Step One in evaluating the prospects of a business venture requires that you know who is likely to become a customer. Here are 8 smart questions that will help you gauge whether you have a viable target market for your enterprise:
1. Who will pay a premium price for my products or services?
- Investigate how much business those who would be your closest competitors are doing and learn what motivates their customers to do business with them and find also pricing info, if possible.
- Assess your competitive advantages: do you possess a “secret sauce” that will make customers do business regularly and pay a little more?
- Assess the value of your personal brand: who will do business with you because they value what you represent and do?
2. Who has already done business with me?
- If your business is up and running, growing your business often means persuading those who are already customers to do more business with you. Which upgrades and extras to your service line might your current customers buy?
- Speak with customers you know well and ask what adjustments in service, features or delivery system would make their lives easier.
- Design a survey and send it out to your mailing list and also add to your website and social media, so that you can get more opinions and validate the findings of the customer Q & A.
- Beta test new products and services with current customers, to gauge their acceptance and refine the concept, packaging, marketing message, delivery system, price point, etc.
3. Am I overestimating potential demand for my products and services?
- Hire a marketing research firm to run a focus group to estimate the size of the market for your product or service.
- Smaller budget holders should refer to numbers 1 and 2 and figure out how much business competitors are doing and if applicable, ask current customers which new offerings would be useful to their organizations.
4. Am I assuming that everyone values what I value?
- Reality test your take on the priorities of your target market by asking them, in face to face meetings or via surveys. Read industry blogs to confirm how customers use similar products and services.
- Find the thought leaders and listen to what they say about the need for what you plan to sell. Without revealing your motive, you can write in and ask questions.
5. Does my business model match my target customers?
- The business model is the blueprint for positioning your venture to make a profit.
- The ideal customer groups for your products and services must receive the right marketing message in the right way. Products and services must be sold in the right way at the right price, using the method of payment that customers expect.
- Design a business model that inspires trust and confidence and is user-friendly convenient.
6. Who are my main competitors and how did they get started?
- Study three or four close competitors and learn the back story of the founders. What competitive advantages do they possess?
- How long have those competitors been in business and what may have changed, or remained constant, in the business environment that allowed them to find success?
- Define critical success factors for your venture.
7. How will potential customers and I find each other?
- Hair dressers, manicurists and employees of consulting firms have the great advantage of being able to steal future clients from their former employers. If you are employed in the industry in which you plan to open a business, start now to strengthen relationships with those customers who might jump ship and go with you.
- Learn how to reach your target customers. Which organizations do they join, which conferences do they attend, which blogs or newsletters do they read, does social media for business resonate with them and where should you advertise.
8. Do you see opportunities to expand your target market?
- Eventually, it will become necessary to find ways to expand your business either vertically or horizontally. Stay abreast of happenings in the industry and maintain good communications with your customers to understand what you might offer in the future.
- Can you create a niche market or two by tweaking what you have, or offering it under another name and advertising in different media?
Thanks for reading,