The Consulting and Independent
Contracting Corner

Starting a Business 101 -- Market Research

by Elaine Garnet,

Dear Entrepreneurial Spirit:

You have a great business idea and you have assessed your readiness to enter the business world as an entrepreneur. The next step is determining if there is a market for your services. If no one wants to buy your service, you will have to return to square one and rethink your business idea. Market research requires some fortitude, as this is the first time you may hear the word 'No'. Don't take the rejection of your great idea personally. Use the information and feedback to refine your set of services.

Market research can be divided into secondary and primary research. Secondary research uses already published or collected data. Primary research data must be collected by a variety of direct observational techniques, such a mail, fax, telephone or personal interviews. You can do all the market research yourself or hire a professional. This decision is entirely up to you and your pocketbook.

By no means is this an exhaustive list, but these are some of the questions you need to consider.

Secondary Research:

What are the market trends?

Your local public library or Business Enterprise Center has volumes of data on local businesses -- data such as type of industry, products or services, size, location and contact information. Contact all levels of government, associations and media sources. You may also wish to search the Internet for business-related sites. Try government sites such as http://strategis.ic.gc.ca, http://www.gov.on.ca/MBS/english/government/business.html, or http://www.statcan.ca. Use all this information to help you select which companies would be most likely to buy your services.

Primary Research:

Who are my potential customers?

You can use the data collected from your research to determine the type of customer who would need your service, how many customers there are, and where they are located. Apart from customer demographics, you may need to find out about their needs and attitudes, and how satisfied they are with their current service. Can they afford your service? Do they perceive your service as essential or a luxury? How much would they be willing to pay? As noted above, a carefully worded questionnaire delivered by mail, fax, or telephone should help you collect valuable information.

Who are my competitors?

Your competitors may be listed in the Yellow Pages or in directories, such as those put out by the Chamber of Commerce and the STC. In most cases, independent writers can only be found via networking. The STC and its special interest groups are good places to start. Don't be nervous about asking what niche fellow writers are occupying, what they charge, and how successful they have been. Of course, there are some who will not want to share this information. Respect their desire for confidentiality and move on to the next potential competitor. If you have a lot of competition, you might want to revise your business idea to move yourself into a less competitive niche market.

Conclusions:

When you are satisfied with your primary and secondary market research, write a summary to include in your business plan. If you are applying for a loan or line of credit to finance your business, the financial institution will want to confirm that you have fully researched your business potential. You should also assemble a profile of your ideal customer. This will save you endless grief and time because you will know which type of customer to approach.

Good luck.

Sincerely,

Elaine Garnet (CIC-SIG Coordinator)