Do your homework: why market research matters
By ATB Financial 3 December 2018 2 min read
No one likes homework. But Amy and Jeff Nachtigall, masterminds behind Edmonton-based Sugared & Spiced bakery, beg to differ (or at least admit it’s important). They did some pretty extensive market research as they transformed their stall at a local farmer’s market into a bustling brick-and-mortar location, and they’re here to share how they did their homework, along with some suggestions on how you can too.
If at first you don’t succeed...
Initially, market research was trial and error—how much did people like the recipe? What did customers ask for when we changed the line-up?
Ask questions obsessively
We also asked our customers lots of questions, through Instagram, Twitter and Facebook. Very early on we started an email list. We also used this to take surveys of our existing customers and supporters.
If you can’t beat ‘em, eat ‘em?
To research our competition, we ate at every bakery that we could find. Every spot in Edmonton. Several in Vancouver, Hamilton, Chicago, Boston, and San Antonio. All over Vancouver Island, and a few on Maui. Anywhere we could travel with work or find a great deal on a flight, we would find every bakery we could. We were looking for the small ones, the ones that did things a little differently.
We not only tried their product, but we noted their opening hours, their square footage (both in the back and up front), their product mix, equipment mix, and number of staff. What else did they offer? Were they following trends or creating them? What was the atmosphere among customers in the shop?
Hit the books
We reviewed a variety of industry reports—Business Link was helpful in finding sources of information for us. We looked at IBISWorld reports for areas that we thought might include our products: bread production, and specialty food stores. We looked at industry reviews from Euromonitor International.
We found textbooks that were specifically designed for students learning about opening a bakery. We subscribed to industry magazines and websites. We spoke to business associations in areas where we considered locating the shop. We compared demographics neighbourhood by neighbourhood—we have a map of Edmonton with the average household income written in black marker beside every neighbourhood name!
Go with your gut
It's also crucial to assess your own intuition. When you've gone with your gut on something in the past, were you right? We used the feedback we received through trial and error to fuel our intuition.
Become a research ninja
Do as much market research as you can possibly handle, and then do it again. Plan to know more than you need to know. Don't just go through the motions, look for new information and be prepared to have your assumptions destroyed.
Use every avenue to research: interviews, site visits, website comparisons, customer surveys, industry and government reports. Use resources that are offered by your bank or by funded organizations such as Business Link or groups designed to offer support to entrepreneurs; we consulted AWE (Alberta Women Entrepreneurs) early on for advice on sources of financing and help with starting a business plan.
Talk to other entrepreneurs. Consider "Market Research" to be your second or third full-time job.