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Feasibility Study Lesson 2 – How to Write a Market Feasibility Study
Part 2 - Market Analysis and Research; Identifying Your Business Competition

By Lahle Wolfe, About.com Guide

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(Continued from Page 1)

Feasibility Study Course Index - List of All Lessons

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Analyzing Your Current Market

This section of a market feasibility study describes the current market for your product or service. If you are offering something so unique that there are few market statistics, you can either use related industry information, or even conduct your own independent study.

Several ways to conduct your own research for new ideas include: polling Internet forums, questionnaires addressed to targeted consumer groups or the general population, or even customer surveys.

Any “proof” you have that there is a demand (or market) for your product or services will help you sell your idea. This is particularly important if you are marketing something unique,or within a very small, specialized market. You need to show that your ideas is novel because you have found a niche and not because there is no existing market for the idea.

A good source for finding out what is selling (and what is not) is the Department of Labor. Industries showing employee growth is often a good indicator of an industry’s overall stability. Massive layoffs or few employer or employees, indicates fewer business opportunities.

Where there is demand for something, there should be correlating growth in employment, the number of new companies being formed, or in the industry’s overall combined revenue.

Articles Related to Market Research

Anticipated Future Market (Based on Industry Trends)

This section should include a narrative description, as well as attached spreadsheets, graphs, or tables to showing trends, statistics, or projections.

There are no sure-fire ways to tell if an industry will have measurable growth in the future, but you can make logical and reasonable predictions based on trends, past growth, and current markets.

Use Facts, Not Fiction: It is critical in this section that your projections are fact-based as much as possible. Any business takes risks; the key is to minimize those risks is by carefully studying already successful businesses. Rather than target just the entire industry, try to isolate similar businesses and study what they are doing, how they are doing it, and their financial track record.

Visit Your Competitors Websites: You can obtain a lot of information just from visiting company websites and looking over product lines. Look for discontinued products or services and high-priced items. Somewhere in between these two things are probably the most stable long-term items. Discontinued means consumers are no longer demanding the product, while high-priced items may indicate a fad.

Look at Big Companies Strategies: Since big companies spend big bucks on market research, take advantage of their money spent and public information. For example, if you are trying to crack the pet market, look at PetSmart and Petco. What new product lines or services are they offering? Chances are good that they spent millions researching industry trends to develop new product ideas.

Study Press Releases:Look for press releases about businesses in your industry. Press releases are an advertisement, but they also often tell why a company is branching out, closing a division, or change its product line. They have already done the research for you so do not hesitate to take clues from other businesses.