Market Research Business Planning

Reading Assignment Read the Venture Profile, “He shoots, he misses” and answer the following: What did Giancola not do that he should have prior to starting his venture? Create a definition of “Market Research”

Market Research is used to: Provide data about customers, products, services, prices, etc. Project future sales Tell entrepreneurs what products or services are in demand Help the Entrepreneur refine and adapt their products or services

There are three main forms of market research: Primary Research – gathering data firsthand (observation, interviews and surveys, etc.) Secondary Research – using data gathered by others (Statistics Canada). Internal Research –using a business’s own records to gather information (about sales, products, customers or complaints).

For Your Business Plan The market research section of a business plan has the following sub-sections: Customer Profile Analysis of the Competition Market Size

1. Customer Profile It is important to know who will be buying your product or service; this is referred to as your “market.” You must answer the following: Where do your customers live? What is their demographic makeup? (i.e. their age, education, gender, etc.) How many are there? (use statistics where possible) What makes them “tick”? (i.e. their likes, dislikes, etc.) Why will they buy your product/service?

Assignment – Your Town

2. Analysis of the Competition A.) You must identify the two main competitors that you will have to compete within the area where your business will operate. For each, you must: - Describe what they offer your target market - Describe any overwhelming strengths and weaknesses held by the competition - Explain what you will do better than them B.) You must complete a SWOT analysis for your own company - SWOT represents Strengths, Weaknesses, Opportunities and Threats, with regard to your own company. - Strengths and Weaknesses are internal; you have control over these elements, as they exist within the company. - Opportunities and Threats are external; you do not have control over these elements, as they exist outside of the company. - See example on handout

3. Market Size Market Size is the amount of money being spent overall for a product or service. - Market Size is always expressed using a dollar amount. - To calculate Market Size you use the following formula: (# people in target market) X ($ spent on product/service) Example: Joe is opening a shoe shine business in New York City. Joe predicts that 765 people will use his service. Per year, people spend $376 on this service. The size of Joe’s market is $287,640 That is, there is $287,640 spent on this service per year; that is, all total, people in New York City spend $287,640 on this service.