Studying the Market

The first thing you need to do when thinking about starting a new business is to determine whether you can make a success of it. This means asking tough questions about the potential demand for your products, how much you can charge and whether payback will be sufficient to make it worth your while.

A marketing plan will help you answer these questions.

Although each marketing study is different because every business is different, most seek to answer the following questions:

• What is the market potential for my product or service?
• Who will my customers be? How many units can I sell? How much can I charge?
• Who will my suppliers be and how much will they charge? What credit terms are they likely to offer?
• Who are my competitors and what competitive advantages do I possess?
• How will I get my goods to market and how expensive will this be?
• Will this business produce a large enough profit to justify the sacrifices which will be required?

Armed with answers to these questions and a properly laid out marketing plan, you will be in a much better position to determine the viability of your idea.

Getting the information for such a plan is often quite easy. For instance, one possible technique is to interview potential customers or those already in the industry. Trade and industry associations can also be helpful since they possess in-depth information about their industries.

Many publications and databases can help you assess the potential of industries and markets. (A visit to your local CBDC is a good first step in getting this information).

These plans are dynamic and are only helpful if they change as your business changes. Rather than prepare a marketing plan and file it away in your desk drawer, you should re-examine your plan from time to time in the light of new developments and make the necessary changes. Your marketing plan will then guide and support your efforts on a continual basis.

Go to Planning a Business