When it comes down to it, every business is a local business: from the national chain restaurant employing high school students to the family-owned pet store on Main Street. "Local" businesses capture an ethos of care and support for their communities. For entrepreneurs who want to start a local business, it's important to find a need that your venture can fill, understand the market, and create a unique proposition that resonates with your neighbors.
Start with data
Before you start planning, gather data to help you understand what your community looks like on paper. The U.S. Census Bureau has a tool that shares your community's demographic, socioeconomic, and housing statistics.
This information can give you a broader view of the audience your business will serve and any ongoing trends you can tap into. For instance, you may notice property values slowly ticking up; this can indicate a healthy local economy, good schools, or new investment funneling into the area. Once you have a quantitative picture of your community, it's time to complement it with some qualitative data.
[Read more: Ready to Start a New Business? How to Identify a Need in Your Community]
Review online platforms
Go beyond the numbers to sites like Nextdoor, Yelp, and Angi to read reviews of businesses in your area. These platforms can tell you a lot about what people want and need. Keep an eye out for requests for recommendations or complaints; these can indicate where there's an unmet need your local business could fill.
Getting out and talking to people in the community will help you find an idea for your business as well as validate and promote it.
Research consumer trends
There are many free and affordable resources to help you understand some of the bigger trends going on across the country. Google Trends is one free tool that shows the popularity of search terms over time, revealing emerging trends and seasonal fluctuations.
Pinterest and TikTok also issue relevant, timely trend reports from their user data. Read trade magazines, industry blogs, and reports from market research firms. (Some offer free summaries or excerpts). These resources often provide valuable insights into industry-specific trends.
Talk to people
Local businesses are rooted deeply in the community. They typically employ local people, give back to local causes, and know their customers on a personal level. Building those foundational relationships starts long before you open your doors for business.
Getting out and talking to people in the community will help you find an idea for your business as well as validate and promote it. "Ask about their biggest challenges or what they wish they could improve," wrote Shopify. "Better yet, grab coffee with someone who fits your ideal customer profile. Their answers might surprise you and spark ideas you'd never considered."
Spend quality time in the community
In addition to talking to people, spend time volunteering, going to your local chamber of commerce meeting, visiting other businesses, or simply people-watching. Participating in community events brings visibility to your idea and also helps you fine-tune it.
Likewise, this time investment allows you to assess your competition. Competition can be tougher for local customers. "By researching existing products and services, you can discover opportunities to gain a competitive edge. With timely strategies and tactics, your new business can offer services not provided by competitors and thus generate more revenue," wrote The UPS Store.
[Read more: How to Research Your New Business Idea]
Look for franchise opportunities
Franchises are local businesses, too — someone in the area usually owns them, employs local people, and has the flexibility to adapt to local preferences and needs. A franchise could be a good option if you spot a need or gap in your community but don't need to reinvent the wheel. Try a website like FranchiseGator to search for franchises across different industries and income requirements.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
