June 24, 2010

How to Conduct Kick-Ass Market Research

That title is misleading, I'll say that right now. I have no idea how to conduct kick-ass market research. But the title, "I Think This is How You Conduct Market Research, I Think...the Kick-Ass Part is Entirely Up to You" isn't quite as zesty.

Originally, this post was going to be about steps for writing a business plan. But then I realized that it would be about 33 feet long. Since I'm not trying to make readers kill themselves, I decided to just focus on one part at a time.

For this portion, I'll talk about market research. For a fresh-faced entrepreneur attempting to start a business on her own, this part is very strenuous, involving a lot of research. Like, research until your fingers are numb from typing, until your feet are tired from walking, until your armpits smell because you forgot to put on deodorant that morning.

Some of the more professional business owners like to hire fancy companies to do this for them. However, I disagree. I think doing the research yourself not only gives you a better idea of how your business will look, it will also give you ideas for improvement along the way. I also think that if you are a professional business person who is capable of hiring a fancy company to do this for you, you are on the wrong freakin' blog. Go to the I'm-a-Professional-Business-Owner forum or something. This is for misfits who don't really know what they're doing.

I'll go into more detail, after the jump. I'll even throw in random photos for your troubles.

For those of you who are just here for the male burlesque photos, just keep scrolling.



Here are some of my research methods, however clunky they may be:

Scope the Area
To get an idea of what kind of cart vendors were already set up in the area I was scoping, I went there and walked. A lot. Like, two miles worth of walking around blocks, making notes about locations and services provided. Along the way, I also noted where any coffee-serving facilities were located, as well as their hours. Back at the office, I incorporated all of this data onto a map for a quick, visual guide.

While this gave me a good start, the next step to figuring out a location was to go to the Department of Public Works and obtain a copy of all the permitted vendors in Downtown Denver. Eighteen pages of vendor after vendor, as well as all the areas which are off-limits. Again, I plugged this information into a map.



PICTURE BREAK!


I got really bored at work the other day (after asking my boss for work to do and being told I could research her latest car purchase), so I traced and deleted photos, leaving only the lines.



Okay, back to business.

Figure Out Traffic

In deciding the best location, I had to figure out which areas get a lot of passersby. This broke down into three occasions: daytime, nighttime, and special events. For daytime, I Googled until I came upon a goldmine: the city had done some demographic research to help business owners with exactly the step on which I was working. Score!

(This is an important thing to remember: your city is very helpful in business-planning. Obviously, they want your business to succeed, because they, in turn, will succeed. So, rely on their assistance where you can.)

I already had a pretty good idea of nighttime activity (thank you, Bender of '08!), so I moved on to the special events.

Downtown, there are many cultural events taking place on any given day. I started with the baseball field, figured out the average days, times, and attendance for games. Same with the football field. And the local performing arts center (which hosts both plays and ballets). Finally, I figured out all the major festivals and the expected attendance of those.

This research gave me a good idea of how many people are in the area and during what times. Through this, I can get a better estimate of how many products I can potentially sell, not to mention, it gives me an idea of which days and times I may want to be available to work.

Busy, I tell you. I've been busy.



Do a Little Espionage

Visit your competition. Try their products. Note their pricing structure. Figure out what works and what doesn't work. Do they have tasty food but a long lead time? How can you do it better? Google them and see what kind of feedback is floating around cyberspace.

When we almost literally ran into another coffee cart, Kort and I took the opportunity to question them a bit, while waiting for our drinks. Have they been busy? Are they opening other locations? Later, we discussed other things privately: was their pricing fair? How did our drinks taste (mine was lousy...yay!)? What was the downside of their location (we knew our pals at Falling Rock would hate having them there)? How could we do better? And so on.

Talk to Potential Customers

This doesn't necessarily mean talking to strangers on the street. Rather, talk to people you know who frequent the area you are thinking of setting up your business. Ask what they would want in a _________ business. Listen to any ideas they have, because if they are thinking it, at least 100 other people are, as well.*

*This is not a verified fact.



With this newfound information, I was able to write about the following topics in this section:

- Industry Description and Outlook
- Target Market (including size)
- Evaluation of Competition (apparently, "they all suck!" isn't sufficient)
- Highlights and Conclusions

Essentially, your readers will want to know why you picked the spot you did, why you think you'll do well, who you plan to sell to, and why they will buy what you are selling.

Stay tuned, because next, I'll be talking about financial forecasts and capital expenditures! You can pump your fist...I know I did!


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