How to learn about your industry

operations_managementGetting to know your industry is an important step in getting to know your business – and making plans for its success. This involves gathering large amounts of data, as well as talking to members of the industry – the ones who know most about it. Important information to know about your industry includes:

– Is the industry growing?
– Where are the opportunities in the industry?
– Who are the key players in the industry?
– Are there young, successful firms in the industry?
– How is new technology being employed in the industry?
– What are the typical financial results for businesses in this industry?

Do primary and secondary research to learn more about your industry. Also, research your industry using your NAICS code.

For more resources that can be used for research related to your industry, check out the Market Research section of our Essential Web Links page.

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Examples of secondary market research

secondary-market-researchAs we discussed last week, primary market research involves getting data straight from its source.

This differs from secondary market research, which involves relying on research conducted by someone else, like other businesses or governmental agencies.

Here are some examples of secondary market research sources

  • Census data collected by the government
  • Other population demographics collected by municipal, provincial or federal government agencies
  • Reports issued by research institutions
  • News reports
  • Academic journals
  • Newsletters
  • Magazines and newspapers
  • Pamphlets
  • Encyclopedias
  • Financial statements and reports
  • Legal documents
  • Universities, colleges, and technical institutions
  • Business directories
  • Professional associations or unions (including business associations)
  • Records and reference materials located in public or private libraries
  • Banks
  • Demographics and market research compiled by businesses and media outlets about their clients or audience

For further reading, check out our blog post about when to use secondary market research.

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What’s so important about your target market?

At GoForth Institute, we’ve seen many entrepreneurs with a great business idea and a burning desire to get going. However, they have no idea who they’re going to sell to! In a way, we understand – starting a new small business is one of the most exciting things you can do in your life. But we also know that knowing your target market inside and out does amazing things to your odds of small business success.

Why do research your target market?

Let’s say you’ve decided to open a flower shop. You find suppliers, lease a great building and flip your “Closed” sign to “Open.” And then you wait. And wait. And wait. By the end of your first week you’ve made a total of two sales. What went wrong? Here are some possibilities:

  • You opened your shop across the street from a family-run flower shop that has been successful in that location for 25 years, with many loyal customers.
  • Your shop is located in an area that gets little to no foot traffic, like a business park.
  • Your prices are much too high for what people are willing to pay.
  • The people you think want to buy your flowers simply don’t.

Right there are four barriers to small business success that market research could have revealed. We can’t stress it enough – take the time to research your market. It can make the difference between a successful business and falling flat right out of the gate. Don’t be put off by the time and potential cost of it – it’s investing in your small business’ success.

Resources for market research

Market research is a varied thing, with many different avenues to explore. Check out some of our related blog posts for more information about the different types of market research: Primary and Secondary.

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When to use secondary market research

In our last post, we talked about the four types of primary market research. Secondary market research is also available to entrepreneurs looking to understand their market better – the size of their target market; the needs, attitudes and behaviours of customers; desired price points; and customer satisfaction levels

What is secondary market research?

Secondary market research is information that’s collected by another person or organization that entrepreneurs can use, often for a fee. If you’re interested in opening a book shop, you may access statistical information collected by the Canadian government on things like income levels in your desired area, spending patterns and neighbourhood development. This data was collected by someone other than you or your business, and you don’t own it – it’s secondary market research.

Pros and cons of secondary market research

Secondary market research is great for entrepreneurs who want to be as prepared as they can to open their business. It’s often cheaper and less time-consuming than primary market research, and publicly available from libraries, websites and trade associations. However, we do have some words of caution when using secondary market research.

Unlike primary market research, data from other sources isn’t gathered with your specific business in mind. This means you may need to access several sources of secondary data, or you may not be able to find information that covers exactly what you need to know.

Look out also for when the research was undertaken – in our opinion, a study older than three years is too old, given how fast the business world moves.

It’s also important to consider the source of your primary market research. Look for legitimate sources that wouldn’t have been swayed by the almighty dollar. Good sources of secondary market research are government organizations, research institutions, universities and academic journals.

The most important thing to keep in mind when analyzing secondary market research? Don’t believe everything you read! Relying on old, inaccurate or irrelevant information can cost your small business a lot of time, money and stress. Analyze everything carefully and trust your instincts.

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