The Value of Research Find out who comprises your target market before opening your doors.
Before you decide to buy a franchise, you need to determine the extent of the demand for its products or services. By systematically collecting, analyzing and interpreting market data, you can uncover key trends; form a better understanding of the franchise's market, customers and competitors, and make an educated decision about whether to purchase it. Those insights can help you answer questions such as the following:
- Who are my potential customers?
- Where do they live?
- How often do they buy the products or services the franchise offers?
- What styles, colors or flavors do they prefer?
- Why do or don't they currently buy from the franchise?
- How do the strengths of the product or service match their needs and wants?
- What hours do they prefer to shop?
- What advertising and media are likely to reach them?
If the research shows that demand is sufficient to support your prospective franchise, you can use the results to help find an ideal location and develop a start-up-marketing plan. Investing in market research before you buy will also help you organize information for prospective lenders.
And if your research reveals that customer demand for a franchised product or service is declining or non-existent, you'll avoid making an expensive, heartbreaking mistake.
Excerpted from Franchising 101, edited by Ann Dugan (Dearborn Trade Publishing)
