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Do You Need To Do Market Research For Your New Business?

It may be that you have a great idea for a new business and you are absolutely sure that it is going to be successful.  While this may be very true it is most important that you go through a market research to back up your suspicions.

What market research will do for you is help you gather all of the data that you need to know about your potential customers as well as any competition that you may be facing.  What you need to know is how people are going to react to your new business and this is what market research will help you determine.

This may feel like this is something a bit beyond your reach as your desire is to start just a small  personal business to begin with and learn as you go.  You probably don’t realize it but if you have started to talk to individuals about your new business then you are already starting your market research. You may have gone around it to similar type businesses and started to check out what their prices are like and this is part of market research.

There are many different ways that you can go about doing your research but in order to do this you first have to realize the importance of it. You have got a lot of decisions to make regarding your business and your market research can help you do this.

The first thing you want to do if you are selling a product or service is a really determine what your potential clients will want and what they will need.   Then you are going to have to look at setting the price for what you’re offering and you simply cannot go about this the just by undercutting your competitors.   This will be a factor but you also have to look at the profit margins and what it is going to cost you to bring your product to market or your service.   Then you have to determine by knowing your target market well what are they going to be willing to pay for what you have to offer?

The next thing you have to determine is how you are going to distribute what you have to offer. You have to decide if it’s going to be resale or wholesale or whether you’re going to work online only and it to some degree this applies to service offerings as well.

Then you have to find out when you’re doing your market research what is the best type of promotion to utilize for this. This will determine where you are going to do your advertising and marketing and being as these can be expensive endeavors you really want to keep your cost down, and this is what your market research is going to help you do.

Your market research is first going to help you understand what your customer’s wants and needs are. You have to learn how to profile your customers, which means that you need to know where they are located, what the age of your potential clients is, their gender, and maybe even their income level depending on what you’re offering.   This way you will be able to save a lot of money when you are setting up your marketing tactics. It will also help you find the best location if you are setting up a on land business.

It will give you the chance to recognize if you need to change the type of product or service you are offering according to the demand.  It will allow you to know what your competition is doing and what you can do better to put you ahead of them.   It will also help you to identify any risks that may be present or weaknesses in your potential business plan that you need to address now or keep an eye on in the future. Your market research is going to play an very important role in the development of your business plan and all of the different segments that your planning entails.

 

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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