January 20, 2011 Students: Will learn how to identify the feasibility of their business idea.

Research Your Market After you’ve decided on a business idea you need to conduct market research to determine your customers wants and needs to determine how your business can satisfy those wants and needs. You need to examine your competition’s abilities and successes. Your research will help you to determine the amount of money you can make, so you can determine the amount of money you can spend. Start by collecting general information and analyzing trends (secondary data) then you will want to get personal feedback (primary data) on your business. You can hire a professional firm to conduct market research for you, this may be too costly for a start-up business. You can do you own research, the advantage to doing it yourself is you will have firsthand knowledge of your industry and customers. You’ll need to examine currently marketplace trends. Look for specific trends in your industry.

Current Trends Technology: Technology allows us to reach markets faster and easier than ever. We can purchase products over the Internet. Cell phones offer instant communication. Fax machines, copiers, and voice mail systems are standard office equipment. Teleconferencing allows us to conduct meetings without leaving the office. However, all of these new technologies need explanation, service, and repair. International Commerce: International trade has opened many opportunities for small business. Aging Boomers: The baby-boomer generation account for one-third of the country’s population and 50% of total consumer spending. This group will have more money than any other to invest and spend on second homes, fancy cars, cutting-edge computer hardware and software, entertainment technology, and travel. They are health conscious. Marketing campaigns aimed at this group always stress a youthful outlook on life; talking to them as older people is sure to lose them! Growing Youth Market: In 2008 the number of babies born in the US was 4.3 million, surpassing the record high set at the peak of the baby boom, by 2020 this is projected to surpass 5 million per year. This indicates an explosion in children’s markets: toys, games, clothing, day care, sports, and other extracurricular activities. Ethnic Diversity: Younger generations are more racially and ethnically diverse. The Hispanic population of the US will double by 2020.

Find Your Target Market Target markets are those individuals or groups most likely to become your customers. They have common characteristics and needs that your business will be able to satisfy. Your goal is to develop a demographic and psychographic profile of your customers.

Demographic vs. Psychographic Demographics refers to the statistical information such as age, sex, ethnic background, education, occupation, income family status, geographic location, and population distribution. Psychographic are the psychological characteristics of your market, these are just as important as demographics and give insight into why people buy certain products or services. – Lifestyle: a person’s manner of living – Personal behavior: tied to personal values – Self-concept: how we see ourselves and hope to be seen by others – Buying style: what is the reason people make purchases

Collecting Data Secondary Data: You can access reports published by federal, state, and local governments, business directories, independent market research firms, associations, and the census. You might also consider media kits from radio, television, newspapers, and magazines, and articles in magazines and trade journals. – Competition: Make a list of your competitors and a list of questions you want answered. Direct competition are businesses offering the same product or service to the same market through the same distribution channels. Primary Data: After you’ve analyzed your secondary data you will want to look at this more closely as it relates to your business. You will need to talk to people firsthand. You may consider attending trade shows or conferences to attract potential customers and give you ideas of customer demand. Talking to suppliers and vendors can also provide you with customer information. You may even test market some samples of your product or provide your services for free in exchange for testimonials. – Questionnaires: The most-used and most cost-effective method of gathering information on your target market is through the use of questionnaires.

Questionnaire A well-designed questionnaire can gather data covering four main areas: 1.Interest in your product or service. Include questions aimed at determining a need for your product or service. 2.Demographics. Questions can be structured to show you what kind of people your prospects are. 3.The means for reaching your market. Ask questions to determine how you can reach your customers. 4.The competition. Ask questions about your competition that can show you ways in which your company can be unique and can benefit the customer.

Assignment Create a 200 word short answer essay identifying: What must you first know and understand (and research into if you don’t already) to determine if a business idea is feasible? What resources could you use to research and gather important decision-making information?