How to conduct market research
Much of market research is straight forward common sense. You need to know if your product is going to work, whether the right people are out there, if they will find you, or whether there is something about to happen that could ruin your new business.
It's about getting out and about in the area of your new business and finding out as much as possible about the area. It's also about looking at what other hospitality businesses do and why.
Decide who your target market is
Look at what the demand is in your area from your target market for the type of service you offer. This can be difficult if you're proposing something unusual, but there will be indications of whether your target market is likely to find and use you. For example, what are the demographics of the people living nearby - are they wealthy, middle income, or mostly existing on benefits?
Ask the estate agents in the area what kind of people live locally. What other shops, restaurants, hotels are nearby? What market do they appeal to? Is it the same as yours?
Ask the tourist board who visits the area, what time of year they come and what they do when they are here. They may also be able to tell you how long they visit for and where they stay for example self-catering, bed and breakfast, hotels etc.
If you find somewhere that seems to be perfect for your target market but it isn't busy or has little custom, learn from that too- maybe your market isn't in this area.
Check with the planning authorities to see if there are plans for new roads or developments that could either harm or help your business. Is there a new tourist attraction in the offing that could bring your target market to the area? What other new businesses are planned? Are they likely to attract your target market as well? There's strength in numbers and a whole street of shops/restaurants/pubs/hotels that attract a similar market is likely to do well for everyone.
It may sound corny but don't ignore things like the psychology of colour and lighting. Big hospitality companies spend a lot of money researching this sort of thing, so look at what they've done and learn from it.
Red is known to stimulate the appetite while blue tones suppress it - all the old-fashioned steakhouses had red walls. All Bar One was one of the first pubs to be known as female friendly. Why? Because it opened its pubs up with windows, allowing women to see in and know who was inside before opening the door.
Look at what other hospitality businesses, like yours, do. Will your product offer punters a new choice to what's already available? Are you filling a gap in the market by being cheaper or more expensive or offering something that's currently unavailable?
The more information you can gather before you make a final decision to purchase a property or start a business in a specific area, the better informed your decision will be. It could also help you secure financing if you can show prospective investors your research results.
