Do a market survey
Verified 21 October 2021 - Legal and Administrative Information Directorate (Prime Minister)
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Conducting a market study is necessary before creating your company. It lets you know whether your idea has a chance of being profitable. The study must be conducted in steps.
What is the market?
This is the meeting between 4 items following:
- The product you will sell: theoffer
- Customers who will buy it: the request
- Theenvironment : time, location, trends, technologies, competitors, legislation, etc.
- The way you will sell it: distribution channels and business strategy (marketing)
What is a market study?
It consists of the precise description andanalysis fine 4 items that make up your market.
Which tools to use?
To conduct your market research, you need the following tools:
- Field surveys
- Searches (Internet, official sites, business sites, specialised press, social networks, blogs)
- Analysis and conclusions based on these findings
You need to interview potential competitors, industry entrepreneurs, professionals, future clients, project advisors (CCI: titleContent, CMA: titleContent, Pôle emploi, networks of entrepreneurs, company incubators).
Your analyses should be based on ground reality (market) and encrypted data.
1mother possibility: you
You can you your market research.
You don't need to have done economics studies to do your market research. Just take the time.
2th possibility: a third
You can make, but it is imperative that you were very involved.
The following organisations can conduct your study:
- Of professional guides : CCI: titleContent, CMA: titleContent, Enterprise Network , BGE Entrepreneur Support : low cost or free or possible funding
- Of business school students : low cost or free
- Of private study firms (company, tax, accounting, etc.): paying €2,000 and €7 000 around), but funding is possible
To help you find a professional guide, BPI Création offers a search tool:
This is your product (or your department).
You must describe your product.
You answer the following questions :
- What does your product represent, what is its image in the minds of consumers? What does it symbolise?
- What is its added value compared to competitors' products?
- What need does he meet?
- What solution does it offer?
- What hope does he bring?
They are customers.
You must describe your future customers.
Be most accurate possible.
You answer the following questions :
- To whom is your product or service offer addressed?
- Where do your future customers live? How?
- How old are they, their gender?
- What are their habits, their hobbies?
- What are their problems? What about the solutions they choose?
- What are their social relationships? Their networks? Their communications?
This is all the external parameters that will influence your offer and your demand.
You answer the following questions :
- What is the market trend?
- What are your main competitors? What do they bring more or less than you?
- Is there an upcoming event that will change the context? Examples: the Olympics, a factory closure.
- In which technological environment will your product or service appear?
- Is there any specific legislation that constrains or changes your strategy?
- Do you have any plans for ecological impacts and solutions?
You can usefully create watch your competitors (monitor their marketing developments, developments, etc.).
TheInsee: titleContent provides tools to build lists of competitors and analyse your environment:
You must determine how you will sell your product.
The business strategy is also called in different ways: a marketing strategy, business model, mix-marketing or business model.
Answer the following questions
- How will you make yourself known, what promotion will be made for your product?
- What will your rates be?
- Who will be your suppliers?
- Who will make your product?
- What will be your distribution channels, where will your product be sold (internet, professional networks, shops etc.)?
- What will be the relationship with your customers, how to retain them?
- Where will your products be stored?
- What will be the development of your business (Internet, national, international, etc.)?
Target All Constraints
It's about predicting what can hold you back.
You need to identify what can drive up your costs: storage, production, distribution, communication.
- Does the fluctuating price of raw materials affect your production?
- Do suppliers in the sector have a monopoly?
- Is the demand for your product seasonal?
What's that about?
This part of the market research is essential to the success of your company. It is also called financial forecast.
It flows from your business strategy that you defined in your market study.
These are documents in the form of encrypted tables.
The financial forecast shall be composed of 4 :
- Income statement (3 years)
- Forecast balance
- Funding Plan (3 years)
- Cash budget or cash plan (over 12 months)
What's it for?
It's a tracking tool your financial situation.
The data in these documents must be updates then every 6 months after you create your company.
It helps you:
- Check your company's profitability or not
- Whether or not your business will generate profits
- Identify your financing needs
- Request Funding to banks
- Negotiate with your suppliers
- Convincing Investors
this budget will be included in your business plan folder.
Who realises it?
You do not need to be an accountant to start building this document.
It is advisable to make yourself accompany
- by creative advisers (CCI: titleContent)
- by an accountant or accountant.
Step 1: income statement
This is a table where you record your expenses (expenses) and your products (revenue).
After this calculation, you can evaluate your result.
If your products are higher than your charges, your result is a profit, otherwise it is a loss.
You encrypt your charges.
The operating expenses are all you need to make your company work:
- Purchase of goods and raw materials
- Storage charges
- Overhead: rent, insurance, maintenance, etc.
- Taxes: CET, property tax, VAT, continuing vocational training, apprenticeship tax, etc.
- Current Management Load: supplies, small equipment, fuel
- Staff compensation: salaries, social contributions
- The life of the equipment invested, i.e. the loss of the value of an asset invested and devoted to the activity, due to the wear and tear of time or obsolescence
You will meet the term depreciation allowances. Depreciation is the loss of value of a capital asset of the company due to the wear and tear of time or obsolescence. They're also called assets.
The financial charges are loan repayments.
The exceptional charges are those that do not fit into current management or normal operations. They do not impact the operating result (example: sale of equipment dedicated to the activity).
You will meet the term assets transferred or disposal of assets. These are tax and criminal fines, donations, tax recalls.
You encrypt your operating products, your turnover (CA): it is everything that you sell and everything that makes you money from your business.
These are mainly:
- Sale of purchased products (for resale)
- Selling products made by your company
- Sale of the realisation of a service
- Operating grant from State or local authorities: a subsidy that helps, for example, to pay your manufacturing and production expenses, or to compensate for the lack of AC
- Other products: financial (example: participation in other companies), exceptional (example: investment grant (e.g. to help pay for equipment)
Step 2: estimates
This is a table that summarises what the company has: sound heritage.
The assets and liabilities of a company.
- The : it is the property and the rights that will be used for the functioning of the company. Examples: buildings, land, equipment, machinery, furniture, stocks.
- Liabilities: these are the financial means to pay for your assets. It is about debt and capital. Examples: your bank loans, the contributions in kind (car, computer, etc.) or in money, the contributions of your associates to the creation of the company or by increasing the capital.
Step 3: funding plan
3th The table consists of 2 elements:
- Your (BFR: titleContent, capital assets, repayment of loans)
- Your Resources (CAF: titleContent, capital inflows, current accounts, loan subscription)
It allows you to see if your project is viable.
If your resources exceed your needs, you can build up free cash. Otherwise your company will have cash flow difficulties and therefore the activity will be threatened.
You must complete forecast on 3 years coming.
2 important resources should be included:
- The working capital requirements (BFR) : it's about inventory fees, receivables, payment of your vendor debts. To calculate them, you must evaluate the following 3 points:
- Inventory turnaround time
- Payment of customers (your claims)
- Payment time for your vendors
- The self-financing capacity (CAF) : this is your result (= your revenues minus your expenses) + depreciation allowances (= the sum of the value losses of your fixed assets)
the banks use this forecast funding plan to review your loan application and calculate your loan.
Step 4: the budget or cash-flow plan
This 4th summary table month your back and cash outflow.
This is the transactions in the company's bank account.
We also call it a monthly cash statement.
Cash receipts are called receipts.
Outflows are disbursements.
You must be aware of the different payment deadlines to enter the amounts in the appropriate month.
certain tax payments (VAT, payroll taxes, business taxes, etc.) are paid in advance with annual balances. You must know the payment date of the deposit and the balance.
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