Ask the Business Reference Librarian!
Q: I have been told that as a part of my Business Plan I need to have a section that addresses my market. It sounds to me like I need to do some market research on the geographic area where I will be starting my business. I have never done anything like this before…where do I start?
A: This is a great question that I often get asked! The process of doing market research can be lengthy and involved. Of course it helps to have access to the right tools and to know what steps to take to get the most out of your market research. Below are a few guidelines to help get you started.
Some basic questions that you will need to answer concerning your industry are:
In what geographic area will I be operating my business?
How many competitors are in this geographic area?
What are my competitors approximate sales?
Who are my potential customers? In other words, what type of people live in this geographic area? Some considerations include:
– Gender
– Ages
– Race/ Ethnic backgrounds
– Amount of household income
What other types of businesses are in this geographic area?
Answers to these questions are actually quite easy to find if you know where to look! Let’s examine the tools you would use to help find these answers.
In what geographic area will I be operating my business?
If you’ve spent any amount of time thinking about starting your business you probably already have a good idea where you’d like to locate. However, the information you gather for the remainder of these questions may show you that the geographic area you’ve selected is not the most ideal for starting your type of business. Be aware that you may have to reconsider other geographic locations, depending on what you find.
How many competitors are in this geographic area and what are their approximate sales?
There are a number of tools you can consult to determine this. I would recommend looking at two to three different resources to get a really good feel for how many competitors you can expect. Various publishers report data
differently.
Resource 1: ReferenceUSA. Published by InfoUSA, this is a database to which the library subscribes. Essentially it is a large electronic phone directory containing information on residences and businesses. Let’s say you would like to open a jewelry store in Lansing. You can construct a search to find out how many jewelry stores are in the Lansing area. If you would like to be especially particular, you can even narrow your search by zip code. Each entry in should contain either an approximate sales figure or a sales range. Not only is this database available in the library, it also is available outside the library to Capital Area District Library card holders who live in our service area. Visit
this link to explore the database: http://www.cadl.org/databases/ and then look
under “Telephone Directories”.
Resource 2: 2003-2004 Michigan Business Directory. This is a two volume set
located in the Business Reference section of the library. The call number is R
380.1025 Michigan. This resource contains a listing of businesses in Michigan.
You can search by city or by industry. It will give you an address, phone, an
approximation of the number of employees that work at each company and a few
other details.
Resource 3: Dun & Bradstreet Regional Business Directory, 2006. This is a three volume set located behind the Reference desk at the library. The call number is R 338.74 D&B. This resource is similar to the Michigan Business Directory
however it is not as inclusive – the metro Detroit area is not included in these
volumes. Dun & Bradstreet provides credit rating information for businesses as
well as other types of directory information. Each company listed in their
directories is given a DUNS number. This is a “data universal numbering system”
and is used to help keep track of companies for data processing purposes. In addition to regular directory information, you also will have access to a company’s sales figure, the number of employees, the name of the owner/ president/ manager and the number of years the company has been in business.
Who are my potential customers?
The U.S. Census offers a wealth of information about our population. Visit
http://factfinder.census.gov to obtain the demographic information for the area in which you are interested. Enter the city and state or a zip code and you will be presented with more information than you could possibly want!
What other types of businesses are in this geographic area?
By using some of the tools previously mentioned you should be able to answer this question. ReferenceUSA will be the quickest and easiest way to get a
handle on the other types of businesses in your area but the other two print resources also contain this information.
Looking at examples of other business plans also may help you in determining what types of information you would like to include in your market research.
The Business Plans Handbook is a very helpful tool for this and can be found in the Business Reference section of the library. It is a ten volume set and contains examples of actual business plans that were used to obtain funding.
Lastly, it is important to remember that finding the answers to these questions is just the basic information that you will need. As you move along in your market research process, you may discover that you require more information.
Don’t hesitate to ask me or any of the reference librarians at the Capital Area District Library for assistance in locating additional resources.
Elizabeth (Liz) Kudwa is the Business Reference Librarian at the Capital Area District Library located at 401 S. Capitol Avenue, Lansing, MI 48933. Contact her at 517-334-1522 or by e-mail at kudwae@cadl.org.
