Where are the buyers?
You can offer the best product or service in town, but what will you do if your potential customers are in the city next door? Market research will tell you. “Suppose you want to open a bike shop,” says Eversfield. Your research shows that the number of bike stores has been declining over the past five years or that they have moved to a key location [organizations such as the Canada Business Network keep a record of this data]. Look for something that you can exploit as a growth in the number of children or planning a cross-country race. So you will know that a children’s bicycle store would be more profitable than an adult bicycle store. ”
Know your competition
Business directories, industry knowledge and web searches ( Industry Canada is a good source) contain information about your competition. Or you can discover it for yourself. “Go to a competitor pretending to be a customer and learn more about the services offered, how customers and complaints are handled and how they use social media,” says Eversfield. Google Alerts can also help you track your competitors, trends, target markets, and more. ”
You have done due diligence in doing your research. What should you do now? “It’s all about feasibility,” says Mark Eversfield. Normally you will have a better sense of what you need to do. »Use your new knowledge to complete your business plan ( LivePlan is a good online resource), select your site, adjust your product as needed, order inventory, purchase equipment, hire employees and choose a publicity campaign.
“Market research is your plan,” says Eversfield. It’s about matching your ideas to the market, or modifying them to get there, and then finding the environment in which your ideas will be successful. Market research is an argument for starting a business. Sometimes you have an argument. Other times, you do not have one. ”
Take from time to do a market study allows to minimize the potential headache. This is a good reason to do it.