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Confused about opening a store? Help!
- Thread starter Reach9
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Surely ones local governing authority has statistics/ data that can be provided to business owners/ prospective business owners.
I would start there and then examine the data relevant to the location of my business and decide if the demographic data matched/ supported the type of product or service I was trying to sell.
vincenz
macrumors 601
Yeah, you're right there are too many variables. I wish there were a simpler way of calculating how the store could impact the ones around it.
Thanks NathanMuir, i'll definitely consult them first, it makes sense to just analyze statistical data. I guess i'm just concerned if it's right calculation, and I really don't want to pay someone to do it for me either. But i know a few people who provide these services.
I was hoping for a program which gives close estimates to how much I would affect the competition, consumer-wise. It would be nice if Google came up with something like that for small businesses. Anyway guess I gotta do this old fashion way, because if it were that easy then there wouldn't be any risk involved.
Thanks guys! 🙂
If this was an essay, i would get a D so far.
Thanks NathanMuir, i'll definitely consult them first, it makes sense to just analyze statistical data. I guess i'm just concerned if it's right calculation, and I really don't want to pay someone to do it for me either. But i know a few people who provide these services.
I was hoping for a program which gives close estimates to how much I would affect the competition, consumer-wise. It would be nice if Google came up with something like that for small businesses. Anyway guess I gotta do this old fashion way, because if it were that easy then there wouldn't be any risk involved.
Thanks guys! 🙂
If this was an essay, i would get a D so far.
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Way back when the dinosaurs roamed the earth I took a year's worth of business courses at a university, and I've been operating my own business for 20 years. Photographic services with a few years of retail thrown in.
You just didn't give us enough information to work with. For example, if there is a single store in your community selling widgets, and they can provide all the widgets that the community needs, then opening a 2nd store means that each store gets half the business. There is no real advantage to location.
If there are multiple stores selling widgets, then the common thinking is that (in most cases) placing your store next to a competitors store can be good for both stores (assuming that there is somehow a differentiation in service, or quality, etc) because people can make a single trip to comparison shop. It's more convenient for the customers. It's why you will see a bunch of shoe stores in a single mall.
But we don't know enough about what your are doing, and where you doing it to express any meaningful opinions.
Firstly, thanks for the reply.
Let's say there is a furniture store in the community of about a 20 thousand people, and i want to start a business where i provide custom designed furniture (and other unique features, different than the current store). Unfortunately it looks like the furniture store in the community already provides enough, and it would seem to be pointless to compete. Their prices are excessive due to the fact that they're the only suppliers in town, so I was thinking of adding some choice.
I was just wondering if it were feasible to open another furniture shop, and if i could somehow measure it quantitatively. I've already started doing some research.
If you're serious about it, I would eventually run some marketing research and conduct some focus groups to find out potential customers' opinions of the current market. If the answer comes back that no one would be interested in custom, then you have your answer. You can find a lot of information out in focus groups if you ask the right questions. Good luck with your business venture!
ddehr026 makes a good point. You can do informal focus groups to help save money (i.e. talk to as many people in the street as you can)
Is 20K your total market area? Ask yourself this.
a) How many household is that? (Probably about 5K households, but you can get the figure from the Chamber of Commerce (or equivalent) or perhaps the Census people.
b) How many pieces of furniture on average does a household purchase in a year? (Make this part of your market research.)
c) How much of that furniture market can you hope you capture? Some people are going to buy from a department store or matter what.
d) Whatever that number is, can your store pay-off the start up costs, and then pay the rent and overhead, and then pay you enough to not starve by selling that many pieces?
This assuming the other store has rolled over and closed up at the sight of competition. However, these numbers are (relatively) easy to come up with. If your answer is "No", without the competition of the other store, then of course you have your answer. It's not a great idea.
If you get a positive answer, then you need to factor in what the other store is going to do. Chances are, they are going to cut prices to hang onto their market share. Figuring out what part of the market you going to be able to capture gets much more difficult. Plus your prices will need to be flexible to compete in a price war.
You could just check to see if the owner of the other store wants to retire? Perhaps you can buy them out?
Cheers