When you plan your business it's very important to think about who your customers will be and why they will choose your business over your competitors. Doing some market research will help you with this.
You'll want to confirm that there is going to be room in the market for a business like yours. First of all check out the competition. Count how many firms there are already in your area (or, if applicable, nationally) which are similar to yours. Note how many of these are independents and how many are part of a major national or regional firm.
If you plan to attract local businesses and members of the public you should note down the different types of potential client in your immediate area. Will the area produce a big enough flow of clients to support your business or will you need to draw custom from further afield.
It may be that the immediate catchment area is not particularly relevant and that yours will be the sort of business that clients will be prepared to travel to. In this case you should consider the area from other points of view. For example:
- is there adequate parking nearby
- is access easy
- are there other businesses nearby which will attract people into the area
- is the area presenting the right image for your type of business
It may be that, while your business operates from an office environment, clients never visit your premises because you do all your business online or over the phone. If this is the case your catchment area could include the whole country - and perhaps other countries too.
Why will clients choose your business
You'll want to make sure that enough clients will choose your business rather than any existing competitors.
If you expect to obtain much of your work from referrals you should approach the firms or organisations that you would expect would refer work to you to find out:
- if they would need your specialist services
- if they already use the services of a competitor
- what they would consider to be a reasonable fee
- what volume of work they would expect to put your way
- if there is a particular service they would like you to provide
Check out any competitors in the area to see:
- what services they offer
- what fees they charge
- what type of client they are attracting
- if the premises are smart and modern
- if the staff are helpful and polite
This might immediately show you that there is a gap in the market for certain services that your business might offer.
Find out what people want
It can be a good idea to talk to potential clients in your area about your proposals. You could ask them:
- if they would require the services that you propose to offer. If not, is there any other service that they would be more interested in that you could provide
- what opening hours would suit them best. There might be a demand for evenings and weekends
- what, if anything, don't they like about existing businesses like yours
Use the record sheets to note down the results of your market research