Read Start Your Own Business Online
Authors: Inc The Staff of Entrepreneur Media
Start Your Own Business (16 page)
WARNINGDo you know what your competition is up to? If not, you could be headed for trouble. A study by professors at UCLA and Stanford University showed most business owners are clueless about the competition. Almost 80 percent were blind to their opponents’ actions—which can lead to lost customers and market share.The answer? Role-play. Put yourself in the competitors’ shoes and analyze their strategies. Visit their stores. Use the internet to dig up as much information as you can about them, their tactics and their goals.
One of the best websites for researching the competition is Hoover’s Online (
hoovers.com
), which, for a fee, provides indepth profiles of more than 43,000 companies. However, there is also free content available, plus you can try a free trial subscription. You can also gather information on competing businesses by visiting them in person. Take along a questionnaire like the “Sample Market Research Competition Questionnaire” on page 97. This one is for a bar/club, but you can customize it for your particular business.
Market Research Methodshoovers.com
), which, for a fee, provides indepth profiles of more than 43,000 companies. However, there is also free content available, plus you can try a free trial subscription. You can also gather information on competing businesses by visiting them in person. Take along a questionnaire like the “Sample Market Research Competition Questionnaire” on page 97. This one is for a bar/club, but you can customize it for your particular business.
In conducting your market research, you will gather two types of data: primary and secondary.
Primary research
is information that comes directly from the source—that is, potential customers. You can compile this information yourself or hire someone else to gather it for you via surveys, focus groups and other methods.
Secondary research
involves gathering statistics, reports, studies and other data from organizations such as government agencies, trade associations and your local chamber of commerce.
Secondary ResearchPrimary research
is information that comes directly from the source—that is, potential customers. You can compile this information yourself or hire someone else to gather it for you via surveys, focus groups and other methods.
Secondary research
involves gathering statistics, reports, studies and other data from organizations such as government agencies, trade associations and your local chamber of commerce.
The vast majority of research you can find will be secondary research. While large companies spend huge amounts of money on market research, the good news is that plenty of information is available for free to entrepreneurs on a tight budget. The best places to start? Your local library and the internet.
Reference librarians at public and university libraries will be happy to point you in the right direction. Become familiar with the business reference section—you’ll be spending a lot of time there. Two good sources to look for:
ThomasNet
(
thomasnet.com
), an online resource that connects industrial buyers and sellers, and the
Harris InfoSource All-Industries and Manufacturing Directories
(
harrisinfo.com
). Both sources can be found at most libraries, as well as online, and can help you target businesses in a particular industry, read up on competitors or find manufacturers for your product.
ThomasNet
(
thomasnet.com
), an online resource that connects industrial buyers and sellers, and the
Harris InfoSource All-Industries and Manufacturing Directories
(
harrisinfo.com
). Both sources can be found at most libraries, as well as online, and can help you target businesses in a particular industry, read up on competitors or find manufacturers for your product.
To get insights into consumer markets, check out the
Statistical Abstract of the United States
, which you can find at most libraries. It contains a wealth of social, political and economic data. Ask reference librarians for other resources targeted at your specific business.
AssociationsStatistical Abstract of the United States
, which you can find at most libraries. It contains a wealth of social, political and economic data. Ask reference librarians for other resources targeted at your specific business.
Your industry trade association can offer a wealth of information such as market statistics, lists of members, and books and reference materials. Talking to others in your association can be one of the most valuable ways of gaining informal data about a region or customer base.
Look in the
Encyclopedia of Associations
(Gale Cengage Learning), found in most libraries, to find associations relevant to your industry. You may also want to investigate your customers’ trade associations for information that can help you market to them. Most trade associations provide information free of charge.
Encyclopedia of Associations
(Gale Cengage Learning), found in most libraries, to find associations relevant to your industry. You may also want to investigate your customers’ trade associations for information that can help you market to them. Most trade associations provide information free of charge.
e-FYIIn the business of e-commerce? ComScore (
comscore.com
) is a market research company that will evaluate your e-commerce site. They offer a variety of options, from web-based marketing strategies to custom research. Even if you’re not ready for professional advice, exploring the site will give you an idea of the questions you should be asking in your own research.
