Market Analysis
There have been marketplaces around the world for thousands of years. A marketplace is an actual or virtual area where goods and services are exchanged, typically for coin of the realm. Santa Fe has a marketplace, as does Baghdad. eBay is a virtual marketplace. At each, sellers present their wares — oranges, falafel, classic comic books — to buyers. If the buyer and seller agree on the price, a sale is made and products or services transfer hands.
Your business operates within one or more marketplaces, depending on the type of business. A reunion-planning service will operate within a geographic area that is convenient to those who will use the service. An Internet business sells to the world — or at least as much of the world as the product or service can be delivered to.
The following questions need to be answered in a market analysis:
What is your business's marketplace? Is it limited physically?
Is there a virtual marketplace for what you sell? Are you able to compete within it?
Your Marketplace
Before you begin selling any product or service, you must understand the marketplace in which you will be operating. Who will be buying from you? How do they buy your type of product or service? Can you make buying easier or more convenient for them?
Selecting an appropriate business from the available opportunities is critical to the success of your enterprise. In addition, choosing your marketplace is important. One location may be more convenient to your residence, but not to the majority of your potential clients. To serve your clients, you must be where they want to buy. Physical locations for businesses must be selected based on buyers' preferences.
Market Limits
All marketplaces have limits, even online markets. The limits may be linguistic, geographic, monetary, cultural, or governmental. Before developing your consulting business, you must consider its limitations.
Market limits may also be dictated by your finances. For example, your consulting service would fit perfectly in the new professional business center going in, but initial profits just won't allow you to afford the rent. However, your business's long-term plans may include a move to the mall in three to five years. If so, explain that to your investors in the market analysis section of your business plan.
Virtual Marketing
Billions of dollars in products and services are traded over the Internet every year. Online selling has made world marketers out of small, specialized businesses. For a relatively small investment, a business can join the millions of online sellers.
Therein lies the problem. There are millions of online sellers, all competing in the new virtual economy. Unless your product or service is unique and you understand the verities of online marketing, your virtual business will remain unfound by your target clients. However, if you do have unique products or services and learn to market on the Internet, it is a relatively low-cost method of setting up a profitable business.
Before you analyze your business's potential market, you must first identify that marketplace. Is it local or world-wide? Is it limited by franchise agreements or start-up costs? Is it limited by the client's language or knowledge? Is it defined by the available distribution systems?
Use the Internet as a way to help your prospective clients understand who you are and what you do. Produce a website that is a virtual brochure for your consulting services. Show visitors that you not only understand the problems they face, but also that you can offer them viable and proven solutions.
