QUESTION on Doing Market Research Before Starting a Wine Bistro
I am just starting to develop a business plan for a wine bistro in a suburban downtown area. What are my best methods or resources for market research? How do I determine if the area will be receptive to this business or if there is room for another restaurant in town? Thank you.
You are wise to consider conducting a thorough analysis of your market instead of plunging head-on with your planned wine bistro business. Market analysis is a key component of a business’ sales and financial plans.
However, a good analysis of the market entails comprehensive market survey, the costs of which may be beyond the reach of many small business owners. If you do not have the money to hire marketing research firms, there are a number of cost-effective methods to help you determine the viability of your planned wine bistro:
Track the Growth and Number of Wine Bistros in Your Area
A decreasing number of firms may be an indication of weakening demand, while an increasing number may mean that the market can still absorb the presence of similar businesses.
Research online to see if there are any new wine bistros opening; or if the old ones are closing shop. Make a list of the wine bistros in your area and regularly check whether these businesses still exist or not. Better yet, track their activities on the Web as well as the reviews they get from sites such as Yelp. Create a spreadsheet that lists down and compares the features that other wine bistros offer. Knowing what they offer (or not) can help you identify ways that your wine bistro can rise above the competition.
To a limited extent, you can also check the Yellow Pages to see how many wine bistros already exist in your area. Check both the printed and online versions. Call them to find out how long they have been in business. While you’re at it, compare previous year’s edition of Yellow Pages to check if the number of businesses similar to yours has increased, decreased or remained stagnant giving due consideration of the diminished popularity of the printed Yellow Pages.
Shop the Marketplace and Get a Feel about Business Conditions
Talk to other business owners in a similar venture (in a non-competing area) to get their feedback about how they see the potential growth and expectations for their wine bistros in future years. Get as much information about your customers. Observe the following:
- Do the businesses appear profitable?
- Are customers waiting in line and paying high prices? Or are wine bistros in areas similar to your planned location struggling to survive?
- How are the businesses run? What are the typical hours of operation?
- What are the common product lines in the menu? What are the food items served to complement the wines?
- What is mood and ambiance the wine bistros in and outside of your area convey?
- Who appears to be the target market of the wine bistros?
- Are the wine bistros available for hosting any events? If so, what are they?
- What wine events do they host?
- Do they offer live music?
- Do they offer self service wine stations?
Crowded wine bistros can signify that there’s a strong demand, which means there’s probably another room for a supplier like you. The firsthand information that they can provide could be very useful in developing your business plan.
Get Feedback on your Wine Bistro Concept
Talk to friends, relatives, and strangers for their opinions about your business concept for your wine bistro. To the extent possible, survey prospective customers in face-to-face conversations, telephone interviews or mail surveys. Ask them questions such as:
- What makes them go to a wine bistro?
- Will they check out your wine bistro, and how frequent will they visit?
- What price would they be willing to pay?
Ask others in your community what they like and do not like about wine bistros in general. More specifically, ask them what they like and what they don’t like about your competition – from the ambiance and decor, wine inventory, sound system and music selection, etc. Carefully listen for any indication of unique features that, if offered, will provide an advantage over competition. You can position your business to fill a niche that may have been left open by your competition.
Talk to Suppliers
Meet with wine suppliers, which are another source of excellent information. They know what’s selling and what’s not and generally have a good feel for market trends. You may even get some inside scoop on your competitors’ operations, e.g. wine preference of their customers, etc.
Network and Learn More About the Industry
Join industry associations of restaurateurs, wine clubs, Chambers of Commerce, and other relevant organizations. Attending meetings of these organizations will give you a chance to network and get some feedback about the predicted growth of businesses like yours in the area. Your chamber of commerce may also have data about your market, including consumer demographics and the number of competitors in a geographical area. Trade associations are excellent places to locate valuable marketing information.
A word of warning, though: A positive reaction to market research doesn’t assure success. People sometimes say one thing and then act differently. But doing some research offers you a better understanding of the market and gives you a stronger handle on the decisions you need to make.