A family friend wanted to open a doggy day care and asked for my advice. The first two things I asked: How crowded is the market, and how profitable is the competition? If they’re booked solid for weeks to come, then she could expect some overflow to come her way. If they’re hurting, she could expect the same—unless she was offering something dog owners wanted and the competition couldn’t deliver. It doesn’t matter if you’re shampooing schnauzers, designing dream homes, or wholesaling widgets, you’ll never repeal the law of supply and demand.
Back in the day, I flew to strong tire retailers on each coast to check out what worked and what didn’t. Mixing in their best ideas with mine got us off to a fast start. Today, scour the competition’s Web sites. Google them and explore every link. Track and compare their pricing. If they’re retailers, buy something. What are they doing to attract customers? What’s their secret sauce? What would you do differently? Where are they vulnerable, and how can you capitalize on that? Rack up some frequent flier miles visiting successful businesses in your space, outside your geographic market. They’re less threatened and more open. Buy lunch for owners, and dip into your wallet for consulting fees if need be.
Probe the pros
Draw up a list of questions; then interview ten to fifteen professionals in your industry. Even if you don’t personally know them, explain what you’re doing and that you’d appreciate their candid comments. Some will blow you off. Most will be happy to give you ten to fifteen minutes. Ask them to poke holes in your plan. The point is to find and plug holes now so pressure down the road doesn’t cause a blowout.
Trek to trade shows
Turning up at trade shows is the fastest way to learn industry logistics and build relationships with the movers and shakers you need to be moving and shaking with. Dress smart, find that easy smile. You can’t help but literally bump into vendors, manufacturers, and distributors. Now’s your chance. Be confident and cordial. Shake hands, build rapport, ask questions, explain your business (in fifteen seconds or less!), and collect business cards. Ask everyone you meet to recommend others who’re in position to help. When you get home, reconnect with your contacts via phone calls and e-mails as questions arise. Caveat: Treat each contact with care. They’re busy people. Undercontact them and they forget you; over-contact them and you’re a pest.
Tap into your shoppers’ heads. Ask friends and family about their experiences and expectations when they shop for whatever you plan to sell. To go deeper, bust out the chocolates, or beer, and gather a series of focus groups with five or six people (weight for race, age, and gender). That’ll net you qualitative research—info that’s deep and narrow. For quantitative research data that’s wide and shallow hire a survey firm and develop some good questions.
Market- research firms elevate your efforts with both off-the- shelf and customized Intel. Don’t start your business or expand without a sharp snapshot of the size and demographics of your target market. I’m talking beyond the obvious (age, gender, income, education). You need data points like buyers’ occupations, interests, opinions, and habits. Fact-finding missions like this may dent your bank account some, but your data- directed course correction will pay for itself, and then some.