How do you do market research for a solo startup in these difficult times?

In My Humble Opinion
1

As mentioned earlier, I’m thinking of hanging my shingle. But before I do so, some market research is in order. To see if there’s a market for my services for a start. I could just go ahead but that would be imprudent. My target area has very prosperous parts - or they would otherwise be if not for the current circumstances - mixed with terraced houses. There are a fair few shops in the area, but my target market is going to be older people and established families - those who need help with their PCs and those families with multiple PCs in their family who want everything organising, and safe backups.

So there’s going to be a lot of foot-pounding asking questions. The last item is definitely a luxury item for most people.

I’d really appreciate Dopers’ experiences and advice.

2

What’s the downside to just charging in? i.e. running some advertisements, making some phone calls, and waiting to see what happens?

3

My funds are limited.

4

Talk to as many people in the demographic you are targeting as possible. If you do not have access to these people that may be a problem right off the bat, you will need this access to sell your services.

If the word “sell” gives you pause, reconsider cause that is what you will be doing.

They key is to ask the right questions. Whether or not there is a market for your services is not the right question. If you gave the services away there would always be a market. What you need to determine with your research is

  1. How much would your potential customers be willing to pay for these services?

  2. How would they like these services to be structured…would they want to hire you on a strict hourly basis or would they prefer to have some sort of retainer system in place?

  3. What kind of response time would your customers be looking for? This can be a real issue in a single person business. One of the biggest issues I have always faced is everyone always needs you RIGHT NOW. If you have a client on retainer and can’t come over right away, how would that impact your contract? If you are working on an hourly basis, would they just grab the phone book and find someone else?

  4. Exactly what would your customers expect from you? Are they looking for someone to be their expert and do every little thing for them so they don’t have to fill their little heads with technical voodoo or are they looking to be educated so they can figure it out themselves next time? This is very important as it goes to the issue of repeat business…and it also figures in to the response time issue mentioned above…sometimes a customer that CAN do things for themselves frees up your time for other clients.

Then you need to analyze the answers you get and take them with a grain of salt. People will probably not tell you what they are really willing to pay. You need to look at what similar companies charge for their services and determine if these rates keep people from using their services. As a one person business the strategy of undercutting the going rate is probably a very good one as you have much less overhead. But if the going rate is $150 an hour, it is a mistake to say …hey I can do this for $25 bucks an hour. The going rate has some logic behind it and you can fail right from the start if you don’t analyze your cash flow properly…hey, I can do this for $120 bucks an hour is probably a better thought pattern. A key element in this is whether our not the potential client can do it themselves without hiring anyone, if that is the case you may need to be more competitive. Offering a low rate for the initial service call can be a good strategy but it can often give a customer an opportunity to take advantage. If you try this you need to be upfront about your real rate, though.

Ditto for response time, your clients will probably insist they need immediate response but you need to look at the industry and extrapolate what really is an acceptable response time.

Working for yourself is really great, it’s the dream. But you need to be honest with yourself about the results you get from the survey. If you don’t like the results you have to bite the bullet and do something else.

I undertook a similar survey about 5 years ago when I was thinking of becoming an independent consultant. After I spoke with my potential clients, I realized I really was not happy with their idea of fair compensation relative to what they would be realizing from my labors, especially as they would be under no obligation to give me any work.

And these clients I surveyed were people I had known for years, in retrospect it would’ve been I real mistake to assume I knew what they thought.

So, instead I went with an exclusive contract to one company, even though this meant I had to share some of my profits it was worth it in that I had some guaranteed income and increased access to products and clients I would not have otherwise had.

I still am in this arrangement and it was the best choice.

Best of luck in this endeavor and I really hope you can make it work

5

I’m not an expert, but in my opinion, usually the biggest stumbling block in starting a business is figuring out how to get potential customers.

In that case, the first thing you are going to need to figure out is how to get business on a shoestring. Because if you can’t do that, then there’s no point in doing “market research.”

I gather that your business involves servicing and maintaining peoples’ computers. Ok, well why not just start calling up local businesses and pitching your services? It will cost very little and you’ll find out pretty quickly if your business idea is viable.

6

That’s much appreciated - lots of good info, too - I have yet to decide to do it, though.

7

Get in touch with the user drachillix. He runs a successful PC repair and service shop. I say if you don’t have the money to pick the brains of people who will be using your service, pick the brains of the folks who already perform the service.

8

No, that wasn’t a BIOS beep code that was my SDMB Pager. :smiley:

In my case the best ad venue has been phone books. Granted not real cheap but I started with a $180/mo business card sized ad in the local AT&T directory. Your target market can’t find you online, their puter doesen’t work. :smiley:

I got 2-3 phone calls a day and started scoring jobs. Right now (3 years later) we are dropping about $1100/mo in multiple phone book ads and grossing $13K-$15K a month. I am dialing back a touch on the next phone book to eventually bring our advertising costs down to about $700/mo and increase our responsiveness (fewer calls, faster response).

My market research was pretty much non existant, I called around and asked for pricing on various types of jobs and undercut them all to try and build market share.

I am still on the low end price wise @ $45/hr shop and $65/hr onsite. Right now I would probably actually be looking at folding if not for the fact that 4 long time local shops have folded in the last 3-4 months and we have inherited alot of their spillover. Even with that, it has been slow for a few weeks, I blame the back to school crunch since sept is always dead for me.