Market Research for Your Small Business: Plan Software

The second part of our "Small Business Primer" series.

In the last article, I discussed two of the basic issues in building your consulting practice: 1) the business you are in and 2) your business goals. If you didn’t do the activities, do them now:

  1. In 20 seconds or less, state clearly what kind of computer consulting you do.
  2. Write your long-term (20-, 10-, and 5-year) and short-term (1-year and 6-month) objectives.

Doing the above activities will set the stage for sound business planning and help you to realize your personal and business dreams. Let’s continue:

Who buys your services?

Activity: Write down the type of organizations and people who have hired you for consulting assignments in the past. Do this for each of your market segments, including those you want but currently do not have.

Include the following for each type of organization you serve: number of people, annual revenues, expected growth, industry, buying cycles, and buying policies. Also include information about contacts such as: personal characteristics, interests/hobbies, management styles, methods for finding consultants, and buying/hiring considerations.

Here’s an example: “One of our market segments is small financial service firms having 15-50 employees and less than $10M in annual sales. Typical growth rates are 10% per year, but half seem to have been hurt by the recession and are growing at a slower rate. This segment tends to buy more services when the stock market is doing well and prefers to deal with computer consultants who have at least five years of experience in financial services. Since this market consists of small companies, the president and/or vice president is often the final decision maker for buying computer services. Presidents typically earn more than $130,000 annually and read publications such as The Wall Street Journal and Business Week. Many find and hire consultants by word-of-mouth and the consultant’s reputation, often asking accountants and attorneys for referrals.”

Wow! What a statement! It might take you a little bit of research to extract this kind of statement from your client base. You can get most of this information simply by asking. Annual reports can also be helpful in compiling sales and growth figures.

Why is all of this information important? Once you have a detailed description of your clients, including their buying considerations and habits, you have a way to identify similar organizations — your potential clients. It’s like a police drawing of the people you’re looking for. Once you’ve sketched out your market, you have a profile to use for finding more people who match that sketch.

Up until now, you have defined: 1) what type of service you provide, 2) your long- and short-term goals, and 3) your target market(s). This is quite an achievement. You now have the basis from which to customize your marketing strategies — all part of a good business plan.

I’ve found some useful business planning software packages to help you think about various business questions. BizPlanBuilder by Jian, available at most computer retail stores, sells for $99 (street price: $70) and contains many templates of text and spreadsheets for cost analyses. You can import the templates into virtually any word processing and spreadsheet program. BizPlanBuilder is most useful when used in conjunction with the accompanying manual, which is, effectively, a good book on business planning. The text templates include several sample questions and answers that help to guide your planning process.

Business Architect, available directly from Enterprising Solutions, Inc. (800-831-6610 or 314-939-0374) costs $149 and is an actual software package, not a set of templates. It prompts you to answer questions and enter data into its built-in word processor and spreadsheets. Then, you hit a couple of keys and it produces a complete business plan, merging all of the pieces of information you entered. It took me a little while to get used to its built-in word processor and spreadsheet (I overwrote my projected budget when I misunderstood one of the commands). You can print your plan directly from the software or import the text (and data) into your word processor. The problem with the latter is that everything is formatted in ASCII for a Courier 10 font, including the spaces to center-justify headers. Other than those quirks, it’s a good program.

Since a business plan is a customized document, no software package can give you text that is perfectly suited for your business. You’ll still have to do the thinking, but you’ll have a guide for the questions you need to ask yourself. Most business planning software is based on selling a product. Don’t be discouraged by this. In computer consulting, your services are your products — sold by the project or by the hour.

In the next article, I’ll discuss specific marketing strategies that will increase your credibility and give you more exposure.

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