Read your trade associations’ publications, as well as those aimed at your target customers, to get an idea of current and future trends and buying patterns. And keep an eye out for more: New magazines and newsletters are launched every year. If you’re not following all of them, you could be missing out on valuable information about new products and your competitors.
Government GuidanceGovernment agencies are an invaluable source of market research, most of it free. Almost every county government publishes population density and distribution figures in widely available census tracts. These publications will show you the number of people living in specific areas, such as precincts, water districts or even ten-block neighborhoods. Some counties publish reports on population trends that show the population ten years ago, five years ago and today. Watch out for a static, declining or small population; ideally, you want to locate where there is an expanding population that wants your products and services.
The U.S. Census Bureau (
census.gov
) turns out reams of inexpensive or free business information, most of which is available on the internet:
census.gov
) turns out reams of inexpensive or free business information, most of which is available on the internet:
• The Census Bureau’s
State and Metropolitan Area Data Book
offers statistics for metropolitan areas, central cities and counties.
• The
Census Product Update
is a monthly listing of recently released and upcoming products from the U.S. Census Bureau. Sign up for a free e-mail subscription at
census.gov
.
•
County Business Patterns
is an excellent Census product that reports the number of a given type of business in a county by ZIP code and metropolitan and micropolitan statistical area.
• For breakdowns by geographical area, look to the
Economic Census
, which is published every five years.
Most of these products should be available online or at your local library. If not, contact your nearest Census office for a list of publications and ordering information, or write to the U.S. Census Bureau, 4600 Silver Hill Rd., Washington, DC 20233, (301) 763-INFO or (800) 923-8282. Many Census Bureau reports are also available on CD or DVD, or are free on the internet.
Sample Market Research Competition QuestionnaireWhen you visit the competing bars in your area, you want to use the information you gather to develop a competitive strategy for your own establishment. Improve on their strengths and capitalize on their weaknesses. Fill out this questionnaire for each of the bars you visit to help you assess your competition and your customers.
The U.S. Government has an official web portal that is another good source of information. For instance, at the
USA.gov
website (
usa.gov
), you’ll find a section for businesses that is a one-stop link to all the information and service that the federal government provides for the business community. Tax questions? Wondering about how best to deal with all the regulations and red tape? Chances are you’ll find your answers at
business.gov
by clicking the “Finance and Taxes” link.
USA.gov
website (
usa.gov
), you’ll find a section for businesses that is a one-stop link to all the information and service that the federal government provides for the business community. Tax questions? Wondering about how best to deal with all the regulations and red tape? Chances are you’ll find your answers at
business.gov
by clicking the “Finance and Taxes” link.
“You must be the
change you wish in this
world.”—MAHATMA GHANDI
Or you might try the Commerce Department’s Economic Indicators web page (
economicindicators.gov
). Curious if the world is ready to spend money on your exercise equipment for goldfish? Then the Economic Indicators site is for you. Literally every day, they’re releasing key economic indicators from the Bureau of Economic Analysis and the U.S. Census Bureau.
economicindicators.gov
). Curious if the world is ready to spend money on your exercise equipment for goldfish? Then the Economic Indicators site is for you. Literally every day, they’re releasing key economic indicators from the Bureau of Economic Analysis and the U.S. Census Bureau.
If you’re planning to get into exporting, contact the Department of Commerce’s International Trade Administration (ITA). The ITA publishes several thousand reports and statistical surveys, not to mention hundreds of books on everything American entrepreneurs need to know about exporting. Many of the reports and books are available for downloading immediately from the ITA’s press and publications department (
ita.doc.gov
). Here you’ll also find information on how to order printed copies, including archived publications. Or if you prefer, call the Trade Information Center at (800) USA-TRADE.
ita.doc.gov
). Here you’ll also find information on how to order printed copies, including archived publications. Or if you prefer, call the Trade Information Center at (800) USA-TRADE.
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