How to do local market research when planning a business
When you find a pub you want to run, the next step is to start developing a business plan for that site. To get started with this you need to do some solid local market research to explore the business opportunity fully.
Business plans generally have a section called a SWOT analysis. This is where you can explore the (S)trengths, (W)eaknesses, (O)pportunities and (T)hreats related to your pub / business, and where local market research is invaluable. In this blog post we look at how to complete your SWOT analysis using local market research.
Local Market Research And Your SWOT Analysis
In a SWOT analysis the strengths of a pub business will be things like its location, the demographic of the area it’s situated in, the facilities and space available in the pub, and even things like its reputation.
When you take on a pub tenancy you will be able to build on these strengths. For example if the pub has a good reputation for food, it may feasible to increase the number of covers or create an outside kitchen for the summer months. If the pub is situated in a popular residential area with lots of families, you could look to make the pub more family-friendly. Or if it’s close to a sports venue there could be scope to tailor the food and drink offers for sports fans before and after events.
Conversely the pub could have some weaknesses. The local demographic may not provide enough custom, or perhaps the current pub offer is not aligned with the people in that area. The pub may have limited space or a small kitchen, which could make it unsuitable for serving large volumes of food.
Weaknesses can often be opportunities in disguise. If the local demographic does not provide sufficient custom you might explore becoming a ‘destination’ pub where people travel to it from further afield. Or you could align the pub more with the needs of the local residents, making it a more attractive place for them to visit. Your local market research should look at the potential footfall for the pub and the competition in the area, and find ways to either overcome the weaknesses or dial up the strengths.
As you can see the strengths and weaknesses will already highlight opportunities for increasing trade, differentiating the business and driving profits. However, there may be things that are currently not being explored at all, or changes happening in the local area that could provide you with a great opportunity.
Perhaps the pub is not serving any food, but there’s a local business community on the doorstep that would welcome lunches. If they are underserved by other businesses, this is a great opportunity for you. Or maybe there is a development happening in the area for new homes, this could increase your footfall dramatically if you align the pub with what local homeowners want.
There may also be opportunities to do things better than other businesses in the area. Google the competition – other pubs, restaurants, cafes etc. – and see what they’re doing. Use TripAdvisor, Google and Facebook to look at reviews for both the pub you’re interested in, and the competition. What are they getting right? What are they getting wrong? Is there an opportunity to fill a gap in the market or offer a much better experience than currently available?
What’s going on in the area? Festivals, seasonal events, tourism and other local factors can all provide opportunities for the innovative pub operator. Want to guarantee a steady flow of holidaymakers during the summer months; how about running a campsite from the pub garden if it’s big enough? Want to encourage local residents to eat in your pub, what about offering a special set price meal during the local food festival?
Threats to your business can come from the competition, or from changes to the local area. If a new shopping and entertainment complex is being built, this could take trade away from the pubs, shops and restaurants on the high street. Over the years some areas change their demographics. For example in Southampton the university has recently built a large amount of student accommodation on campus that has changed the areas of the city that traditionally housed students. This has had an impact on those businesses that relied on student trade.
Research planning permissions on the local council authority website, look at what the local development team are doing in the area, and also the large employers and organisations (like universities) that may impact your business if they relocate.
The local press is a great place to find out what’s going on. Also look out for resident and community groups to see what is on their agenda; they will often have a better idea of the changes that could affect a pub on a micro level.
Forewarned is forearmed so if you can identify potential threats now you have a chance to tackle them head on. If that shopping complex is due to open in a couple of years, now’s the time to focus on providing a different experience and building a loyal clientele who will continue to come to your pub because you offer something better.
Local Market Research Checklist
Check online reviews for the pub you’re interested in. This will help you identify the strengths and weaknesses of the current business model.
Check out the competition. As well as looking at reviews, go and visit them to see what all the fuss is about. You might get inspiration for your pub, spot a gap in the market, or just get a better idea of whether your ideas are viable in that area.
Research the local authority websites. Find out about any planned development and investment in the area. Speak to the local economic or business team to get an idea of the current and future prosperity of the area.
Look at property websites. Zoopla, Rightmove etc. can tell you a lot about how popular an area is with local residents. From house prices to popular schools, this can help you build up a picture of the local demographic.
Read the local press. Stories featured in the local newspaper or radio station might not be national news but they affect residents and businesses alike.
Join local community groups. Speaking to people in the local community is a great way to find out more about what they want, what they don’t want, and what’s happening in the local area.
Ready to get started? If you haven’t yet applied to run a pub, do it today! By applying to run a pub with Greene King you’re not obligated in anyway, it’s just the first step for all parties to explore the possibilities and start looking for a suitable pub.
If you have any questions about the process, give us a call on 01284 714 497