Should you open your business, or offer your services in a new area? Market research can give you the answers.
I am sure you have had someone ask you, “How come your products (or services) are not offered in (insert city or store location here)?” Although this question is often music to a business owner’s ear, it can also bring about anxiety. You start asking yourself, “Why am I not doing business in that location? Are there really enough people in the area who would use what I have to offer?”
You can get good answers to these questions - while simultaneously improving your business in other ways - by using market research. Market research gives you the facts and figures necessary to make an informed decision about your business. Market research can help forecast the success of a promotion, for example, or help you decide whether to expand your product line, and it can be implemented in a variety of circumstances. And it is a great tool you can use to justify whether starting or expanding a business to a specific location will be in your organization’s best interest.
While you may be tempted to leap into a location someone suggests to you, it will be to your benefit to discover more about the proposed location by using the following techniques:
- Market Profiles - These are reports that allow companies to see how successful they would be before starting or expanding to a particular location. These reports enable you to learn more about the location’s business environment, while simultaneously identifying if there is a large concentration of your target market. High quality market profiles will include information such as demographics, psychographics, etc. Companies (especially small businesses) need to stay on top of these issues if they want to be viewed as leaders in their respective industries. The degree to which attention is paid to these issues will determine the level of your success.
- Surveys - In the event that the location has a demand for your product or service, you need to know how your target market is currently having their needs met. Where and to whom is your target market currently going in order to obtain the product or service you plan to offer? Are there any interests or activities that your target market participates in that are unique to this location? Conducting a survey will enable you to answer these and other very important questions, thereby decreasing the amount of time it will take to get your business off the ground.
- Location Observation - Once you determine how and where your market is currently obtaining the products and services you plan to offer, you will be able to identify ways to enhance the customer experience. For example, if you sell fragrances and plan on selling them in a department store, creating innovative environmentally friendly packaging can help you stand out from the crowd. Observing how your competitors operate will ensure that you do not make the same mistakes they do. Be an innovator not an imitator!
In order to greatly economize your time and money, you must offer your products and services in locations that have a large concentration of your target market. A person may have the best of intentions when they suggest that you operate in a particular location, but you must remember to do your market research to ensure that starting or expanding to this location is warranted.
Selecting a location to operate your business based upon a gut feeling or a suggestion can be a costly decision. Careful market research can help ensure that you do not leap into a location that you will not be able to effectively serve.
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