MARKET SURVEYS

The desire to start a business is not enough to ensure its success, even when the owner has enough capital to get the business started properly. Hard work, great talent, and the support of family and friends will not guarantee the survival of a business. Simply stated, the success of a business depends on enough people wanting the products or services of the business and having the money to pay for them.

The geographic area from which a business attracts most of its customers is termed its market. For garden centers, flower shops, retail nurseries, lawn maintenance firms, and landscape contractors, the market area may be limited to a city or county. For wholesale nurseries, mail-order nurseries, landscape architects, and propagators, the market area can often extend beyond state lines. The safest way to begin a busi­ness is to study the market beforehand. An analysis known as a market survey can answer the following questions:

• What is the extent of the market area? If deliveries are to be made, how far can the truck travel before the cost of delivery becomes prohibitive? How far must customers travel to reach the business? Are they more likely to use the telephone to call in orders or to come in personally?

• Is there an established desire for the products or services of the business or must one be created?

• How strong is the economy of the market area? In the opinion of some people, ornamental horticulture products and services are not essentials. Do the local people have sufficient funds to support their desire for what the business is selling?

• How many similar businesses are already established in the market area? A pie can only be cut into so many pieces before they become too small to satisfy. A market area will only support a certain number of similar firms profitably. A saturated market area is not the place to begin a new operation.

• How good is the existing competition? It is difficult to gain an edge against a competitor that enjoys a good reputation in the community and backs it with competent performance and fair prices.

• Can qualified employees be attracted and retained? In upper income market areas, there may be a scarcity of workers, and workers may be unable to move into the area at the wages a new business can pay.

If possible, the would-be owner should let someone else do the mar­ket study. Wishful thinking and ego can get in the way of an objective analysis. A hopeful newcomer may be sure that customers will beat a path to the door of a new business when someone finally does it right. The facts may indicate that the business would be better located in a different area. In a saturated market area, someone must eventually close each time a new business opens. The chances are good that it will be the new business.