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Free Sources of Market Data and How to use that Data for Business Planning

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Free Sources of Market Data and How to use that Data for Business Planning

By Caron_Beesley, Contributor
Published: December 20, 2012 Updated: December 20, 2012

The federal government offers many tools to help small business owners understand their markets, but where do go to find that data, and how do you use it once you’ve got your hands on it? 

First, conducting market research doesn’t always have to involve hiring a research firm or commissioning focus groups; much of the information you need may be at your fingertips.

This research can impact and inform all areas of your business, from where you locate your business to the color of your logo. Even a small amount of analysis can help you gauge the receptivity of your target market to your idea. Check out this blog for a quick overview of the type of data you can draw from these sources: Conducting Market Research? Here are 5 Official Sources of Free Data That Can Help.

But how will you use this data effectively? Here are some tips for finding data you need and translating it into information you can use in a business plan or simply to inform your strategy:

Sources of Market Data

So, where do you look?

  • Free Government Market Data – One of the best sources of data is the U.S. Census Bureau. The information there is vast, and among the easiest to navigate. Thanks to a variety of Data Access Tools such as the 2010 Census Interactive Population Map, you can pinpoint census data to the block level and compare one community to another. Census data can help you answer many questions that come up during the business planning process, such as:

o   How do we know the size of industries and businesses?

o   How can we determine the economic activity of communities large and small?

o   Where should I place a new business?

o   What products in my industry are growing?

o   What materials are purchased by my industry?

o   What industries purchase my products?

  • Competitive Data - Want to know how your business stacks up against the competition? Where your potential competitors located? The best places to advertise? These are all critical inputs for your business plan and can also support your financing applications. SBA’s new SizeUp tool lets you crunch millions of data points to get customizable reports and statistics about your business and its competition. Enter your industry, city, state and other details. The tool then runs various reports and provides maps and data related to your competition, suppliers and customers. It also highlights potential advertising opportunities.
  • Use Your Own Data – Don’t just rely on external data sources. As your business grows, use your own data to analyze consumer profiles, buying behaviors and so on.

How to Use the Data

Here are some ways you can use the data you uncover in your market research to build your business plan or inform your strategy:

  • Get to know your target market – If you are seeking investors, they will want to know that your market is sizable and that you have researched and understand its opportunities and its limitations. Is your market definable? Is it sufficiently large that you can reach it efficiently (for example, are population or demographic shifts likely to play to your advantage)? Where do your competitors fit in? Can you segment that market further? Above all, is there a niche you can carve for yourself?

As you prepare your business plan, think about providing: 1) A description of your target market, 2) the trends that impact that market and 3) strategic opportunities for your business in this market.

  • What is going on in your industry? – Few businesses are immune to industry trends. If consumer spending is down or unemployment is on the rise, this may affect your plans and your budget. Use economic indicator data to assess trends and market forces that can help you succeed. If your industry is in flux, could you use this fact to your advantage and position your business for future growth? Investors will want to see that you understand the factors that affect your business’ success. Be sure to include in your plan: 1) a description of your industry, 2) industry trends and 3) strategic opportunities in your industry.
  • Analyzing the competition – SBA’s SizeUp Tool can help you zoom in on exactly who your competitors are – use this information wisely.  Include a description of your competition in your business plan. What market share do they command? Who are their customers? What barriers to entry do they represent for your business? What opportunities are there? The SizeUp tool is very visual; consider using screen caps or charts to back up your data. Knowing your competition will help you better position yourself against them and reach your target market more effectively.

Bonus Tip: use SBA’s Build a Business Plan tool to help guide you through the process of creating a basic, downloadable business plan

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About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

thanks for sharing use the information uncover in market place research to create pur enterprise plan,I have you bookmarked to check out new stuff you post. Keep sharing.
A very resourceful article for small entrepreneurs. It is very difficult to find the sources and their right implementations. Thanks for sharing this very informative post.
Great tools. But, the best data you can gather is to contact your customers and find out what they want, if they love your product or service and feedback on how it can be better. In the end, you have a business to satisfy needs and solve problems of your customers.
This is a very useful post in starting a small scale business in local setting. But, does this covers online business as well? Do the government have that pertinent data to answer the listed questions above? If there is, I would like to where and how I can get it. Thanks much.
This is a great resource for new and continuing businesses. It is extremely important to use data to get to know your customer base, as it will allow you to better target your marketing efforts towards your niche market.
Thank you for sharing these resources, they are extremely helpful for people looking to get their business started. If you currently possess enough followers in your Social Media circles, you can also use their comments as free market research data to find out what they think about your products/services.
It also might be good to get onto Google, Yahoo and Bing maps and search for barber shops locally, to see how many are in your immediate area. Then call them and ask about pricing. Look especially for one that might be more like yours, in a home, and spend a morning or an afternoon sitting somewhere comfortably where you can see people going in and out, to get a better idea about the volume of customers.
Very helpful resources. Sometimes as a business owner you forget the resources that's out there for you.
In this regard i would like to add that now face book is also selling data to the web site owners regarding there likes and preferences on the social media sites and thus serving as data bank for the business owners who get to know there prime customers or potential targets locations.
Another good source we can take a look is google keyword tool. Through that, we will partly know how big of the market and also the competitor.Thank for nice post!

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