What is your market?
Put simply, your market is the group of people or companies you want to reach with your product or service.
To stay with our examples:
For the online shop with Asian products, the market consists of all people in Switzerland who are interested in these goods. In this example, it makes little sense to narrow down the market locally because the online shop can deliver throughout Switzerland just as easily.
By contrast, the nutritional advisor often visits his customers in person, so his market is more local, for instance Central Switzerland.
Why should you be familiar with your market?
The benefits of market research are self-evident: Founders should be aware at all times of what is happening on the market and how it could develop in the future. Especially in the foundation phase and in the early stages of working for yourself, detailed market research is important not only for preparing the business plan but also as one of its components. Founders use the market research data to make key strategic decisions that can significantly influence the growth of their company.
Step by step to your market overview
We have compiled a list of the most important questions that you can answer yourself. You can also dive deeper into each area. The goal is for you to get a feel for your market and know what is ultimately important for your company.
Your customers
What problem are you going to specifically solve with your new company? This also means that you will have to think about the target group and the customer base you want to address
- What are the particularities of my customers?
- How are your customers solving their problem today? This may be an initial pointer about who your competitors are.
Your market
To estimate the size of your market, you can refer to statistical sources such as the Federal Statistical Office or Statista. Try to familiarise yourself with your direct market and include future transregional markets in your planning. When estimating the size of your market, the issue of price is also important, although it is not always easy to arrive at the “right price”. You must take the following three factors into account when pricing your goods or services: prime costs, competition and strategy/positioning. Analysing your competitors can also provide you with additional helpful information. Plus: are you in a growth market? How fast is it growing each year?
- How much revenue can you generate in the first 1-3 years?
- Is your market growing, will it stay stable in the future, or might it even shrink?
Your competitors
Analyse your competitors as closely as possible. Your business will compete with them directly and you will only be able to stand out and be unique if you can develop competitive advantages that will allow you to attract more customers and build greater market share in the long term. To avoid competing head-on with your competitors, it may make sense to look at alternatives or substitutes (e.g. beer drinkers will not usually order wine in a bar).
- What companies are you competing with? Why?
- How does your offering stand out from the competition?
Useful templates you can download
Now you know the key questions you should be able to answer about your market. We have compiled some useful templates for you if you would like to dive deeper into this topic on your journey to working for yourself.
The next step is to develop your business model.
