Deciding on a Business: Know Your Market First

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Putting up a business is not as simple as developing a product that your friends or a handful of people you know are interested in. Interest is temporary. What you need is something that would capture a market for a long time. It’s not something you buy once, and that’s it.

Entrepreneurs often conduct business feasibility studies before planning how they would enter the market. But in doing a feasibility study, you will already have a product in mind.

Unless you already set on a product or service you want for your business, here are a few points you should consider about the market, or in other words, your target buyers.

The basic needs of people

What do people need every day? The basic commodities would never run out of style because people will keep consuming them.

The best example of this would be food. Whatever the circumstance, people will always eat. But what do they eat? Their diet might change depending on the situation, but at this point, you are assured that food is something that will always have a market. Another basic need of humans is shelter. People pay rent or buy a house. They work hard because they want to pay off their fixed-rate or VA mortgage loans. But what kind of home they live in would vary. The space they need would vary depending on several factors.

People need to be clothed. Whether they wear simple or elaborate clothes, they can’t do away with these, whatever the season.

There are other things that modern society has now considered indispensable. The internet, cellphone, and to some extent the laptop have become essential parts of people’s lives. Although if you force a situation where there would be no technology people will survive, the internet and communication gadgets have become like appendages to most. They couldn’t move without these things.

The characteristics of the population

As has been discussed, even if people have basic needs, their preferences still play an important factor. It could depend on their age, gender, ethnicity, income, and several other characteristics.

If the place where you are opening your business has a young population, they would most likely not prioritize food supplements. They would be at the prime of their health after all. It would be a different matter if you had more elderly people around. It also matters if the population can buy your products. What are the most common occupations? How much do they earn? If you plan to go beyond the essential goods, this is more important. How much of their earnings would they be willing to spend on non-essential stuff?

Other than the statistics you would get from looking at the population’s demography, you should also look into the traditions and values that people hold. These are very crucial in their receptiveness to new products or innovations. You could also more or less infer what they would prefer. For example, if you have a population that is very conscious of animal rights, although not everyone would be vegetarian, they might prefer meat products that are grown in small organic farms instead of large ranches or poultry farms. If there is a high environmental consciousness, they might prefer biodegradable products to those made of plastic.

Consumption patterns

Another useful data you would need is the population’s consumption patterns. What do the people spend their money on? Do they spend more on food? If so, do they buy more fresh produce or canned and preserved food? Would they prefer to have a lavish home or would they spend their money more on buying high-quality food?

These may not be data that is easy to come by, but it will be beneficial. There are some free data from the government websites that you could use also for your analysis. You could use the statistics on energy consumption and the agricultural produce over the years. You could also use the statistics on tax reports. If you can’t afford yet to get direct data from your target market, you can work around them with general statistics.

The location of your venture

venture market

The location of your venture will also affect the attitude of your target market. Is it accessible to those who don’t have cars? Would it be an easy commute from their homes? Other than that, your location will also determine the options for your supplies.

Opening a business is not a walk in the park at all. It is more like walking into the battlefield. It’s not other companies that you should think about. The consumers are the people you need to conquer, and you need to have a clear strategy. And like in any war, before anything else, know your enemy.

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