5 Step Venture eMentoring Program™
Module 2e: Market Analysis
There must be a market for your goods or services, or you cannot have a business.
Even for a part-time business, it is essential to understand who you are going to sell your product or services to, and to understand how you will let them know about your business. It may be as simple as placing your items on the lawn with a sign, as we discussed about the whirligigs earlier. It may be more complex. Now is the time to think about these questions and figure out the answer.
Here are your questions:
This is another step where going to the trouble to gather data and being very honest with yourself is critical to your future success. The good news is that you do not have to be a trained statistician to analyze your market place, nor does the analysis have to be costly. The rest of the good news is that there are numerous resources where you can find the data and that will help you to understand what the data tells you about your market.
You do not have to do this alone. There are many business counselors available to help you in this process for no charge. Look in BUZGate.org, choose your state, choose Free Help, and look under Marketing. You will find someone that can help.
Your market analysis may range from thinking about the traffic that flows in front of your house if you plan to sell from your front lawn, to a broader consideration of how many potential customers there are in your community, or even beyond. A part-time hobby business can market on the Internet through a website, and have the potential to reach a national or even international market.
You can obtain information about the size of your market from your chamber of commerce, local planning commission, trade publications, marketing consultants, other businesspersons, schools and colleges. The local chamber of commerce and planning commission are great places to start, not only because they have excellent data readily available, but also because there is usually someone there who will help you find and understand the information you need. The planning commission will have trend analyses and often even have traffic counts for various areas to help in location assessment. The marketing department at your local college or university is another great source of help. It may be possible to work with a professor to develop a market research project that students will perform for you as a part of their class work - an excellent, no-cost resource.
Other excellent sources of information are the Federal Census and state department of labor. The Federal Census data is broken down by many different consumer and business characteristics - even down to neighborhood areas. Find and review the census tracts that are relevant for your market area. Another valuable resource is Economic & Labor Market Information (ELMI) reports available from your state Department of Labor. This information provides both profiles of labor market characteristics, showing earning levels for different employment categories, the size of these categories in your area, and a forecast of how these categories are expected to grow or change over the next ten years. The ELMI system also contains community profiles that show differences between community areas.
There are many other excellent resources, especially on the web. The danger though with web-based research is that the sheer quantity a web search can return can be overwhelming, and it is often difficult to know its validity. One of the very best places to use is the local library - and the help of the librarian!
What are you going to sell?
Who is going to buy it?
Why are they going to buy it from you?
Are there enough customers in your market area that will buy from you, to make the business succeed?
In this session the goal is to examine the reasons you believe that there will be a market for your goods or services. We also showed you a number of sources for market data.
The key to answering this marketing question is to make it all personal.