New data is often better data

       All other factors being equal, the best data is the newest. A great deal can happen in even a few years, so it’s generally better to present data from the last year or two, if you can find it. Some exceptions exist, though. U.S. Census data is considered to be useful and authoritative, yet it often lags a few years because such a large amount of data is collected and analyzed.

       TIPS FOR FINDING MARKET INFORMATION

      1. A great place to start looking for target market data is one of the U.S. Census Bureau’s websites. Start at www.census.gov. Refer to Chapter 20 on pages 483–500 for other research resources.

      2. The most detailed insights about target markets are often compiled by private research firms. Their data can be expensive to acquire, though some resources are available free through many college or university libraries.

      3. If your target market consists of businesses in a specific industry, you can usually gather a good deal of information from the trade association serving that industry. For instance, if you sell commercial kitchen equipment, your target market may be restaurants, and you can find information about the number and growth rate of restaurants at the National Restaurant Association’s website.

      4. If your target market consists of individuals with specific demographic characteristics, such as members of a particular ethnic group or religion, you can often find associations serving that group. If your market consists of consumers with specific interests or hobbies, such as gardening or travel, you can typically find associations serving those consumers, as well. These social organizations often have access to statistics about the size and growth rate of their constituents.

      5. Many media outlets (including magazines, newspapers, and radio and television stations) that serve a specific market offer details about their target markets in their information for advertisers. Check their websites.

      6. Try talking to people in the same industry or business as yours in a different city; they’re an excellent source of information. In addition, large banks and universities frequently maintain information about the health of the local economy and particular industries. They are a good and reasonably reliable source of future-growth forecasts. Don’t overlook real estate agents, as they often have more up-to-date information about neighborhood trends at their fingertips than any other source.

      7. Sometimes you can even talk to your competitors. In many industries and professions, and in instances where there’s more work than the market can handle, your competitors may be willing to talk with you directly.

       See pages 63 and 69

      8. Suppliers, distributors, and independent sales representatives can give you a great deal of information about industry trends and what your competition is doing, without violating confidentiality. Because they’re in touch with the market, they know which products and services are in demand.

       Forms of competition

       Competition comes in the following forms:

      ■ DIRECT COMPETITION: Companies most like yours

      ■ LARGE COMPETITION: The Walmarts and the Home Depots

      ■ ONLINE COMPETITION: Online sellers that may operate from anywhere in the world

      ■ INDIRECT COMPETITION: Other products and services your customers may buy instead of yours

      ■ FUTURE COMPETITION: Competitors that may enter the marketplace in the future.

       When researching your competition, you’ll focus mostly on your direct competitors.

Competition and company

      Conducting research about individual companies offers you many benefits, from identifying your biggest or toughest competitors to determining whether a potential customer is creditworthy. If you seek funding for a business, prospective investors will certainly want to know about the health and performance of your major competitors.

      Finding information about specific companies can often be difficult; after all, they don’t necessarily want their competitors to know what they’re up to. Nevertheless, quite a bit of data is available on publicly traded companies (that is, businesses that sell their stock on a public stock exchange). In the United States, such companies are required by law to regularly disclose financial information to the Securities and Exchange Commission.

      As well, investment analysts track publicly traded companies for their investor clients, and you can access many of their reports on some of the databases listed in this book. These companies are usually of interest to the financial press, too, and you can also find articles about their performance in media archives.

      While locating information about private and smaller companies is more difficult, it’s not impossible. Often you can collect information from industry publications and associations, local media in a company’s home community, research firms such as Dun & Bradstreet, and even a company’s own websites or customers. Be sure to refer to Chapter 20 on pages 483–500 for other research resources.

      FINDING COMPANY DATA HELPS YOU

      Learn which products and services a company offers and, often, how much they charge.

      Estimate the revenues and profits of a company,

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