Years ago an auto company had high hopes for a fantastic new model. It sought to tap a growing market: the junior executive, the ``man on his way up.'' Too bad the company didn't survey its intended market. The junior executives were buying -- and kept buying -- Cadillacs, which said that they had ``already arrived.''
The new car model bombed. The company was Ford, and the car was -- you guessed it -- the Edsel.
Don't make the same mistake. Sure, you love your Aunt Matilda's home preserves. And everyone else should want them, but before you open that jam and jelly shop, find out if enough people do, and at a price that won't drive you out of business.
``Test the waters in your market,'' says marketing consultant Janet Nichols. Talk to potential customers, she says. Call your prospects up and say, `` `I'm thinking of offering this or that service, would you ever be interested in using these?' '' Ask them how much they would pay for the described good or service.
Consider your location when choosing your new business. Think about which goods or services your area particularly needs. Although few people would start that ski-package travel business in Florida, they might open a retail shop without first checking out the traffic patterns surrounding it.
Ask the local chamber of commerce for area demographics -- how many people live in the immediate area, what their median income is, etc. Contact your town hall to make sure your future site is zoned to allow your business.
Be aware of services that would appeal to growing segments of the population. The baby boomlet (kids of baby-boomers) and retired people form two such growing, lucrative markets now.
Although there is opportunity in catching the beginning of trends, ``there are tremendous entrepreneurial opportunities in old established industries,'' Ron Smith of Entrepreneur Magazine says. The last 10 years, the economy has ``become dominated by entrepreneurial people finding niches,'' he says.
Bob Antonucci, owner of the San Antonio-based Commercial Maintenance Contracting, has done quite well filling one of these market niches. He had noticed that ``there is a lack of time for the average [small-business] person to do his own service and maintenance work,'' and a lot of the big companies ``don't want to mess with'' the small jobs.
Filling an economic niche, and filling it well, is one of the keys to success in your small business.