Quick Look Market Analysis
So what is a quick look marketing analysis? Although this technique is not exclusive to photographers, it is imperative in the skillfully planning of any startup strategy. When I was studying for my Master’s Degree, this part of the business process was considered the most important. This quick look approach helps in identifying the viability of your service or product. A quick look market analysis will clarify what differentiates you from your competition. Here is what you want to focus on where doing your quick look market analysis. First, you want to identify any potential customers and their buying or shopping habits. How many potential customers are there, how much are they paying for your type of product or service. Who is my competition and what are they doing that is making them successful and what are they doing that is making them unsuccessful?
This technique is important in reducing the risk of failure. The vicissitudes of market change can be daunting, but don’t let this discourage you. Understanding the climate of your market can make the difference in your business and help improve the chances of viability for your product or service and help obviate expensive resources and time prior to a solution. Remember the rule of supply and demand. With this analysis, you will find out whether or not customers even want the type of product or service you are offering. At this point, you may be asking yourself if this is even worth the effort and whether or not you even need to do a market analysis. It is important to know that not all businesses are created equal. There may be situations where you know how customers may react to your service or product, then something so extensive may not be necessary. Understanding your market, competition, and direction of your business should be considered, but a formal analysis might not be needed. Just keep in mind that the analysis is a great way to get some perspective on your market.
Contribution to the Business Plan
It is always important to have a living business plan. I say a living business plan because you can have your business plan change as your business changes. Many people look at business plans in the beginning of their business venture, however, this should always remain up to date if you intend to raise money through venture capitalists, angels, or even banks. Having an up to date business plan will give you an opportunity. The quick look market analysis is the most significant part of your business plan.
Market Analysis Overview
Knowing your industry is just not enough, you have to know the current trend of your industry. The direction of the industry can easily be disrupted or improved by new technology. Understanding the current state of your industry should include the size, trends, life cycle, and any potential growth. “Over the past five years, the Photography in the US industry has grown by 1.6% to reach revenue of $10bn in 2018. In the same timeframe, the number of businesses has grown by 3.0% and the number of employees has grown by 2.4%” (IBIS World 2018). Why is this important to know? Because it is easier to swim downstream than it is to swim upstream. Knowing the direction of your industry gives you a clear understanding of where your industry is headed.
Your target market should be a straight arrow. I’m going to use photography as an example. Many times, business owners and in this case, photographers, make the mistake of including every genre of photography. I do weddings, engagements, headshots, maternity, modeling, family, seniors, graduations, events, etc. Sure this can be a good way for you to get more customers, but think about what that learning curve will look like. Hone in on your target market and this will help improve your marketing effort through your platform of choice and improve your chances of success. Become an expert in that market then expand. Doing this first will help you bring in customers that are most willing to buy your product or service.
Why is important to understand your competition? This helps you understand where you stand. Every business is vulnerable and knowing those vulnerabilities can give you a leg up on them. Knowing your competition’s weaknesses. This could be bad reviews, poor customer service, old equipment, dated technologies. What can you offer to your customers that your competition is not doing? So what specifically are you looking for when analyzing your competition? Look for the competition that has products and services that are similar to yours. Why are customers buying from them? Loyalty, branding, price, etc. it could be anything. Identify competitors that are not so obvious. Many businesses say that they have an idea that no one can compete with. We have no competition! They would be wrong. Indirect competition for photographers can be anyone with an iPhone. Identify any strengths or weaknesses that your competition has. People with iPhones don’t have the capabilities that a photographer with a DSLR and Flash. Identify those weaknesses. Identify the strengths, like the convenience of photographing, cheaper, availability, or portability. One of the most significant components is the barriers to entry. Identify any potential pitfalls of entering into the market. How much is it going to cost, is the competition going to squeeze me out, are they going to try and undercut me until I go under, is there a possibility of retaliation from larger firms. Are there any legal obstacles, regulations, government, or city ordinances that need attention? Lastly, identify any windows of opportunity. Are you getting in early to take advantage of something that is emerging in the market?
You should be able to predict the direction of your business at this point. This is the best guess scenario. With most business plans, this is a guess anyway. You are analyzing the market and projections for your industry and customer base are based on the research you have obtained. You should be able to know how much money your customers will be spending, how much you will be spending on marketing, what share of the market you are going to be grabbing, and how much you will be making in potential sales. You will also project how much you will be pricing your product or service at this point. You can also determine if you can afford to generate revenue through sales price or retail price.
Are there any government agencies that will hinder, help or create bottlenecks in your release.
Some resources for your research:
Hopefully, this quick look analysis will help you identify potential pitfalls and help you uncover opportunities to exploit in the marketplace.
@GreyBugPhoto thanks so much for taking the time to write up such an insightful and thorough post. I'm sure this will go a long way in helping out some of your fellow pros!