How to Determine the Economic Validity of a Business
The American dream for many includes owning and operating a business. Researching the community of consumers in your area, matching your products to their needs and considering other businesses in the same niche as you can give you an angle on your commercial goal. This is the surest way to see whether your business and the products you offer, or the services you provide, can take a valid position amid any competitors. A market analysis helps you make educated choices in the ways your business might rise above the rest.
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Instructions
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A Market Analysis
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1
Structure your company's work days and hours. You will need to summarize who the executives of your business are and what positions they will fill. List the skills, expertise and the responsibilities of the principle owners and operators. Write a statement of your businesses purposes and goals, noting what makes your business different from the others.
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2
Describe the products or service you offer, and describe how your products will fill a need in the community.
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3
Learn who your target audience is by studying customer demographics. Know the areas your customers will come from. Find out how many potential clients you have in the surrounding towns, and what their average income is. Divide the total income of the area by the population to determine how much cash is flowing through those households.
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Check what buying decisions people make in your location. Most businesses see sales increase during certain seasons and decrease during others. Engage a class to conduct a survey to learn the buying trends of the age group you've targeted. Purchasing criteria can be determined from your surveys.
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5
Find your competitors and learn what their strengths and weaknesses are. Evaluate your results and your position by comparison.
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6
Outline the steps of how you will market your business.
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Tips & Warnings
In your plan, include a tally of the resources required as wells as a breakdown of all your costs to conduct business, including building rental, fixtures and equipment, additional help and inventory.
Research customer demographics online by entering the name of the city and state in the search engine. Click on visitor, or city demographics, facts or data.
Lenders and investors will not look at your business plan without a prepared market analysis. It's their way of seeing how they get their money back.
Review and assess your company's position periodically and make needed adjustments.
