How to Research Your Market

Do your homework before opening your doors to avoid business-busting mistakes.

1. Is the market saturated? Does your city really need another hardware store or flower shop? How much money is spent in your industry each year in your area? Is there room in the market for one more business?


2. Does the market want what you’re offering? If you’re thinking of providing day care for dogs or a facility where people can cook a week’s worth of meals in a group setting, will anyone care? Or if you’re developing a new online service for day traders, is it something they can’t live without?


3. What’s the competition doing? What do they do well? What do they do poorly? What’s unique about them? Can you offer something different that'll encourage customers to patronize you instead of more established businesses?


4. Can you reach your target audience? If you’re selling inline skates, are you opening in an area with a population of the right age and disposable income?


5. Local universities. Sometimes professors at business schools are interested in having their graduate students do a market feasibility study for course credit.


6. Potential customers. Run your idea up the flagpole with informal focus groups. Talk with friends of friends--but not your own friends or family, since they may not tell you the truth--and old customers or existing customers if you’re already in business. This is the acid test to see if your plan is ready for prime time or needs tweaking.

good luck!

~entrepreneur resource