How To Franchise My Business 
Leading business franchise consultant provides free help and advice

Understanding Your Target Market

You can save yourself time and money by understanding your target market before you begin market research. Stop to consider who buys your product and why. The target market of a music shop is very different from the target market of an upscale clothing outlet. Consider your average customer, taking note of such things as:

• Age
• Gender
• Race
• Education
• Marital Status
• Family Income
• Language
• Ethnicity
• Anything else that you think affects your customers

Once you have an idea of your target market, you can begin researching locations and making appropriate decisions. If your target market is teenage girls, for example, you wouldn’t want to set up a franchise in a town known as a retirement destination.

 Conducting Market Research

For some people, you’ll want to contract with a franchisee (or at least a potential franchisee) before you do a lot of intensive market research. However, at least the basics should be handled before you enter into any kind of verbal agreement, and you must conduct a thorough study before you sign a franchise agreement. Remember, your franchisee also has the right to access your market research and know that they are embarking on a profitable venture.

There are several methods of conducting market research. They are:

1.      Surveys

Surveys are lovely because they allow you to communicate directly and clearly with your customers. Surveys take the form of a series of concise questions designed to give you a picture of the area’s demographics. You can conduct surveys;

• One on one (such as setting up in public locations and stopping people, inviting them to take part in your survey)
• By telephone (you’re less likely to get a positive response, but you can complete the survey in your own time from your own home)
• By mail (the easiest and most cost effective method, but also the one with the lowest response rate)
• Online (consider this option only if a large number of your customers are likely to interact with you over the internet – i.e., if you have an online aspect to your business)

2.      Focus Groups

Focus groups are more useful for large companies than small franchises starting out. You get a group of people together for several hours and lead them through carefully scripted questions. The negative side of this is that your sample size is very small, giving you an inaccurate idea of the market.

3.      Field Trials

In other words, set up a miniature business, offer samples, and see what kind of response you get.

This is by far the easiest method of market research, but you shouldn’t conduct it on its own: use it as a supplement to the other methods. Observation means checking a given market to see what sort of businesses seem to succeed there, analyze trends, and check statistics, giving you a rough idea of the area’s market structure.

Analysing the Competition

A useful tool in analysing market trends is analysing the competition. The competitive analysis chart is a free online tool and an extremely useful way to compare and contrast your business with similar competitors. This will give you a strong idea of where you stand in relation to other businesses.