The Importance of Knowing Your Market can be a big deal?
As you enter into your franchising and small business venture, there are so many factors to consider. From the location to the staff, there are decisions that have to be made day in and day out. However, we cannot stress enough how important it is to know the market you are entering whether you are new to the area or have been living and working there your entire life. Doing research, talking with other business owners and even getting to know your prospective customers can give you valuable insight and help with the planning and execution of your business.
Knowing where you market is and how they get around can be key in determining a profitable location for your franchise. If your service is landscaping and you travel to your customers, you will likely want to be in an area where prospects have large yards and an interest in quality landscaping work. Since you are going to them, their transportation is less of a concern. On the other hand, if you are selling organic groceries you need a location that is central in a neighborhood with a good amount of parking spots. If a majority of your market walks instead of drives, a parking lot isn’t nearly as important as having a location that a lot of people will walk by each day.
You should also know the median income of your market and how it relates to the cost of your product or service. Can your market afford what you are selling? If not, you should re-evaluate either what you are charging or the area you plan on opening up shop. Some other good figures to look at is the average price of housing, average cost of rent if you are in a big city along with the median ages. Income along with ages can help you nail down the market in your area and also deduce what their interests could be and where they could potentially spend their money (on your products and services hopefully!).
Using online reports and research can be a great way to look further into your market. International research companies have looked into all sorts of demographics and published the results online. You don’t have to recreate the wheel, just find and read about your market. Think about their education, family life, interests and most importantly their spending habits. How are they spending their money when they are buying products or choosing services? Knowing who the market is and what they do will be a big part of your business’ success or failure.
Knowing your market can help you plan better in almost every facet of your business. From location to marketing, the key to success of knowing whom you are speaking to and prospecting. Franchisees have the advantage of a headquarters that should be able to provide them with a lot of this insightful information. Using resources from headquarters can put franchisees ahead of the curve when it comes to utilizing market information the make the right business decisions.