Now that you know who your customers are, you need to find out if they're currently buying the product or service that you'll be trying to sell them and where they're finding it. That means figuring out who your competitors will be and analyzing whether they're targeting the customers that you want to target. You want to assess what your competitors are offering, how they're offering it, and what they're charging for it. How are they differentiating themselves from their competitors? (They might be advertising the lowest price, for example, or the finest service.) If many of your customers will be in your local geographic area, you can check your phone directories to look for listings of businesses that might be similar to yours.

Of course, the Internet is one of the best sources for competitor information. Figure out which keywords best describe your product and service and type them into a search engine. First, check out the businesses that come up in either your geographic or business area; then look at some that might not seem applicable at first — you might find great ideas for your local customers by adapting an idea that a small business might be using on the other side of the country or even the other side of the world.

It may also be worth speaking discreetly to your contacts around the marketplace; they can often provide insight into why certain companies are successful and why others are stumbling. Choose your conversations carefully, however. It may not be to your advantage to reveal too much about the business that you want to launch before you're ready to reach out to your customers.