Defining Your Market
You came up with a great business idea, but you are not ready to do it yet. Before continuing, the next step is to find out who your market is.
You can sell to two basic markets: consumers and businesses. These divisions are very obvious. For example, if you sell women’s clothing in a retail store, your target market is consumers; if you sell office supplies, your target market is businesses (this is called “B2B” sales). In some cases, for example, if you have a printing business, you can market to both corporate and individual consumers.
No business, especially small businesses, is a panacea for everyone. The narrower your definition of the target market, the better. This process is called niche building, and even the largest company is the key to success. Both Wal-Mart and Tiffany are retailers, but their market segments are very different: Wal-Mart caters to haggling shoppers, while Tiffany attracts high-end jewelry consumers.
“A lot of people talk about finding a niche as if it’s something under the rock or at the end of the rainbow, and it’s done. It’s stupid,” “Minecraft: Using Your Specialness to Focus Your Business, monopolizing your market,” Let customers search for you. Good niches don’t just fall into your arms; they must be crafted carefully.
Not only did many entrepreneurs fail to create a niche, but instead strayed into the trap of “full map”, claiming that they can do many things and are good at them. These people quickly learned a difficult lesson. Falkenstein warned: “The bigger the company, the smaller the scale, the smaller the scale; it is highly concentrated.”
Create a good niche market, Falkenstein suggested, including the following seven steps:
Develop a wish list.
Who do you want to do business with? Be as specific as possible – Determine the geographic scope and type of business or customer you want your business to target. If you don’t know who you want to do business with, you can’t contact. “You have to realize that you can’t do business with everyone,” Falkenstein warned. Otherwise, you may be out of stock and confuse customers.
These days, the trend is towards smaller niches. Targeting young people is not specific enough; the target is African American men and youth with a household income of $ 40,000 or more. Targeting companies that sell software is too broad; targeting Northern California businesses, providing online software sales and training, with sales reaching or exceeding $ 15 million is a better goal.
Be clear about what you want to sell, remember: a) You can’t treat everyone the same, b) “The smaller the bigger.” Your niche is different from the field in which you work. For example, the clothing retail business is not a niche market, but a field. A more specific niche might be “executive women’s maternity wear.” To begin this process of concentration, Falkenstein recommends using these techniques to help you:
- List the things you do best and the skills involved in each.
- List your achievements.
- Discover the most important lesson you have ever learned.
- Look for patterns that may reveal your style or approach to problem-solving.
- Your niche should emerge naturally from your interests and expertise. For example, if you have worked in a consulting business for 10 years and have worked in a small family business for 10 years, you may decide to start a consulting business that specializes in small family businesses.
Describe the client’s worldview.
Successful companies use what Falkenstein calls the platinum rule: “Do it with others as you do with yourself.” When you look at the world from the perspective of potential customers, you can determine their needs or wants. The best way to do this is to talk to potential customers and determine their top concerns.
At this stage, your niche should start to form, because of your ideas and customer needs, and expectations to combine to create new things. A good niche has five qualities:
It takes you where you want to go; In other words, it matches your long-term vision.
Others want it: the customer.
This is unique, “the only game in town.”
You are constantly evolving, allowing you to develop different profit centers while maintaining your core business, ensuring long-term success.
Now is the time to evaluate your proposed product or service based on the five criteria in step 4. You may find that your niche requires more business travel than you have prepared. This means that you do not meet one of the above criteria, and it will not get you where you want to go. So give it up and move on to the next idea.
Once you find a match between your niche and product, test your marketing. “Give people the opportunity to buy your product or service, not just in theory, but also in practice,” Falkenstein suggests. This can be done by providing samples, such as sample copies of free small seminars or newsletters. The tests shouldn’t cost you a lot of money: “If you spent a lot of money on the initial market tests, you may have done it wrong,” he said.
It’s time to make your idea come true. For many entrepreneurs, this is the most difficult stage. But don’t be afraid – if you do your homework, entering the market will be a calculated risk, not just a gamble.
Also Read: Business Leaders Creating Growth