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Author Topic: Market Analysis  (Read 590 times)

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Offline 2StateTrigger

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Market Analysis
« on: March 05, 2016, 11:55:04 AM »
Good morning All,

So I'm in the final phase of deciding to build a sawmill business.  I'd like to somehow do a market analysis of whether or not I should actually go thru with my plans in my choosen market.

Question is:  How does one perform a market analysis?  I have  no clue as to where to start. 

Could some of you please offer up your suggestions?

I would be MOST appreciative....THANK YOU

Best Regards,

Molon Labe

Offline WV Sawmiller

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Re: Market Analysis
« Reply #1 on: March 05, 2016, 07:15:32 PM »

    Hard question. What kind of sawmill business are you thinking about? Cutting and selling lumber would require a continuing source for logs, storage, possibly a kiln or access to one, support equipment, finding what similar sources of lumber exist, and most important, likely customers (Contractors, woodworkers, etc). If you are competing with other presumably successful businesses how will you out perform them? Price? Quality? Delivery times? Hard to find/long delay items?

   If you are setting up a custom sawing business will you be mobile or stationary? If stationary do you have an adequate site with good access and what support equipment will you need? How will you dispose of your by-products like slabs and sawdust? Are there any local regulations to overcome? Licenses, taxes, insurance, etc. How many other similar services are there in the area? How will you compete with them? What do they charge? Can you compete with them on price or can you provide faster, better service? Are you chasing a niche market? Are there customers needing such a service?

    What will be your setup and continuing expenses? Mill, blades, maintenance, fuel/utilities, etc. Are you going to have to hire help, pay benefits, etc? How are your cash reserves to tide you over for the first year or so? Is it a market/business you can ease into or are you planning on an immediate full phase start up?

   Many of these questions can be answered by diligent search of the internet, contact the better business bureau, a few major potential customers and/or suppliers (as applicable).Check the websites of any you find. Check places like this FF to see if others are there providing similar services. Check their websites for services and prices. Check with the sawmill manufacturers. Many, like WM Pro-Sawyer network, Sawmill Trader, etc. may be able to show you some of their customers in the area and services they provide. Look at Craigslist for the area. Check for hobbyist groups in the area and contact them and pick their brains.

   Many more questions but that's a start with the limited info provided. Good luck.
Howard Green
WM LT35HDG25(2015) , 2009 4wd Dodge PU, Kawasaki 650 ATV, Sthil 440 & 441, homemade logging arch (w/custom built rear log dolly), JD 750 w/4' wide Bushhog brand FEL

Dad always said "You can shear a sheep a bunch of times but you can only skin him once"

Offline Brucer

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Re: Market Analysis
« Reply #2 on: March 05, 2016, 08:58:35 PM »
I never did one, but I should have. I made a lot of wrong assumptions. The one assumption I got right was that the local competition was not treating his customers well. Consequently I was able to do well -- but in a very different market than I expected.

There's two sides to a market analysis: What's the market for the sorts of products you might make (or services you can provide)? And to what degree is the established competition supplying that market?

Try doing a Google search for "how to do a market analysis". Don't just look at the first page of the search. When you do read an article, read it all the way through (and follow any links there may be). I found a lot of articles that give general principles but no details at the beginning. Scanning down to the end of the articles there were often some really good suggestions, or links to more detailed information.

Two resources:
 In Canada -
 In the US -

One other thing -- banks and other lending agencies will usually expect to see a market analysis in a business plan. You might not be planning to borrow money, but it's worth checking to see what they expect. Quite often they'll give advice on how to find the sort of information they'd like to see. Also, governments often have web sites directed specifically to small businesses. They often have good information. They may even point you to data that's already been collected.

Some advice given by a very high-priced consultant ...

1) What is your product?
2) Who are your customers?
3) What do your customers need?
4) Rethink what you've just answered and go back to step 1.

Bruce    LT40HDG28 bandsaw with two 6' extensions.
"Complex problems have simple, easy to understand wrong answers."

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