Market Research
A close understanding of the local market and your customers’ needs is essential in order to succeed in business. Performing market research on potential customers and your competitors will help you to gain this vital knowledge.
Customer research
This allows you to find out what your potential customers want in terms of quality, price, flexibility and service. If you can work out how they choose their childcare, you can tailor your services to fit their needs. Perhaps the most valuable information is from your potential customers.
Try to find out:
- Who is likely to buy your services?
- How much would they be willing to pay?
- What services do you want to provide and do they match the needs/wants of your potential customers?
- What is the competition like?
- Is your location in an area of need?
And therefore answer the question:
Are you able to compete with new and existing childcare businesses and will there be a market for your business?
- Who they are and what groups they fall into?
- How many potential customers there are?
- How many childcare sessions per week do different groups of parents use on average?
- The factors customers consider when choosing childcare?
- When and where they want their childcare?
Questionnaires are a useful tool for doing this and allow you to gain specific information about your customers’ needs. If you are buying an established business much of the information should already be available, such as occupancy trends and running costs. If you are setting up a new business you will need to use market research in order to accurately predict financial forecasts for income and expenditure.
Your business development adviser can help you with this. Good market research will bring together information from various sources using a number of research methods.
Who are your competitors?
It is helpful to build up as much information as you can on local childcare businesses. Find out about their service, prices, and reputation as well as how busy they are.
If spaces are available, perhaps there are already enough childcare places in the area. Find out how they advertise and promote themselves. Get a copy of their prospectus. Use the information gathered to produce a comparison table listing everything that might affect what you decide to offer, for example, opening times, facilities and extra services. This should help you to see what customers value and you may identify a gap in the market.
Secondary research
This is information and research gathered by other organisations and may include:
- The number of children in the appropriate age group in the area.
- The number of childcare businesses in the area and what services they offer.
- The number of childcare places in the area.
- New housing developments in the area.
- New businesses in the area.
- Current and emerging trends in childcare.
Interpreting results
It is through the thorough analysis of your market research that you will be able to develop realistic and achievable business aims. While it can be tempting to pick out results that confirm what you want to hear, and ignore the rest, this approach is likely to damage your business. By making informed business decisions you will ensure that your business has the best chance of success.
Our childcare business advisers are happy to meet with you or you can contact them for advice by phone on 0116 305 8048 / 8039 or email childcare@leics.gov.uk.