Before you commit hours to researching what customers want from you, it makes sense to find out whether you have a viable target market.
The cheapest and simplest way to do this is through "secondary data," or information someone else has already gathered for you. Usually, this takes the form of various statistics and can only answer closed-ended questions: How many? When? Where? Your own questions will depend on your customer profile and become more tightly targeted based on what you find out as you go.
You can find answers in a number of ways:
1. Reference librarians: Most are delighted to help you research. Often, they'll practically do it for you. These days, they can look up a lot of what you need on computer databases, and you have a decent chance of walking away with all your answers. Printouts may cost several cents per page.
2. The local field office of the Department of Commerce: It should supply you with free or nearly free information on population, demographics, housing, the economy, market trends, surveys of current businesses, and more.
3. The business libraries of local universities: These often have more specific information on business trends than a public library. Ask the librarian for help.
4. Your local SBA branch or Small Business Development Center: It has a multitude of publications and business literature full of advice and market forecasts.
Once you've got all the answers, it's time for a judgment call: Do you have a working market?
Only you can decide if 14 competitors are too many for 19,000 target customers, or if you want to gamble on the fact that your target customer spent 30 percent more last year than three years ago. If you don't like the numbers, at least you've just saved yourself a potential financial disaster. Now you're armed with a much better grasp of market conditions to revamp your business idea or marketing direction and return to Step 1.
- How many people in the Denver area are between 29 and 45 years old?
- How many of these are married?
- How many couples have young children (under age 10)?
- How many have a combined household income of $60,000 or more?
- What percentage of them own their own homes?
- Are the numbers of homeowners and relatively high-income families in my area increasing or decreasing?
- How many decorative painters and faux finishers work in my area? Who are they?
- How many were there five years ago, three years ago and last year? Are there more of them now than before?
- How many clients hired them last year?
- How much did they make on average?
- Where are they located? Are there more of them in certain areas than others?