If your business doesn’t have the budget for custom market research projects or paywalled industry data, not to worry! The Government of Canada offers many free resources that you can use to get a better sense of your target market’s demographics and trends in your industry. These resources are a key starting point in writing a well-researched business plan.
Before you begin browsing through government statistics, you should know and understand how the government classifies your business. Many government data tables and tools filter businesses by their NAICS code. NAICS stands for North American Industry Classification System, and it does what its name suggests, classifying businesses according to their economic activity. A NAICS code can be up to 6 digits in length, with the first two digits corresponding to a large umbrella sector of the overall economy such as manufacturing or retail trade. Each successive digit drills down to represent subsectors, industry groups and particular industries. To find out what your industry’s NAICS code is, venture here and browse through the different categories. You can click on “display definitions” to get a better sense of what types of business activity the government includes and excludes for a particular code.
Now that you know your industry code, you can make use of the many resources available on Government of Canada websites. One particularly useful tool is Industry Canada’s SME Benchmarking Tool (SME standing for small and medium enterprises). This tool allows you to compare your company’s balance sheet and income statement with other companies in your industry. It is useful for estimating the operating costs of your business, such as labour, shipping, and rent expenses. You can split up the data according to the size of a company’s revenue, comparing the balance sheet structures of smaller firms and larger firms operating in your industry and region. The Benchmarking Reports provide a useful guideline for structuring your company’s finances and is a handy tool for start-ups in the process of writing business plans to obtain investment or lending.
Another useful market research resource is Canadian Industry Statistics, where you can find the number of establishments in your industry broken down by province and employment size. You can also find trends for sales, expenses, and capital investment by type of asset over time.
Industry Canada has also compiled a database of searchable trade data, where you can view exports and imports by region, trade partner, product or industry code. Let’s say you’re a new craft brewer looking to expand into the American market. You can use this resource to compare exports of beer from BC to nearby American states. The data goes back a few years so you can get a sense of growing or declining trends in that market’s demand.
A resource that is a little more challenging to navigate but is still very rich with information is CANSIM. Statistics Canada’s Canadian Socioeconomic Database (CANSIM) can be used to get more precise knowledge of the demographics of your market. Here you can find data on descriptors such as income, household size and type, household expenditures, population size, and the age distribution of the population of a region. You can also find price indices for various products and commodities, machinery, and equipment. This is useful for estimating the costs of operating your business as well as gaining a better understanding of pricing trends in your market. Sometimes you can also come across a very detailed industry-specific report such as energy efficient lightbulb purchases or alcohol consumption.
Have we missed listing any useful resources? Which free Canadian market research resources have you found helpful when analyzing your own business environment?