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HOw to conduct market research for service oriented businesses?
Question:
Hello, My name is Mineh Ishida and I am currently attempting to create a computer services business. I am thinking of incorporating with an associate as a LLC and need to conduct market research. My problem comes from the fact that I haven’t the slightest idea how to conduct research on the market for my services. I’ve scoured the web only to find that the majority of market research information is for tangible products. I have yet to find a good wayt to conduct research for people who need computer repair / Network consulting services in an objective fashion, since I do the work myself. If anyone has any tips or ideas please share! Thank you all for your time. Mineh Ishida
Response:
go to local college,find a marketing major,ask for help or step1: how many people in your service area? 2:how many businesses ? 3:how many computer service shops in your service area? 4:whats average hrly cost of repair service? 5:how long service takes? come back with these general figures,than we can help you more : )) – Hide quoted text — Show quoted text – > Hello, > My name is Mineh Ishida and I am currently attempting to create a > computer services business. I am thinking of incorporating with an > associate as a LLC and need to conduct market research. > My problem comes from the fact that I haven’t the slightest idea how > to conduct research on the market for my services. I’ve scoured the > web only to find that the majority of market research information is > for tangible products. I have yet to find a good wayt to conduct > research for people who need computer repair / Network consulting > services in an objective fashion, since I do the work myself. > If anyone has any tips or ideas please share! Thank you all for your > time. > Mineh Ishida
Response:
"Mineh Ishida" wrote I have yet to find a good wayt to conduct research for people who need computer repair / Network consulting services in an objective fashion, since I do the work myself. Research is like everything else in business – what are you trying to accomplish? If you are trying to decide if your local area can support your business, then arlmo’s advice is good. How big is the potential market, what are prevailing prices? Grind those together with your resources (financial and other), expenses, and need for income, and you can approximate whether you can make the living you need/want to make. Add in how many of those computer service organizations went out of business in the last year as well as the growth rate (or shrinkage rate) of the potential market. If you are trying to decide to whom you will market your services, you will need to get a lot closer to the potential consumers of your services. Who’s buying the kind of service you offer? What specifically are they buying? Try looking for a trade association in your industry. True, they are not as prevalent in service as in manufacturing industries, but they are there, and they may have some national data that you can extrapolate to your local market. Unless you have significant financial resources (like enough money to support yourself and your business for one to three years, you might try looking for a very specific, very personal market. Who do you (and your potential partner) know that need the kind of services you want to offer? Do you have contacts in the local business community, the local schools, local computer organizations, local government, non-profit organizations, and so on? Will your current or past employer give you a contract to service their computers for a year? Without a source of business, referrals, and funds, it can be very expensive and very trying process to build a business from nothing. Best of luck to you. George
Response:
For some kinds of (small) business, it’s cheaper just to suck it and see. Good market research isn’t cheap, and there’s always a margin of error consisting of a) inherent statistical error, and b) the mapping of your business intentions onto the actual research that’s conducted. The smaller the scale of your research, the GREATER is the margin of error. The cost of failure might well be less than the cost of the market research it would take to show that the business isn’t going to work.
– Hide quoted text — Show quoted text -> Hello, > My name is Mineh Ishida and I am currently attempting to create a > computer services business. I am thinking of incorporating with an > associate as a LLC and need to conduct market research. > My problem comes from the fact that I haven’t the slightest idea how > to conduct research on the market for my services. I’ve scoured the > web only to find that the majority of market research information is > for tangible products. I have yet to find a good wayt to conduct > research for people who need computer repair / Network consulting > services in an objective fashion, since I do the work myself. > If anyone has any tips or ideas please share! Thank you all for your > time. > Mineh Ishida
Response:
>My name is Mineh Ishida and I am currently attempting to create a >computer services business. I am thinking of incorporating with an >associate as a LLC and need to conduct market research. >My problem comes from the fact that I haven’t the slightest idea how >to conduct research on the market for my services. I’ve scoured the >web only to find that the majority of market research information is >for tangible products. I have yet to find a good wayt to conduct >research for people who need computer repair / Network consulting >services in an objective fashion, since I do the work myself. >If anyone has any tips or ideas please share! Thank you all for your >time.
Dear Mineh, The difficulty you have experineced in trying to find a way to define the market for your business is quite understandible. This is because the service business you have described for your venture does not actually supply quantifiable goods or services a true or real market, at all. Rather, you serve what are called dependent market relationships, or circumstantial market relationships. Your network consulting, for example, is a dependent market relationship to computer networks which is a dependent market relationship to the true markets of resource sharing and communications. Therefore your market can be expressed as a subset B or consulting share of subset A or network share of the resource sharing market plus subset B of subset A of the communications market. You should be able to use secondary sources to determine this where subset A is defined by the supply, promotion and distribution components of your business plan, subset B is the incidence or installed base of networks (inlcuding growth projections) in your target audience. Then you can project a share of this based upon management assumptions. Your computer repair is a circumstantial market relationship to a dependant market relationship to a subset of all of the hundreds of markets served by computers. Therefore this market can be expressed as a probabilty or actuarial computation of the subset or installed base of computers which you would service. You may then project share, based upon management assumptions as a factor of your pre-positioning. Note that the dyanamics of a circumstantial market relationship are very different from a dependant market relationship. Circumstantial markets are governed by chance. Therefore it is important that you develop a strategy to offset or even out the randomness, as well a captiatalize on, what are largely unpredictable events. This can be done through institutional promotion (yellow pages/directory advertising, premiums, etc.) as well as assurance tactics such as service contracts where you trade off some profitablity to enhance your revenue stream in order to maintian the capability. If you are doing this for an SBA loan, for example, this form of reporting using secondary sources, plus comparables as exhibits, will satisfy your due dilligence requirments for market research. As you can see, it is actually much less daunting and costly than if you did serve a true market and had to field significant primary research. You will still need some concept testing to validate the need, but this is more as a framework for your assumptions (ie. proof of concept) than as the basis of your reporting. More important, by doing this process, you will achive an insight on how your markets work, what drives them and disclose opportunities for success. Good luck, Sherman