How To Do A Proper Market Analysis For Your Startup
Before you even start a business, it's important you spend some time researching the market to understand its ins and outs. This will put you in a position to formulate a proper strategy that ensures your business can survive in a highly competitive environment. A market analysis is also vital to figuring out the best way to serve your customers.
As an aspiring entrepreneur, conducting a proper market analysis might seem daunting. However, it's actually simpler than you might think.
Here's a guide on how you should do a proper market analysis for your startup:
What's A Market Analysis?
A market analysis is a detailed quantitative and qualitative assessment of the prevailing market conditions in a particular industry. The main objective of the market analysis is to examine the different market dynamics to get the answer to questions such as;
· Who are your potential customers?
· How big is your target market?
· What are your customers’ buying habits?
· Who's the competition?
· What are your competitor's strengths and weaknesses?
Answering these questions will give you a much better grasp of the market conditions and your prospective customers. If you need any help, you should visit infinigrow.com or other similar websites to get help from professionals.
How Do You Conduct an Exhaustive Market Analysis?
Conducting a market analysis isn't complicated, but you have to spend some time researching thoroughly. Here are the steps you should follow during this process;
1. Determine Your Purpose
Start by finding out the real reason for conducting a market analysis. Some of the reasons include creating opportunities, assessing business threats, and minimizing problems. It's crucial you know this right from the start because it helps stay on track the whole time.
You'll need to determine if the market analysis is meant for internal or external purposes. Internal purposes include business operations and improved cash flow while external purposes can be to request a business loan. Knowing the exact purpose is what will decide the amount and research you'll need to do.
2. Research Your Industry
The next thing you should do is carry out in-depth research of your industry to understand it better and gauge the direction it's heading. You must always do this regardless of whether you're starting a large or small company. A comprehensive market research, will help you identify several essential industry metrics such as;
· Projected growth rates
· Prospective customer demographics
· The market size in various locations
· The industry's major trends
You should frequently conduct market research to see whether investing your time and money in the industry is worthwhile. If so, the comprehensive market analysis will also help you identify the competitive advantage you have over your competitors that you can offer to your target market.
3. Pinpoint Your Target Market
One fact you'll need to accept when starting your business is that your products or services won't appeal to everyone. You shouldn't waste your time and effort trying to convince uninterested parties to buy your products or services. Instead, you need to identify your potential customers. This part of the process is known as target market analysis.
To know your target customers, their expected buying habits, and how many of them are out there, you need to assess factors such as;
- · Gender
- · Age
- · Education level
- · Income
- · Occupation
- · Location
- · Needs and interests
Factoring in all of these will help you design the ideal customer persona. In most cases, you'll have different personas that you should use this to help you pinpoint your typical customer. Once you do this, you'll be able to efficiently and easily cater to the needs of your potential customers.
4. Research Your Competitors
Your market analysis won't be complete if you don't take time to examine your competitors, and this includes;
- · Their main objectives
- · Their strengths and weaknesses
- · Their market saturation
- · How they differ from you
- · Their marketing strategies
You should also write down a list of your competitors and rank them based on their strengths and weaknesses. You can get most of this information from news and media sources, as well as your competitors’ physical store locations, websites, and social media pages. With all this in mind, you'll know how to differentiate your startup from the rest by filling any gaps left by your competitors.
5. Predict Your Market Share
The final step when doing a market analysis is to create a prediction of your prospective market share. This entails determining the percentage of the market you'll have in your control. Using this, you'll be able to figure out your projected revenue, pricing structure, and whether you need to get a business loan.
Takeaway
The goal of market analysis is to know everything possible about the industry you're planning to enter. This might sound somewhat intimidating for first-time entrepreneurs, but it doesn't have to be that way with the help of this guide.
