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Which market is best?

Market Research At Local And National Levels

Demographic analysis

Researching the market in which you're considering setting up in is crucial. Detailed market research into the location you have in mind will reveal whether it presents a good business opportunity or not. In order to do this you will need to collate as much information about the local residence and businesses, covering aspects such as: population, gender, age ranges, number of local businesses and competitors, and employment statistic.

When you have this information you'll then be able to assess the viability of a new business further by asking whether…

There are too many similar businesses in the area? If there is a market for your business in this area? If you are selling business to business - are there enough businesses to support your proposed offering? And how well local businesses are performing?

PEST Analysis

Another useful tool used to assess a business opportunity is what's called a Pest analysis. It works by getting you to think about the political, economic, social and technology climate that could impact your new franchise. Considerations under these headings include, for example…

• Political factors - changes in government policies that may affect your business or industry sector.
• Economic factors - changes that may occur in the UK economy that could affect your business.
• Social/cultural factors - changes in consumer attitudes and culture that could affect your business?
• Technology factors – changes in technology that could impact the franchise sector you are looking at?

These are all external factors which you have little or no control over, but can have an affect on your business and industry sector.

For example:

(i) If technological change drives the industry you operate in, then any advances will impact on the industry and in turn your business.

(ii) If you are taking a franchise into an international market as a master franchisee, then the culture in the new market will have an impact on your business.