Company Creation: Conducting a Market Study

1^era possibility: yourself

You can realize yourself your market research.

You don't need to have done economics studies to conduct your market study. Just take the time you need.

2^eme possibility: a third party

You can have realized, but it is imperative that you were closely involved.

The following organizations can conduct your study:

• Of professional coaches : CCI: titleContent, CMA: titleContent, Enterprise Network, BGE Support for Entrepreneurs : low cost or free or possible financing
• Of business school students : low cost or free
• Of private study firms (companies, tax, accountants, etc.): paid (between €2,000 and €7,000 about), but financing is possible

It's about your product (or your service).

You need to describe your product.

You must answer the following questions :

• What is your product, what is its image in the minds of consumers? What does it symbolize?
• What is its added value compared to competitors' products?
• What need is it meeting?
• What solution does it provide?
• What hope does he bring?

It's the customers.

You need to describe your future customers.

Be most accurate possible.

You must answer the following questions :

• Who is your product or service offering for?
• Where do your future customers live? How?
• What's their age, what's 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 means of communication?

These are all the external parameters that will influence your supply and demand.

You must answer the following questions :

• What is the market trend?
• Who are your main competitors? What more or less do they bring than you?
• Is there an upcoming event that will change the context? Examples are the Olympics, a factory closure.
• In what 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 a watch over your competitors (monitor their marketing developments, developments, etc.).

L'Insee: titleContent provides tools to build competitor lists and analyze your environment:

List your competitors

Insee: economic portrait of a territory

You need to determine how you're gonna sell your product.

The business strategy is also called in different ways: a marketing strategy, one business model, one mix-marketing or even a 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?
• By whom will your product be made?
• What will your distribution channels be, 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 paths of your business (internet, national, international, etc.)?

Target all constraints

It's about anticipating what might be holding you back.

You need to identify what can drive up your costs: storage, production, distribution, communication.

What's this about?

This part of the market research is critical to your company's success. It's also called financial forecast.

It comes from your business strategy that you defined in your market study.

These are documents in the form of encrypted tables.

The financial forecast shall consist of 4 parts :

1. Profit and loss account (over 3 years)
2. Forecast balance sheet
3. Funding plan (over 3 years)
4. Cash flow budget or cash flow plan (over 12 months)

What is 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 whether your company is profitable or not
• Know if your business will generate profits or not
• Identify your financing needs
• Apply for funding at banks
• Negotiate with your suppliers
• Convincing Investors

Who's doing it?

You do not need to be an accountant to initiate the construction of this document.

However, it is recommended that you accompany

• or by creative advisers (CCI: titleContent, CMA: titleContent),
• either by a accountant or accountant.

Step 1: The profit and loss account

This is a table where you record your expenses (expenditure) and your products (revenue).

After this calculation, you will be able to evaluate your result.

If your revenues are higher than your expenses, your result is a profit, otherwise it's a loss.

You must encrypt your charges.

The operating expenses are everything you need to run your company:

• Purchase of goods and raw materials
• Storage costs
• General costs: rent, insurance, maintenance, etc.
• Taxes: CET, property tax, SST, continuing vocational training, apprenticeship tax, etc.
• Running load: supplies, small equipment, fuel
• Compensation of staff: salaries, social contributions
• Life of invested equipment, i.e. the loss of value of an asset invested and spent on the activity, due to wear and tear or obsolescence

You will encounter the term depreciation charges. Depreciation is the loss of value of a fixed asset of the company due to wear and tear or obsolescence. They're also called fixed assets.

The financial charges are loan repayments.

The exceptional charges are those which do not fall within the scope of day-to-day management or normal operation. They have no impact on operating income (e.g. sale of business equipment).

You will encounter the term transferred assets or disposal of assets. For example, it is an obsolete asset or production tool that is separated for the purpose (very often) of generating cash.

You must encrypt your operating products, your turnover (CA): this is everything you sell and anything that brings you money from your business.

These are mainly the following:

• Sale of purchased products (for resale)
• Sale of products made by your company
• Sale of the realization of a service
• Operating subsidy paid by the State or local authorities: a subsidy that helps, for example, to pay your costs for manufacturing and production, or to compensate for the lack of turnover (turnover)
• Other income: financial (e.g. participation in other companies), exceptional (e.g. investment grant to help pay for equipment purchase)

Step 2: The forecast review

This is a table that summarizes what the company owns: its patrimony.

A company's assets and liabilities are made up of the company's assets and liabilities.

• The asset : it is the property and rights that will be used for the functioning of the company. Examples: buildings, land, equipment, machinery, furniture, stocks.
• Liabilities: it's the financial means that pay for your assets. It's debt and capital. Examples: your bank loans, contributions in kind (car, computer, etc.) or in money, contributions of your associates to the creation of the company or by capital increase.

Step 3: The financing plan

Ec 3^eme the table consists of 2 elements:

• Your needs (BFR: titleContent, fixed assets, repayment of loans)
• Your resources (CAF: titleContent, capital injections, current accounts, underwriting of loans)

It shows whether your project is viable.

If your resources exceed your needs, you can build up available cash. Otherwise your company will have cash flow difficulties and therefore the business will be threatened.

You must complete the forecast on 3 years to come.

2 important resources must be included:

• The working capital requirements (BFR) : this is inventory charges, receivables, payment of your payables. To calculate them, you must evaluate the following 3 points:
  
  • Inventory Turnover Delay
  • Payment of customers (your receivables)
  • Payment term for your suppliers
• The self-financing capacity (CIF) : this is your profit or loss (= your income minus your expenses) + depreciation charges (= the sum of the impairment losses of your fixed assets)

Step 4: Budget or cash flow plan

Ce 4^eme summary table month by month your receipts and your outflow of money.

These are transactions in the company's bank account.

We also call him a monthly cash flow statement.

Cash receipts are called cash receipts.

Exits are disbursements.

You need to know the different payment periods to enter the amounts in the appropriate month.