Thursday, March 25, 2010

Researching your target market

In the wake of my Financial Post column this week urging startup entrepreneurs to do more market research, I got an email the other day from a Winnipeg baker asking where to find relevant information for his planned bakery/pastry business.

Here's what I told him:

Hi, William (not his real name): I suggest you start with your local library's reference librarian. He or she will know what kind of market data their library has (or has access to), and they may be able to make other suggestions as well. Your local economic development office may also have useful data.

You can also do a lot of vital market research yourself. Hold a focus group (call it a party) and serve some pastries. Document everything: which product do they like best? What do they like about it? What do they dislike? How much would they pay for a slice or a full cake? How often would they buy it? Why would they buy it?

If you are going to sell through distributors, get out and talk to them. What are the margins in your market, who are the competitors, how do the distributors/retailers think you should market your product? Listen carefully for resistance, suggestions, and anecdotes about similar products or initiatives and how they worked out.

I also suggest you find a startup group in your area. can help you find small-biz groups in your area. Groups like these can be very useful in helping you uncover unexpected problems and obstacles in your business - and people in these groups may have found solutions to problems you are having now. My mantra is, successful wolves hunt in packs; lone wolves die alone in the cold and the dark.

Good luck!

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