How Do I Assess the Market For My Small Business?
There are many things to consider when starting a small business-- funding, licenses, location, etc. One big thing to look at is whether or not it’s a good time to enter the market. That question’s answer will depend on many factors, depending on the details of your business idea.
Assessing The Market
What market are you entering? We say “The Market,” but there are actually so many little facets that make up one big market. What type of business are you? Are you trying to break into the restaurant industry or open a plumbing company? Find your target market and start to analyze it.
The next thing to think about is your potential customer base. Are you looking for partners, such as if you are opening a food distribution company, or clients, like a restaurant? Think specifically about the customers you want to target with your product or service, and what mindset they are in right now. Are they open to new business? Can they afford it? If you know people who might be a part of your target market, talk to them and see what they think about your business venture.
Consider the challenges associated with opening your business at this particular time. Are there any specific barriers you will have to overcome? For instance, it is the slow season for your industry?
Are you wanted or needed? There is a big difference between the two. Will you be the only lawn care service that operates in a rural area, or will you be one of five in suburbia? If you can find a market where you are a need rather than a want, it will be much easier to enter it.
If you are going to be one of many in an area, consider how tough the competition will be. Are your potential competitors loved and well established? Will they be able to offer better rates or a better product or service than you? Also consider others like you who are looking to enter the market at the same time. You could be overshadowed if three other laundromats just like yours open up within the same month.
Narrowing down your market, focusing in on your potential customers’ desires, and trying to foresee any time sensitive challenges are ways to make sure the market is ready for your new business.
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