If you’ve been dreaming about your business idea for some time, it might come easy to talk or write about it. Beyond your own idea, though, a strong business plan requires a critical eye on the world beyond your own budding company. You’ll need market research about the customers you plan to target and competitive research to know what other companies you’re up against in reaching those customers.
Conducting this research can be fun, and with the amount of information available online, it’s easier than ever to compile much of the information you’ll need to make a compelling case in your business plan.
But that ease of accessing information can be challenging, especially if your digital life is filled with distractions and demands for your attention.
Follow these tips for success collecting market and competitive research for your business, both now and in the future.
1. Set a timer
Once you start researching using free resources online, it’s so easy to get carried away. Set a timer for each research session to keep you on task and prevent you from getting overwhelmed.
Keep a research log to track your progress during each research session. It doesn’t have to be fancy — ordinary notebook paper, a word processing document or even a note in your phone can help you remember what resources you used, what you learned, and what you want to focus on next time you sit down to research your market or competition.
2. Work on market research and competitor research separately
Stay organized by focusing on one type of research at a time.
Market research helps you determine your ideal customer, based on income level, age, gender, or other factors.
Conducting this research is nearly painless thanks to free resources such as the U.S. Census Bureau’s American FactFinder. Your state or city may have its own reports about different locations, the people who live there, and their needs.
Couple statistics with anecdotal evidence that’s inspired your small business for a compelling market research section of your business plan.
Competitor research, on the other hand, focuses on similar companies as your business venture. If you’re opening a location-based business, like a restaurant, that competitor research might involve visiting other venues in person to judge quality, service, aesthetics and other factors through which you want to differentiate your own business. If you’re opening a service-based or ecommerce business, you may have to conduct much of this research online.
Record observations about your competition as you go, so you don’t have to rely on your memory later as you work on your business plan. Want to provide a quick glance at your competition? Use a chart to display your strengths and weaknesses alongside your competitors’.
Focus on one of these areas of research at a time to stay focused, and avoid confusion in these sections of your business plan.
3. Ask for feedback
As with most parts of your business plan, you’ll want to ask for guidance when compiling your market and competitor research. When you think you have a good grasp of your analysis, ask for help reviewing what you’ve gleaned. Family and friends may not have the industry- or location-specific expertise you need, but your community is likely teeming with people who do.
Look to SCORE mentors, local business associations, neighborhood-based alliances, and marketing experts for feedback you can trust. Tap into your business network, or make connections with new contacts. Then, return to your research to make edits, or resolve unanswered questions.
4. Review your research often
Once you write the market and competitive research portions of your business plan, don’t forget about these aspects of building a strong business. Continue to conduct research by reading industry publications and local news, and by attending events within your business community. You need not rewrite your business plan each time a new competitor comes onto the market, but you’ll want to keep notes about what’s happening in your business space and how you plan to respond.
Ready to seek valuable feedback on your market research and competitive analysis? Meet with a SCORE mentor!