If you’re about to put large amounts of money into a new business, it pays to do some research first. Understanding the right numbers is an important part of this.
Here’s how to define your market and the competition, with tips on how to use stats.
Before you start researching your market, you need to work out what your business does — its purpose — and if it’s unique.
First, define the product or service you’re offering then ask:
The answer to these questions informs the start of your research into your market and competition.
There are free tools you can use to build a detailed picture of your market and competition — the more detailed the better. The results can also be useful to show potential investors or financial institutions that you’re a good business to invest in.
Statistics New Zealand’s Data for business (external link) website is a good place to start your research, with a wealth of detailed data on different industries, regions and potential customers.
Knowing who’ll buy your products or services — and why — is crucial for your planning. This applies to domestic and overseas markets.
You need to:
Stats NZ’s Market Mapper (external link) tool can help you find your customers by:
How much market information is available can depend on the industry you’re in, eg trade associations often provide members with up-to-date data for their specific markets.
Banks also produce research that you can access freely — though it’s often general information about the economy and small businesses.
Find out what advantages competitors have over the business you’re planning, and examine their pricing and marketing strategies.
Try to find out:
If you can’t find the data you’re after for free, you can pay for more detailed research, including: