Market Research For Business Plan

Business By Motta Updated 7 Jul 2010 , 6:04pm by _christina_

Motta Posted 5 Jul 2010 , 3:27pm
post #1 of 23

So, I'm working on my plan. I have done some preliminary research on my own eg. checking out competitors website and in person, comparing rates, analyzing their target customer by their marketing. I feel like I will need formal and more solid research info for my business plan in order to get funding.

I'm considering hiring a market research firm. I expect it will cost about 2k. I don't think I'll regret obtaining that info.

Just wondering if anyone else used this approach? How did you get your research info for your biz plan? Did you get the funding you needed? TIA!!!

22 replies
minicuppie Posted 5 Jul 2010 , 3:43pm
post #2 of 23

Maybe ID will chime in on this thread. She has a laid back approach to business plans. Write it as you go along. IMO 2K would be better invested in classes, maybe one of Earlene's or Nick Lodge.

carmijok Posted 5 Jul 2010 , 4:04pm
post #3 of 23

If you have a University nearby that offers marketing degrees, look into having a market research plan done by the students as a project. It may not cost you anything, and it helps the students to get real world hands-on experience. Plus you'll get the information you're looking for. Are you looking to open a large commercial bakery or just a small shop? Because 2K does sound like a lot of money that would be better used for equipment and such.

robyndmy Posted 5 Jul 2010 , 4:16pm
post #4 of 23

Ya, I remember a post from last week where one caker posted that it cost her only 13k for EVERYTHING she needed to start her biz. 2k strikes me as a huge percentage of that cost, that like the others said, may be better invested elsewhere.

Motta Posted 5 Jul 2010 , 4:31pm
post #5 of 23

I'm looking to open a small custom cake bakery. I like the idea of hiring students to do the research...good idea. Thanks

I've read that most businesses fail because of 2 things: 1. poor management and 2. poor market positioning. I don't want to fail but especially if I'm going to borrow money. I don't think 2k is very high a price to pay for detailed market info. It's only my estimate - it could be lower and I'm waiting for a quote.

I'm taking courses already - got quite a few lined up this year. I also plan to hire another decorator if demand is going to be as high as I think it will be in this area. I make cakes that I don't post on here...just building my skills and portfolio. I'm on a one year time-frame to open the bakery. I have a college business diploma and a university degree.

Just wondering if anyone has paid for market research for their business plan and how it affected the outcome for funding and overall success?

CoutureCake Posted 5 Jul 2010 , 7:42pm
post #6 of 23
Quote:
Originally Posted by Motta

I've read that most businesses fail because of 2 things: 1. poor management and 2. poor market positioning. I don't want to fail but especially if I'm going to borrow money. I don't think 2k is very high a price to pay for detailed market info. It's only my estimate - it could be lower and I'm waiting for a quote. Just wondering if anyone has paid for market research for their business plan and how it affected the outcome for funding and overall success?




Never believe everything you read... Most food businesses fail because..1)Trying to copy someone else 2)owner is a baker not a businessperson 3) Underfunded in the first place/not charging enough 4) Everything else that can go wrong....

I had a whole long reply written out but it's not worth the money to hire a college student or even the marketing firm for this one because of the simple fact that they haven't been exposed to the real realities of the business world yet. If THEY write it, it is THEIR idea of what YOUR business should be, that's NOT YOUR idea of how it should be run based on the resources YOU have available... Things like inspections, state regulations/red tape, zoning laws, used vs. new equipment, what you REALLY need to approach the bank (hint: it AIN'T a good business/marketing plan...)... The key is you have to develop everything how YOU want your business to run and you need to develop your busines and marketing plan around that. Also the more you own without the bank even becoming involved in the slightest way the better off you are!!!

CoutureCake Posted 5 Jul 2010 , 7:47pm
post #7 of 23

P.S. the thing to remember also is that the bakery up the road is NOT your competition just as the big box and grocery stores in your area aren't your competition. If you're opening up business to "compete" with them you're going to lose in a hurry. If you open up your business based upon a NEED in a particular niche for your area then you're going to have a greater likelihood of success. This is why doing you YOUR business plan yourself is the way to go. There are a lot of websites out there to help with this process but you need to remember the phrase.. "To thy self be true"...

tavyheather Posted 5 Jul 2010 , 8:17pm
post #8 of 23

I'm hiring a financial advisor. He is developing a business plan and doing market research for much less than 2K...maybe he's much less b/c he's an individual? maybe check into that but even at 2K the info is invaluable.

Motta Posted 5 Jul 2010 , 9:11pm
post #9 of 23
Quote:
Originally Posted by CoutureCake

P.S. the thing to remember also is that the bakery up the road is NOT your competition just as the big box and grocery stores in your area aren't your competition. If you're opening up business to "compete" with them you're going to lose in a hurry. If you open up your business based upon a NEED in a particular niche for your area then you're going to have a greater likelihood of success. This is why doing you YOUR business plan yourself is the way to go. There are a lot of websites out there to help with this process but you need to remember the phrase.. "To thy self be true"...




Yes, I totally agree with everything you said. Thank you for reinforcing what I feel to be true. p.s. Have you ever read The Toilet Paper Entrepreneur? It's awesome and he says the same thing. Niche marketing is the way to go.

revel Posted 5 Jul 2010 , 9:12pm
post #10 of 23

we have www.womensenterprise.ca here in BC to help. I'm not sure if there's an Alberts spinoff. They have tons of help.

Motta Posted 5 Jul 2010 , 9:34pm
post #11 of 23
Quote:
Originally Posted by tavyheather

I'm hiring a financial advisor. He is developing a business plan and doing market research for much less than 2K...maybe he's much less b/c he's an individual? maybe check into that but even at 2K the info is invaluable.




Is he actually writing the business plan AND doing the market research for you? That would be sooo nice!

I might check the financial advisors around here but I do have a wonderful business plan template that makes it much easier to write one.

Jamkon Posted 6 Jul 2010 , 11:45am
post #12 of 23

Hi,

Its very good that you have already done market research and found some key information about trend, demand, growth etc.

I also approached biz plan corner, http://www.bizplancorner.com/ to write my business plan. It was very detailed and helped me a lot to understand all the aspects to set up and run my business efficiently.

You may also download some sample business plans from http://www.bizplancorner.com/samples.aspx, to have an idea.

I hope it also works for you and wish you very best of luck.

Regards,
Faisal

Motta Posted 6 Jul 2010 , 2:05pm
post #13 of 23

Thank you for the links, Revel and Faisal. I will check them out. Anything to help is appreciated. I wish someone could just give me all the numbers....sigh. icon_smile.gif

cakelady99 Posted 6 Jul 2010 , 3:24pm
post #14 of 23

Can you be more specific about the kind of information you're looking for? What you are hoping to get from a Market research firm? Not saying it's a bad idea, but it seems like the data may be easily accessible (and much less expensive) if you know where to look.

Kiddiekakes Posted 6 Jul 2010 , 3:59pm
post #15 of 23

It's too bad you can't contact some like Lori and Heather who run the very successful business in Vancouver BC called Cupcakes...There is also the successful Crave here in Calgary who is set to open their 3rd location I think..Maybe if you contacted someone they might agree to meet and have lunch to help you out but that may be a NO also since some people are not willing to share their plan etc..which in a way I understand!

Motta Posted 6 Jul 2010 , 4:04pm
post #16 of 23

I need to know why people are making their buying decisions. It's the psychology behind the decision that I'm looking for. I already know demographics like age, education and income here. There are lots of stats available thru public sources but a definitive analysis of why people choose one product over another...that's what I need. If it's price, I will adjust my price (if possible). If it's status, I will have to brand myself to meet that need - that's how I would use the information.

I haven't found a place or book to find that info. I think I know what the public wants simply by looking at current retail stores but I don't know who is actually making a profit.

CoutureCake Posted 7 Jul 2010 , 4:30am
post #17 of 23

It's called... Impulse...

People come in with an idea of what they WANT to get but when they're bombarded by the smells of delicious ooey gooey treats, sugar overpowers the brain and says "MUST HAVE COOKIE!"

Tis not reason to ask why, but how to bring about Pavlov's response in your customers... AND THAT is something that cannot be answered in a business or marketing plan..

LindaF144a Posted 7 Jul 2010 , 12:00pm
post #18 of 23
Quote:
Originally Posted by Motta

I need to know why people are making their buying decisions. It's the psychology behind the decision that I'm looking for. I already know demographics like age, education and income here. There are lots of stats available thru public sources but a definitive analysis of why people choose one product over another...that's what I need. If it's price, I will adjust my price (if possible). If it's status, I will have to brand myself to meet that need - that's how I would use the information.

I haven't found a place or book to find that info. I think I know what the public wants simply by looking at current retail stores but I don't know who is actually making a profit.




Wow! If you can figure that, you can sell just that and be a billionaire! I think that is the question of the day seeing how we are a fickle bunch. I have read recently where they are saying that cupcakes are on their way out. How they are figuring this I have no idea, seeing how you still see photos of people waiting outside the door for the cupcakes. And one article read that bagels are no longer hot like they were 15 years ago. Hello? Have they been to my neighborhood lately? There is always a line at our local bagel place. Now granted in HI I couldn't find a bagel place anywhere (we threatened to move and open one - any excuse to move to HI I guess!)

Take you best guess for your area. Go sit in a bakery or coffee shop and see what happens and see if it matches your hunches.


Quote:
Quote:

It's called... Impulse...

People come in with an idea of what they WANT to get but when they're bombarded by the smells of delicious ooey gooey treats, sugar overpowers the brain and says "MUST HAVE COOKIE!"

Tis not reason to ask why, but how to bring about Pavlov's response in your customers... AND THAT is something that cannot be answered in a business or marketing plan..




You got that right. Why do you think the supermarket has all that stuff in front of their checkouts? It is for the impulse shoppers.

Motta Posted 7 Jul 2010 , 2:08pm
post #19 of 23

It's possible to know why someone will buy one product over another and there is research done on that every day by small firms and big ones. It's why niche marketing is working. And I could handle being a billionaire icon_biggrin.gif

I don't think impulse buying relates to ordering a cake for a special occasion.

Bagels are totally "out" in my area. Cupcakes are trending right now. Custom cake bakeries are a fairly new industry here. We're in Northern Alberta...it takes time to get the news up here icon_smile.gif LOL.

LindaF144a Posted 7 Jul 2010 , 2:27pm
post #20 of 23
Quote:
Originally Posted by Motta



Bagels are totally "out" in my area. Cupcakes are trending right now. Custom cake bakeries are a fairly new industry here. We're in Northern Alberta...it takes time to get the news up here icon_smile.gif LOL.




That's why it is totally independent on your area.

And I apologize. I have forgotten that you were looking for custom bakery information. For some reason I had cupcakery on the brain.

Motta Posted 7 Jul 2010 , 3:12pm
post #21 of 23

No problem, Linda!

CoutureCake Posted 7 Jul 2010 , 4:19pm
post #22 of 23
Quote:
Originally Posted by Motta

It's possible to know why someone will buy one product over another and there is research done on that every day by small firms and big ones. It's why niche marketing is working. And I could handle being a billionaire icon_biggrin.gif




This is something that you have to consider that companies like General Mills, Specialty Foods, etc. spend BILLIONS... Yes, with a "B" to figure this stuff out. My cousin works for a company like this and it's a very expensive process to bring product to the mass market even if all you want to do is to market locally using this method. The key principle is have a product that people want to BUY such that they don't care about the price. Yes, purchasing cake/bakery products does involve quite a bit of impulse, it's called "Up-selling"... Yes, they can have the flat sheet cake for $$ but if they're willing to spend a little more they can have the edible image of their kid's favorite character (Deco Pac) on it.. Or, they can spend a little more yet and have the plastic figurines on it.. Or, if they spend a little more yet, they can have something personalized that doesn't "look" cheap... The thing is, have your quality of product figured out and finding a customer base for it will be easy. If you've got the best tasting quality product for the price you're going to get known for it and half of your bell dinging is going to be done for you. And... how many people do you know who walk into the bakery to order a cake and walk out with at least one or more donuts or cookies???

_christina_ Posted 7 Jul 2010 , 6:04pm
post #23 of 23

So, maybe it's just me and my very, Very, VERY humble opinion but I think what you seem to be looking for is precisely what YOU need to decide. You need to decide how you are going to market your business, brand your business. How are you going to pull in customers and entice them to buy your product.

How and where do you fit in your market. I guess a firm could tell you that but they would just be asking you the questions you probably already have in your head and then writing it down. They would also look at what you already have written and then answers these questions with that info. So no new research of info for you, just extracting it for you.

As a start up I am not wiling to pay $ for the info stated above. That is something I have to decide and do. Also, people follow trends so it actually is an ever evolving job. That is why I think it is important for you to figure it out for your business, in your area, for your product.

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