Based upon your personal niche and the type and style of business that has been determined as your best fit, we must determine:

1. What kinds of products or services your preferred market supports?
2. What customers like about this product or service?
3. What seems to entice them to buy this product or service?
4. What emotional aspects influence their purchases?
5. How much discretionary income is available for these purchases?
6. Who is the actual decision-maker for this kind of purchase (husband or wife if personal, title-position if business)?
7. Who are the competitors in this market?
8. What do the customers like about the competitor's product or service?
9. What kinds of advertising messages seem to be favored by the competition?
10. Is this product or service branded and, if so, do people generally buy by brand?

This, of course, is called market research. There are firms and individual consultants, as well as online market research companies, who specialize in market research. The cost is usually well beyond what a small business startup can afford but the effort is vital to success. We have found over the years that the U.S. Department of Commerce has answers to most of these questions. It just requires knowing where to look. Once the information has been obtained it is a simple matter of mathematically determining probability of success in each of the markets under consideration.

Relationship of Market to Start-up Costs

In addition to all of the above, startup cost must also be considered.

1. What is the probable cost of acquiring the necessary initial stock (if a product)?
2. What is the probable cost of undergoing the necessary training to be successful in this business?
3. What is the probable cost of the required tools and facilities?
4. Can the above costs be accommodated without negatively impacting initial operations?
5. How long is it expected to take before revenue matches outgo?
6. Is there a source of additional funding if needed in an emergency?

Frequently, when weighing the determined personal niche and the type and style of business against the results of market definition and financial investment requirements, a compromise is required. In any case, the determination reached is undoubtedly the best fit to ensure success of your new business.

Determining the Market's Potential . . .