Before launching any business, smart entrepreneurs carefully analyze the market they are about to enter. Social enterprises are no exception. You will want to make market positioning decisions based on a detailed understanding of possible market niches, customers, and competitors. To do so, you will need to to conduct some on-the-ground market research.
Identify 2 or 3 businesses located in your market that are selling a similar product or service and employ roughly the number of people you hope to employ. This interview guide will help you capture notes (handwritten or electronic) from your business owner interviews. For best results, copy this page into a new workbook and make copies to use one sheet for each of your interviews. Identify potential business owner interviewees who:
- are working with companies not likely to be direct competitors with your business, e.g. those in other regions or serving different markets;
- own or oversee a business – you want information from those who have an overview, especially if you are in an early-stage of your research;
- ideally, have been introduced to you by a friend or colleague – personal connections help pave the way for information-sharing.
Conduct the interview via a phone or in-person conversation – you’ll get much better information than you will if you ask for information via email. Before you talk with your interviewee, schedule a reasonable (not too long!) amount of time for the interview and then honor that time limit. Explain your social enterprise project, and your interest in this type of business and use the questions below as a structure for the conversation. Let your interviewee do most of the talking; listen for cues that you might want to follow-up on now or later. Ask follow-on questions to get input that is as specific as possible – but be respectful when your interviewee clearly does not want to go further on a question. Remember, this person may be helpful to you again sometime in the future if you pursue this business idea.
Specific numbers, especially dollar figures can be difficult to get from interviewees if some level of trust hasn’t been established with them. For that reason, the questions we’ve provided are framed to downplay numbers or delay numbers questions until later in the conversation. Nonetheless, do try to get as much numbers-oriented information as you can (e.g. how many years has this business been going? What did it cost to start? How many employees do you have? How many hours are you open? etc.) You can have greater success getting answers to money-related questions if you have some basic knowledge of the business and have established some interviewer-interviewee comraderie – so don’t ask the money questions first. On the other hand, if you leave the money questions to the end, you may run out of time and miss getting vital information. Our Guide may have more questions than you can ask in the time you’ve scheduled so review and select questions before you start the interview.
Enjoy this process! Getting to know more about a business you may launch can be fascinating and fun.
- How long has your business been operating?
- How long have you owned/ worked with this business?
- What is your current position/title?
- How long have you been in this role?
- Where is your business located?
- What are the business’s main products or services?
- How many people does your business employ?
- Would you describe your business as young/emerging; succesfully growing; downsizing or shifting to a different market; or mature/stable?
- Do you aim to sell to a specific group of people or organizations? How would you describe your business’s typical customer?
- Is the market for your product / service growing? Shrinking? What has led you to believe it is growing (or shrinking)? Do you see your business’s sales increasing or decreasing?
- Have particular parts of the market (e.g.particular customer segments) been more responsive to your sales efforts than others? Do you know why?
- How do you communicate with your customers?
- Is this a neighborhood-based business (does it draw most of its customers from the area in which it is located)?
- What are the main ways you get your product/service to customers?
- Are there aspects of your product or service that make it unique? How do you differentiate it from competitor offerings?
- Are there any new or emerging market niches in your product/service that seem particularly promising?
- Are there many competitors providing this product or service to the same market? Are they increasing or decreasing in number? Are they big or small, local or national, how long have they been in business?
- Who are your main competitors? Do you compete with them on product or service quality? On price? Or other aspects of your offering?
- How does your business deal with the competition it faces?
- What are the 2 or 3 most challenging aspects of selling your product or service?
- Approximately how many (or what proportion) of your company’s employees perform primarily entry-level or low-skilled tasks?
- It would be very helpful to know how your business staffing has evolved. For example, one business reported that in the first year or two, it had 10 employees: 1 manager, 2 shift supervisors, and 7 crewmembers. By year 5 it had grown to 20 employees, 5 of which were managers or supervisors and the rest were crew. Can you give me some idea of how your staffing has evolved?
- As your business grows, does it hire more entry-level employees? Are some of these positions seasonal or are they all year-round?
- Are these entry-level jobs full time or part time? Could there be flexibility to make them full or part time?
- What skills must new-hires into these entry-level positions have? What skills are they likely to develop while in the job?
- How long do folks usually stay in entry-level positions? Is there a minimum amount of time you aim to keep them in these positions?
- Are there any types of work or personal history, personality characteristics, or skillsets that would make it difficult for an individual to be successsful in one of your entry-level positions?
- Do any of your entry-level employees move on to more skilled positions in your business? In other companies?
- What are the 2 or 3 most challenging aspects related to your staffing (at all levels)?
- What level of sales does your business need to generate to cover its costs? Does this affect your pricing? What are your product/service prices and how did your business arrive at these prices?
- Do you aim to generate your sales primarily from one of your products? From one of your markets? Or from a mix? Do you aim for a particular ratio (product or market mix)?
- Is there an in indiustry norm for the percentage of each dollar (in sales) that is needed to produce the product or provide the service (“cost of goods sold/cost of sales”) – what is it? Have you found this industry norm to be true for your company?
- If you can share with me what your company’s annual sales are, that would be helpful. Is your company profitable? If it isn’t, when do you expect to reach profitability?
- Have you found that there are generally accepted pay levels in your industry, for your size business? Entry-level hourly rates? Annual salary levels for supervisors? For managers? Other?
- What would you guess is the minimum start-up investment that would be needed to get going in your type of business? I know that would depend on many factors but maybe you could describe an example?
- Do you have a guess as to the average annual investment needed in addition to start-up capital? Again, even an example would be helpful.
- How do businesses such as yours generally raise start-up capital? What about working and expansion capital?
- How do your customers generally pay – in cash or via credit card? On credit? Are there industry-norm terms for credit accounts (e.g. # days)? Do customers generally pay within the term period?
- What have you found to be the top 2 or 3 challenges in dealing with the finances of your business?
- Does your business require a particular type of facility for its operations (e.g. retail store, light manufacturing facility, warehouse with loading dock, etc.)?
- Does your business have to acquire particular supplies or materials to produce its product or provide its service? What are they? Have you found particularly useful sources for these products or materials?
- Has your business had to invest in equipment to produce its product or provide its service? Please describe the equipment. Did you find particularly useful sources of the equipment? What about equipment maintenance – is that an ongoing need, and if so how do you address it?
- Does your type of business need to make changes in facility, materials, or equipment as it grows? How have you addressed this?
- Have you encountered any significant challenges with zoning requirements or other types of licensing or regulatory issues?
- Are there safety issues involved in the production of your product or service? How have you addressed them?
- Are there adminstrative, accounting, or workflow issues encountered in your type of business that we should know about and plan for?
- What have your top 2 or 3 challenges been in operating your business?
- Thank you! The information you’ve given me is going to be extremely helpful. Knowing what you know about your business – do you think such a business could work as a social enterprise employing people who face job barriers? What do you think the main challenges would be?
- Is there anything I haven’t asked you that we should be aware of?
- Are there any other experts in your industry you think I should talk with?
- Would it be OK for me to contact you if I have follow-up questions?