Lesson 3: Finding your market and using research to create a strategy
In today’s lesson, you’ll build a strategy to support your business idea.
You know what your skills, knowledge and abilities are, and you’ve started to get closer to your business idea. At this point, you may have good knowledge of what you want to do with your business.
It’s tempting to go straight into your business idea at this point. As we’ve seen with Kelly in our previous lesson, she’s great at baking, and enjoys it. She can open up a cupcake store today! But if don’t plan out your idea and carve out your niche strategically, you’ll have a much harder time finding customers.
You need the right balance of skills and strategy to grow your business. So today, we’re going to take a look at the industries and markets your business ideas fit in, and how you can make your business stand out.
Activity 1: Research your potential market
For overall market trends, you can use Google Trends in your region.
If you’re located in Australia, the Australian Bureau of Statistics (ABS) is a great place to start looking at industry and locale-specific data. If you’re based in NZ, Stats NZ is a great starting point for region specific stats.
Here's an example of ABS Australian industry statistics report:
Both of these sites also have a trends section (AU | NZ) which highlights specific opportunities for your business and growing niches. In particular, there’s a section inside Stats NZ for comparing industry.
You can also use Census data to research industries.
Here are some tips for searching with a geography structure:
IBISWorld is another way to find the biggest companies within a certain industry and statistics on market size.
Here's an example of an Australian market research report for agriculture, forestry and fishing:
Activity 2: What is your competitive advantage?
Your competitive advantage can come in all sorts of forms, including, but not limited to:
- Costs and pricing structure
- Storytelling and appeal to your niche
- Your audience and loyal customers
- Industry insights
- Your skills
- Your experience
As you read through the list, were there a few ideas that you noted down? Write your thoughts down and re-read them.
Let's check in with Kelly
Competition creates a huge challenge for her. Her competitive advantage is that she is creating modern baked goods - cupcakes and biscuits with specific messages and images that others in her generation can relate to. Other bakeries in her area are traditional and she won’t be competing with them based on their products.
If you aren’t sure what your competitive advantage is, take another look at all the worksheets you’ve filled, the industry research you’ve carried out, and feedback you’ve received. Look for trends, commonalities, and any interesting ideas that leap at you.
Highlight or write them down in a list: this list is your competitive advantage.
Activity 3: What is the market demand?
Google trends is a great way to explore what other people are searching for. Visit Google Trends for Australia or New Zealand and type a few keywords for your business idea. Scrolling through the results, you’ll be able to see how many people are searching for the exact term, which region they’re in, and similar searches they may have performed.
Here we have searched for cupcake keyword trends:
It’s best to do this over a few times for different keywords – you’re looking for consistent or rising search volume and interest over time.
To do this next exercise you’ll need to think up some keywords and phrases that your customers will be searching for.
Run Google searches on each of the phrases that relates to your area. There's some free and easy to use search tools like KWFinder or Twinword which you can use. Make sure you’ve set the correct country into the field as it defaults to 'everywhere' which isn’t helpful for what we need to do.
If there are very few results, then it’s worth seeing if your phrases are too specific. If you’re still finding the volume of searches is very low, then it’s likely too specific of an area. If your search returns are in the thousands, then people are monetising the idea and it’s a profitable area.
In the next lesson
We take a look at how you can validate your idea quickly and easily.