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Steve Windhaus Ask the Small Biz Adviser

Good, free places for startup market research

Dear Small Biz Adviser:
I want to open a small business selling bath and body products, such as natural soaps, unique-looking soaps, aromatherapy products, lingerie, accessories and educational products for women and men. Where do I start? I tried the Internet but I can't come up with the data I need, like market research, etc.

I don't see an enormous amount of bath and body specialty stores on the Net, except for two big national brands. Please help me! Where should I begin? I don't much collateral to finance the business just a dream and goals, please help me make these dreams and goals become a reality. Could this happen?
Thank you.
Cheryl

Dear Cheryl:
Yours is a typical obstacle encountered by startups -- finding relevant market research data. In my business, which specialized in business planning for startups, the market research element is most daunting. Fortunately, in only one case we were forced to purchase the data. In another case, the type of business venture was so new that market data did not exist. On all other occasions we were able to identify sufficient, readily available and free sources of relevant data on which to make substantive financial projections and envision the level of operations required to successfully operate the venture at projected market shares garnered.

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To begin, it is important to define the geographic target market in which you intend to compete. Always, it is easier to find national data trends than local competitors' performance by market share, financial performance and successful product lines. But there are steps you can take.

Associations related to types of business enterprises tend to survey their membership on various types of performance related to marketing and sales. The data are them compiled and shared with the membership. Many will not share the data with you until becoming an association member. It can be a good idea to join a lot of associations -- you get the data, plus the new relationships and an enhanced image for your company through those relationship.

Trade magazines undeniably offer an excellent, alternative source of data. The Internet can be an overwhelming source of data. However, it depends on the type of data you want, and the source of that online data. I am very careful to note the source. If the Web site does not list the source of its data and claims, and the representatives of that Web site are not known to be reputable, I will not consider the content. Often, a company will make claims merely to enhance its image and provoke purchasing its products and services.

The Bureau of the Census' economic data gives a wealth of information on businesses at national, state and county levels. Online you can secure the 1992 and 1997 results. They are issued every 5 years. For the data prior to 1992. you can go to most any good library for paper copies.

Though often ignored, the local Yellow Pages for the past three or four years provide a valuable look into the growth trends of local markets. Many libraries will keep back issues of the Yellow Pages. Go to the relevant section and note the following:

  • Increase and decline in the number of businesses.
  • Locations of the businesses.
  • Who is and isn't placing large ads in the book.
  • Any other trends, such as the inclusion of Web site addresses and e-mail addresses, from one year to the next.

Personal observations should never be ignored. Many startups will post themselves in the neighborhoods of their competitors for two to three weeks to observe:

  • Types of customers by age, gender and any other noteworthy characteristics.
  • When customers most often visit the store by day of the week and time of the day.
  • Where customers come from like nearby neighborhoods and other businesses in the area, or from outside the area, by bus, car or other mode of transportation.

Cheryl, your options are many. But above all, remember this -- try to find a way of standing out from the competition, be it sales, customer service and/or product. But know the ways of success. Copy the ways of successful competitors and avoid the ways of those who fail.

I wish you well.

-- Posted: Feb. 13, 2001

Bankrate.com writers base their answers on our editorial content and advice of financial professionals. We make no claims or representations about the accuracy, timeliness or completeness of such content, advice or the answers provided to you. Our content, advice and answers are intended only to assist you with your financial decisions. However, by its nature such information is broad in scope. Your financial situation is unique, and our content, advice and answers may not be appropriate for your situation. Accordingly, we recommend that you get different opinions and seek the advice of your accountant and other financial advisers before making any final decisions or implementing any financial or investment strategy.

 

Read more Small Biz Adviser stories here.
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See Also
Market research can be simple as a pad of paper and good eyes
Basics of conducting your own market survey
More Small Biz stories

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