Sizing Up Your Customers

Tom and Kosta Kartsotis took time to do market research before they invested a lot of money to launch Fossil, Inc. They needed to know if there was enough demand for their product to support the development of a profitable business.

Your parents may have scolded you for being demanding when you were a child, but in the business world, “demand” is a very good thing — particularly customer demand. In order to build a substantial business with a good level of income, you must be sure there is adequate customer demand for your business idea or concept.

Market research is the process of systematically gathering, recording, and analyzing information and data that measures customer demand. Good market research: 

• Helps you know how many people will purchase your products
• Identifies where these potential customers are located
• Tells you their age, gender, income level, and other key facts
• Allows you to fine-tune your business concept and product offerings
• Provides a basis for making better business decisions
• Helps you create a more feasible business plan
• Helps convince others to support your business start-up or expansion

As you can see, it is very important to “look before you leap” into business. Effective market research is an essential step that will help you decrease risk and increase your chances of being highly successful.