Essentials of Market Research for your business plan. No 6
December 18, 2020 Published by Thomas Cullen
How to research your competitors and their customers with market analysis.
In this section, you described your potential customers. Most of these customers will already be using other businesses.
Who are your customers?
Lots of businesses look good on paper but the only test that matters is whether the product/service sells. You can’t be sure that your assumptions about your business are right unless you do some proper research (i.e. don’t just ask your friends and family if they think it’s a good idea test with minimum viable product in a micro market place such as a Farmers Market, Street Stall, etc.).
Thomas Cullen Founder and CEO of www.Sherpha.com Ireland and U.K.
There is no right amount of research. It is better to research your local market first, in the area you are going to run your business than it is to research the entire global market. The right amount of research will tell you what your market looks like, how it behaves, and what customers expect.
How to complete this section
There are two types of basic market research: >
> Desk research where you seek information by reading or searching online
> Field research this is where you go to the marketplace to test
Write up your findings including the most important information only. Your Appendix should be used as a reference point for data gathered.
You can also obtain information on the internet. There is a vast array of websites available, giving information on every topic under the sun.
This is a very big topic, but we will not go into too much detail.
The truth is, you can do as much market research as you want, but it will not guarantee success in business. However, it is highly recommended to do some research before you do anything else, and the more complex your business, the more market research you must do.
Questions to ask when doing your research and answer objectively and concisely. This is not an exhaustive list but will be of assistance to you.
- Who will use my product or service?
- How many similar businesses are there in the area?
- Can I improve a product or service that other businesses are offering?
- Do I need planning permission?
- Why would customers come to me – is it because of better quality,
- Cheaper price or better service?
- Can customers obtain my product or service from competitors locally?
- Would large companies use my product or service? – ask them
You can get answers to some of your questions by finding out how established businesses are doing. A quick way to find out how many businesses are in your area is to look up local business directories’ most of whom are now online. But don’t forget, not all businesses may be listed. When you are satisfied that there is a need for your business and that you can offer something better than the competition, you may decide to prepare a plan to advertise your business. You would probably need professional advice for this.
Critical questions to be answered:
- Who are the potential customers we are going to sell to?
- What defines customer segments?
- What needs does the idea satisfy? In other words, what is the problem, pain, or need of your customer?
- How do customers currently satisfy this need?
- How many customers are in this market?
- What is the projected growth in this market?
- What is the proposition for customers? i.e. Why is your solution better than the competitors in terms of benefits and features?
- Why is this approach innovative, inventive, and compelling? A must-have ….. what is your big promise?
- What are the implications for the customers of buying from you?
- What do we need to do to confirm the size of this market?
- How fragmented is this market?
Thomas Cullen Founder and C.E.O, www.sherpha.com “Keeping Business Focused”
Looking forward to hearing from you https://sherpha.com/contact-us/
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We recommend you buy “Market Research, Analysis and Opportunity” from https://sherpha.com/maps-guides-2/ for detailed step by step instructions https://www.amazon.co.uk/dp/B082FJ33HX?ref_=cm_sw_r_kb_dp_P3J7DbBGB7FZR&tag=kp025-21&linkCode=kpe
Copyright December 2019
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