Once you’re clear on the difference between an intriguing idea and what may be a genuine business opportunity and you’ve chosen what product or service you will offer, it is then time to carefully consider who your customers will be.
The entrepreneur must define the customer well, by using demographic and psychographic (lifestyle) data. The more specific the customer profile that is created, the better the ability to deliver what the target customer wants and will pay you to obtain.
When an entrepreneur fully understands who the customers are, then he/she can understand what compels them to buy, how to sell to them (on line or bricks and mortar?), how to market to them, how to price the product and how much time and money it will take to win those customers over.
This is why it is always preferable to enter a business in which you have experience. The best way to know customers is by talking and interacting with them. That allows you to tailor your services to meet their perceived needs and expectations.
If you’ve already done business with your target customers, you will have a significant advantage and are better positioned to create a profitable venture.
Be sure to flesh out your customer info by speaking with others who do business with your target customers. Suppliers and Freelance vendors can provide lots of useful info. Speaking with your competitors will likewise be very helpful.
Visiting conferences and trade shows that are frequented by your target customers is a smart move, as those are forums where information is shared. Competitors may be more forthcoming in these settings.
Analyzing the competition will be a key success factor for the business. This is how you’ll find out what customers want from businesses similar to your own, what benefits they think they’re getting and what price they’ll pay to have what they want.
A thorough competitive analysis allows the entrepreneur to refine the market niche and identify additional competitive advantages. Good competitive info sets the stage for your marketing and sales strategies.
Visit the stores, the restaurants and the websites of your direct competitors. Check out where and how they advertise. Study their message and methods of interacting with target customers. Are your competitors making money? How do they make that happen?
Make sure that you have a critical mass of advantages that will improve your chance of success, be it a hot product, strong relationships with target customers, experience in the business, influential friends or a healthy budget to spend on start up costs.
You probably don’t hold all of the cards, but before you take the leap make sure you have enough to give yourself a good chance of winning the game.