Outline the Market for Your New Business

If you’re thinking about starting a business, most likely you have dreamed of one that revolves around your interests. But what does the market need or want? Are you noticing trends in what people are buying, or how and where they are buying those goods?

Determining the marketability of your start-up business is typically done in the context of creating a business plan and performing an analysis of your competition. It is a multifaceted exercise, requiring research you may not have done so far. Here are some areas of inquiry to help you explore marketability.

• Consider whether the business offers a new solution to an old problem or complements an emerging trend. The untapped markets that are profitable to tap into are few and far between. They’re also riskier.

• Have a clear picture of your target market. These are the people and other companies that are likely to want or need what your business has to offer.  “All restaurants” is a broader market than “fast food joints.” “All restaurant patrons” is a broader market than “senior citizens who eat out.”

• Understand the benefits that your product or service offers. Can you quantify them? (In other words, how much money might a customer save by buying from your company instead of someone else?) Knowing these benefits will help you generate ideas for future promotions.

• Examine industry data that can confirm whether there is a sustained, preferably growing demand for your product or service. (Keep in mind this data is sales driven, not marketing driven.) Have you tapped all likely sources of industry data, such as trade associations and government agencies?

• Identify the percentage of market share that it is realistic for you to capture. The more competition you have, the lower the margins will be.

• Consider how realistic your pricing is. How can you present your product or service to potential customers so that it appears to be a good value, while still affording you a healthy profit?

You may find that you don’t like the answers you’re getting to your market research. But if you’re committed to creating a viable business that can provide you with a good income, the sooner you know the answers to these questions the faster you can make a course correction to succeed.

For more insights on preparing to be an entrepreneur, contact SCORE “Counselors to America’s Small Business.” SCORE offers free and confidential business counseling, including information and assistance on the business planning process.

If you would like to discuss this topic or business planning, business growth strategies or a specific business issue, contact SCORE® “Counselors to America’s Small Business.” To contact the Greater Binghamton SCORE® Chapter 217 for assistance call 607-772-8860 or 1-800 -920-6972. You may also contact SCORE® for person to person counseling appointments at the above telephone numbers. If you are already in business onsite assistance is also available.