October 15th, 2009 | 
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I’m attempting to put together a business plan for a taxi service. There is competition in my local area for such a service. What is the best way to “gauge the market”? I will need a source of capital for this venture and I want to be as thorough as possible when drawing up my plan. I think I have a good idea (this will not be your run of the mill taxi service) but I want to be smart about assessing the feasibility of the business model. How can I figure potential earnings or the demand for this service oriented business?
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Posted in Small Business
I suggest grunt work. Figure out where your target customers are most likely to be at (bars, theater, airport, hotel, etc.) and go there day after day and count how many people use taxis, how many people per taxi, and over what period of time they used taxis (you might find heavy taxi use between a certain time period). Then, after you have several days worth of data, extrapolate. Figure out how much revenue was generated in the days you watched, and calculate how much that is for the whole year (if it was $1,000 in one week then $1,000×52= 52,000 market.)
You can also pay for the market information. There are companies out there that collect that kind of data, but it won’t be cheap.
Best of luck!