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The
personal and household service industry of Canada has grown rapidly over the
last ten years. Time has become a premium for many families so they are
willing to hire someone to get things done. The majority of these new
consumer services are very specific (e.g. dog walking, professional
organizer) and consequently there is very little (if any) industry specific data
available.
For a
general overview of this sector Statistics Canada publishes data on the
Personal services industry. This broad heading includes everything
from pet training services to personal shopping, from party planning to
estheticians. The latest (2003) highlights for the sector can be found at
the Statistics Canada web site:
http://www.statcan.ca/Daily/English/050318/d050318c.htm This
includes basic performance data such as total revenue and operating expenses.
The Daily
link above also includes access to the related CANSIM tables (see bottom of
release). These tables
provide the same data at a more detailed industry level. There is a
charge of $3 per time series for this data.
You can also access greater industry detail through either GDSourcing's Canadian Industry Profiles (http://www.gdsourcing.ca/SBDC.htm)
and/or Industry Canada's Performance Plus database (http://www.sme.ic.gc.ca).
Both
provide more financial benchmarks than the basic Statistics Canada figures
above. For more established businesses you will find a heading that exactly
matches your line of business (e.g. 812320 Dry Cleaning & Laundry Services)
However most personal service entrepreneurs will find their business is part
of the larger more generic industry heading: NAICS 812990 Other Personal Services.
For these
types of businesses you will need to rely heavily on media articles and
reports. Use a
periodical database. You can access one at most public libraries.
Search on
keywords related to the your service and its benefits. Also search on business specific
"lingo". For example many home services that provide assistance with
errands and chores are referred to a "personal concierge services".
In an
ideal world your media search will uncover articles which describe your
target market and identify marketing challenges of key businesses in your
industry. In more cases than not however you will have to glean the
required information from a variety of articles and combine these insights
with your own observations and market expectations. In other words you will need to develop your own target
market profile. To do this consider who will benefit the most from your service
and more importantly who will recognize its value.
Normally
we recommend that researchers ensure their information is strictly Canadian.
For this sector however, we encourage researchers to look at U.S.
periodicals as well. Many of the most innovative home services
originated in the U.S. before they appeared in the Canadian marketplace.
Use the experience of U.S. companies to ensure the success of your own
operations in Canada.
Keep in
mind when you are using American information that if you are planning on
providing a service that is yet unknown in Canada, you will need to educate
your market as to the benefits of your service. Many entrepreneurs are
excited by the idea of being "the first" to offer a particular service
and are surprised when they have difficulty finding customers.
Remember, it is
often easier to attract a portion of an existing
market than to develop a new one from scratch. With a new market you
must convince people to spend money on something they have never even
considered purchasing before. You need to demonstrate the benefit and
convince them of the value. With an existing market, customers already
recognize the value and the benefit and only need to be shown that your
company will meet their needs the best.
Once you
have developed a profile of your "best customer", you will need to
determine how many are located in your local market. The
characteristics of a local market can be found using 2001 Census data. Most
major libraries now have Census publications with Census Tract data (urban
neighborhoods). You can also use the publication FP Markets - Canadian
Demographics for information at a city or town level.
Another
helpful source is SuperDemographics (http://www.superdemographics.com).
This site lets you identify the Lifestyle population groups within a 0.1km to
10km radius of a specific postal code. An example of a lifestyle group
is:
Cluster A: Top Gun Metro.(2.98% of
Canadian households)
Top lifestyle, in management, the social sciences, education, government and
as business owners (2X average). Average income: $129,200; home value
$389,000. Average maintainers’ age, 50, household size 3.1. 75% are English
speaking, preferring Toronto, Calgary and Ottawa. With more than 15 years of
education, they spend 4X average on education, and investments. They travel
3 times the average, golf, ski and play soccer. They have worldly reading
habits.
For a fee
the SuperDemographics web site also lets you access other local data on
spending patterns and Census demographics.
Local
governments can also be helpful in profiling neighborhoods or providing by-law specific information such as numbers of dog licenses.
Beyond
media sources and local demographics look for related organizations and associations.
There are groups
you can contact for even the most specific personal service businesses. Some can be found in the publication Associations
Canada (available in most major libraries). Others can be located by
searching Google. Search on your line of business in quotation
marks and add the word association. (e.g. "dog walking" +association
found the Professional Dog Walkers Association:
http://www.prodogwalker.com/)
These organizations may or may not have any industry data. However all
of them should be able to offer advice on business set up, industry issues
and market growth.
If you
have competition active in your market place use them as an information
resource. First determine how they advertise in your market. Are
they listed in the Yellow Pages? What business heading are they
identified under? What services or qualities do they highlight in their ads?
This will help you to assess their marketing strategy. It will also
help you to identify other competitors in your market (i.e. other companies
listed under the same Yellow Page heading.)
It is
always difficult to assess the market size for most personal services
because they are not included in retail trade surveys and most of the
spending categories in the Statistics Canada Survey of Household Spending are too broad.
To view available categories see:
http://www.gdsourcing.ca/Categories.htm
One way
to get a rough estimate of market size is to use a business directory which
includes revenue size information. Business directories usually provide
more industry sub-headings than you find in standard industry
benchmark surveys and often cover very specific personal services. If you use the directory on the
GDSourcing site you can access individual company information free of
charge. (http://www.gdsourcing.ca/CdnDir.htm)
All you need to know is the full postal code of your competitor. You
can get this from the Yellow Pages online (http://www.yellowpages.ca)
or by using Canada Post's Postal Code Look-up Tool (http://www.canadapost.ca/tools/pcl/bin/advanced-e.asp)
Simply
enter one postal code along with your line of business in the
search criteria. (Use the keyword search or the SIC code look-up feature). Your results list should identify only one business
(the competitor in question). If you click on the "preview list"
icon you can then see
the revenue details of this listing. Clearly this can be a time
consuming process if you have a number of competitors. Depending on your
time-constraints you may find it more efficient to purchase the entire list
of your competitors outright. If you have difficult determining who your
competitors are or in downloading a list, please contact us at
contact@gdsourcing.com.
Once you
have the sales estimates of all your competitors, simply total the figures
to arrive at a market size. These
sales figures should only be used as rough a guide to local competitor
performance. They are based on self-reported sales volumes and InfoUSA
estimates. Use them to identify sales ranges and to determine
your biggest competitors. Do not consider them as actual sales
volumes or an exact market size measure.
Finally
do not forget to speak to people directly in your market and in your
industry (e.g. suppliers). Oftentimes this is the best and in some
cases the only way to understand the true nature of a personal services market and
business. Also make sure you talk to the first customers
who actually purchase from you. As your "first" they likely represent the best
customers of your entire target market. Find out how they discovered
your business and why they chose to hire you.
Personal/household services businesses are unique as the people operating
them. While this makes the sector an exciting one to
participating it, it also makes it a very challenging one to research.
More so than any other business, it requires your own analytical abilities
to stitch together resources. Do not give up if your initial research
efforts are fruitless. Redouble your efforts and perhaps take a
different approach (e.g. research other types of competitors, use alternate
words and phrases in your periodical searches). Persistence is the key
to researching this sector.
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