Market Data

Market Prosperity

Secret of Success

Questions to Ask

Understanding Your Market

Market Research Successful small business expansions and new job formation lead the way in creating new markets, innovations and jobs that fuel economic growth and prosperity. In recognition of the importance of small business to a strong economy, the U.S. Small Business Administration (SBA) is pleased to help meet the information needs of existing business owners and aspiring entrepreneurs. (41)______. Your business will not succeed just because you want it to succeed. Determining if there is a market for your products or services is the most critical item of planning. Once you decide on your product or service, you must analyze your market—a process involving interviewing competitors, suppliers and new customers. Before you begin researching your market, however, you should take a brief, but close, look at your product or service from an objective standpoint. You should ask yourself the following questions: —Is this product or service in constant demand? —How many competitors provide the same service or product? —Can I create a demand for my product or service? —Can I compete effectively in price, quality and delivery? —Can I price my product or service to assure a profit? Once you are satisfied that these preliminary questions are answered, move on to performing your research. (42)______. It is extremely beneficial to investigate a market because the information gathered can increase your profit potential. Specifically, it: —Indicates alternative sales approaches to your market. —Provides a more accurate base for making profit assumptions. —Aids in the organization of marketing activities. —Assists in the development of critical short/mid-term goals. —Helps establish your market's profit boundaries. Unfortunately, many entrepreneurs fail to complete this critical section of their business plan. Collecting research data can be frustrating unless you have defined your goals and organized the collection and analysis process. To prevent this from happening, you must plan how you will collect, sort and analyze the information. Maintain a notebook and file in which to store, organize and retrieve data as needed. (43)______. Your research should ask these questions.. —Who are your customers? —Where are they located? —What are their needs and resources? —Is your service or product essential in their operations pr activities? —Can the customer afford your service or product? —Where can you create a demand for your service or product? —What areas within your market are declining or growing? —What is the general economy of your service or product area? (44)______. Knowing your market requires an understanding not only of your product, but also of your customers' socioeconomic characteristics. This information will serve as a map in letting you know what is ahead. More market information can be found in, —Library listings of trade associations and journals. —Regional planning organizations' studies on growth trends. —Banks, realtors and insurance companies. —Competitors. —Customer surveys in your market area. Once you have obtained and analyzed this information, it will become the foundation of your business plan. Research information is important because it supports the basic assumptions in your financial projection—your reason for going into business. (45)