How do I perform an effective market analysis?
March 18, 2008 8:21 AM Subscribe
I'm trying to start a small business. Please give me tips on performing market and competition analyses.
I work at a non-profit, and I'm trying to launch a social enterprise (small business) that provides property maintenance services which can employ our clients directly. We're looking at creating low-skill jobs doing things like grafitti removal, trash pick-up, shovelling, basic landscaping and maintenance, etc. - whatever services are both low-skill (low education, low job experience) and in demand.
I need to perform a market and competition analysis to determine what kind of demand is out there, figure out pricing, etc. We're targetting businesses, non-profits, and residential properties in or around this neighborhood that might have property maintenance needs, as well as city and state contracts. Open to suggestions on possible targets if you have any.
Can you point me to some resources that provide direction with this piece of business planning? Further, I'm interested in hearing any experiences you have doing this kind of analysis. What should I keep in mind when I speak with potential customers? Potential competition? Should I focus on just gathering market data, or should I also use this as an opportunity to start selling a business that isn't off the ground yet? Are there ways to phrase questions about sensitive information (ie: who does your property maintenance? how much do you pay them?) that up my chances of getting those questions answered?
Thanks!
I work at a non-profit, and I'm trying to launch a social enterprise (small business) that provides property maintenance services which can employ our clients directly. We're looking at creating low-skill jobs doing things like grafitti removal, trash pick-up, shovelling, basic landscaping and maintenance, etc. - whatever services are both low-skill (low education, low job experience) and in demand.
I need to perform a market and competition analysis to determine what kind of demand is out there, figure out pricing, etc. We're targetting businesses, non-profits, and residential properties in or around this neighborhood that might have property maintenance needs, as well as city and state contracts. Open to suggestions on possible targets if you have any.
Can you point me to some resources that provide direction with this piece of business planning? Further, I'm interested in hearing any experiences you have doing this kind of analysis. What should I keep in mind when I speak with potential customers? Potential competition? Should I focus on just gathering market data, or should I also use this as an opportunity to start selling a business that isn't off the ground yet? Are there ways to phrase questions about sensitive information (ie: who does your property maintenance? how much do you pay them?) that up my chances of getting those questions answered?
Thanks!
Response by poster: Yeah, I'm in the United States.
Also, just to clarify, I know that there's a substantial body of information about this topic available on the internet already. Specifically, there are a lot of publications which speak to what information should be collected from a market/competitor analysis, and that is all very useful. What I've found to be lacking - and what I'm hoping to get here - is information on how to collect data from potential customers and/or competition.
Specifically, what questions should I ask and to whom? And, more importantly, how do I frame those questions so that people will talk to me?
posted by lunit at 9:41 AM on March 18, 2008
Also, just to clarify, I know that there's a substantial body of information about this topic available on the internet already. Specifically, there are a lot of publications which speak to what information should be collected from a market/competitor analysis, and that is all very useful. What I've found to be lacking - and what I'm hoping to get here - is information on how to collect data from potential customers and/or competition.
Specifically, what questions should I ask and to whom? And, more importantly, how do I frame those questions so that people will talk to me?
posted by lunit at 9:41 AM on March 18, 2008
Best answer: COMPETITION
One good way to gather information from local competition is to simply act as if you were a customer looking for the service they offer. For instance, call a competitor and pose as a property manager looking for estimates on maintenance for several of your properties. Tell them you have several properties of various sizes and needs; this will give you a general scope of their charges for various services. You also might inquire if they have a pricing sheet.
CUSTOMERS
A grass-roots approach can get you TONS of good information. Assuming you have an idea of who you want to target, try and schedule meetings with whomever is in charge of property maintenance at the companies you're targeting. It helps if you've already gathered your competition's information, as you can use this as leverage during the meetings. You don't necessarily have to sell them at this point, you can simply state that you are considering offering a service in this area (or expanding to the area if you want to meet under the guise of already having a company) and curious about the pros/cons of their current service. The great thing about talking one on one is that you can generally get a good feel for how open they are to considering a new service.
Same goes for residential properties. Can't really beat door to door information gathering. Plus, as a bonus, you are showing your potential customers that you care what they think, which can result in more sales down the line.
My 2 cents.
posted by ISeemToBeAVerb at 10:44 AM on March 18, 2008
One good way to gather information from local competition is to simply act as if you were a customer looking for the service they offer. For instance, call a competitor and pose as a property manager looking for estimates on maintenance for several of your properties. Tell them you have several properties of various sizes and needs; this will give you a general scope of their charges for various services. You also might inquire if they have a pricing sheet.
CUSTOMERS
A grass-roots approach can get you TONS of good information. Assuming you have an idea of who you want to target, try and schedule meetings with whomever is in charge of property maintenance at the companies you're targeting. It helps if you've already gathered your competition's information, as you can use this as leverage during the meetings. You don't necessarily have to sell them at this point, you can simply state that you are considering offering a service in this area (or expanding to the area if you want to meet under the guise of already having a company) and curious about the pros/cons of their current service. The great thing about talking one on one is that you can generally get a good feel for how open they are to considering a new service.
Same goes for residential properties. Can't really beat door to door information gathering. Plus, as a bonus, you are showing your potential customers that you care what they think, which can result in more sales down the line.
My 2 cents.
posted by ISeemToBeAVerb at 10:44 AM on March 18, 2008
If you find competition (be open to looking in fields/disciplines that are not obvious), your best bet is figure out if there are ways to differentiate your business.
Are you offering more services? Better prices? A wider service area than your competitors?
Simply being "better" doesn't always cut it, unless customers are very, very dissatisfied with the status quo. People usually don't jump ship based on arbitrary criteria.
posted by catkins at 12:24 PM on March 18, 2008
Are you offering more services? Better prices? A wider service area than your competitors?
Simply being "better" doesn't always cut it, unless customers are very, very dissatisfied with the status quo. People usually don't jump ship based on arbitrary criteria.
posted by catkins at 12:24 PM on March 18, 2008
Response by poster: For anyone interested, I stumbled across this website, which ended up having a lot of the information I was looking for.
posted by lunit at 11:51 AM on March 19, 2008
posted by lunit at 11:51 AM on March 19, 2008
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posted by catkins at 9:26 AM on March 18, 2008