10 Step Program
Session Menu

1. Self-Assessment
2. Business Idea
3. Market Analysis
4. Management Skills
5. Business Planning
6. Forecasting
7. Financing
8. Support Help
9. Venture Launch
10. Monitor Progress
Graduation!

10 Step Venture eMentoring Program™

Session 3: Market Research & Analysis

Module 3a: Why Market Research & Analysis?

The market research or study is one of the most critical parts of the whole planning process. It establishes the base for the feasibility analysis and sales forecasting. A market study identifies target customers, the size of the potential demand and the competition, and includes a comparison of the company’s products or services with those of the competition. Market research and analysis often seems to be the most difficult of the planning activities, yet that doesn’t have to be so. There is a great deal of market information available, even for highly innovative new ideas. Taking the time to find this data and understand it is an essential part of your planning process.

Market research starts with target marketing. Very simply, target marketing means identifying the “target” of your sales and business activities. The clearer you can be, the more accurate your analysis can be. Potential customers can be defined by geographic location, socio-economic or ethnic factors, occupation, age, sex, or any of a thousand other factors. Whatever they are, make sure you identity them. There are some key questions you must answer before you get started. Use the Market Profile Worksheet to define your target market.

You can obtain information about the size of your market from your chamber of commerce, local planning commission, trade publications, marketing consultants, other businesspersons, schools and colleges. The local chamber of commerce and planning commission are great places to start, not only because they have excellent data readily available, but also because there is usually someone there who will help you find and understand the information you need. The planning commission will have trend analyses and often even have traffic counts for various areas to help in location assessment. The marketing department at your local college or university is another great source of help. It may be possible to work with a professor to develop a market research project that students will perform for you as a part of their class work – an excellent, no-cost resource.

Other excellent sources of information are the Federal Census and state department of labor. The Federal Census data is broken down by many different consumer and business characteristics – even down to neighborhood areas. Find and review the census tracts that are relevant for your market area. Another valuable resource is Economic & Labor Market Information (ELMI) reports available from your state Department of Labor. This information provides both profiles of labor market characteristics, showing earning levels for different employment categories, the size of these categories in your area, and a forecast of how these categories are expected to grow or change over the next ten years. The ELMI system also contains community profiles that show differences between community areas.

There are many other excellent resources, especially on the web. The danger though with web-based research is that the sheer quantity a web search can return can be overwhelming, and it is often difficult to know its validity. One of the very best places to use is the local library – and the help of the librarian.

The following sections will help you identify and find the data you need for your own business idea:

Now – on to 3b: Market Profile Worksheet

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