When you first imagine your business it is important for you to determine whether or not your business actually fills a need or a want in the market. The reason many businesses fail in their first year is because the entrepreneurs failed to realistically define the market.
This happens because a market was hot a year ago and is cold now, or because the entrepreneur failed to do any market testing because they were in a hurry to get rich or they were “feeling lucky.” One of the hardest realities to face about making money is, it is not about your expectations; it is about supplying a need for a demand or an emotional want.
Make Sure You Have a Business Plan
It does not matter what type of business you have, it is crucial to anticipate the needs of your customers or clients before you make a single move. In fact, the actions that you need to take to research your customer’s needs should be detailed and written out step-by-step. The purpose of this explanation is to attract investors and to give yourself and any colleagues involved an idea of the solid, critical path that you intend to follow to make money. In that business plan, you should also note what you are going to do (your Plan B) in case your business fails to attract your anticipated customers. Keep in mind as well that even if you are not looking for investors at this time because your business is small, it is important to write out a business plan that serves as an outline and timeline that reminds YOU of the moves that you will make in the near future.
A few key things that must be in your business plan include:
- An exact definition of the problem or need that your business fulfills
- A list of the benefits that your business offers that would make your customers buy from your rather than the competition
- A description of how will you attract the initial customers and what ploys, price-points or offers will be deployed to keep them coming back to your website or front doors again and again
Note that a lot of the questions that you are answering within the context of the business plan will also give you an opportunity to analyze your competition and devise ways that your new company can trump them. Kindly refer here to learn more.
It Can Also Be About Wants
Filling a need in a market is the most lucrative and solid way to make money because you are running what is considered to be an “evergreen” business. An example of an evergreen business is a grocery store because people will always need to eat. The so-called “find a need and fill it” businesses can be successful but they are also very common. In businesses such as food, transportation, clothing and repair, competition can be so keen that you cannot price yourself low enough to stay in the game.
This is where it might be valuable for you to consider a business that is based on emotional wants, rather than needs. These tend to be the niche businesses that sell goods that make people feel good about themselves such as gourmet food, exotic perfumes, music, books, art and fashion. The key here is to create a sense of urgency and demand and to convey a sense of exclusivity for the customer. They return again and again to your store or website because they feel that they are a member of a special club.
Defining Your Ultimate Customer Experience
Imagine that your customers are like tourists taking a trip to your shop or online venture. During every step of the transaction, you basically want to give them an efficient, fast and fun experience that has them reporting what a great time they had to others. If you can offer them the shopping equivalent of some kind of odyssey that fulfills both needs and emotional wants, you will have it made!
It helps to put yourself in your customer’s shoes and then go through the typical process of visiting your store. How do you like to be treated when you shop for your product? Do you prefer any special type of lingo to be used or expertise to be in place? What is it about your site or real-life business that makes you more authentic than the rest?
Another interesting thing to note about the customer experience is that not everybody is looking for the cheapest price, especially when it comes to gifts or certain types of personal services. It is important to do research to see how much people are willing to pay for premium products or services before you go forward.
It’s Not About You
The savvy entrepreneur is able to differentiate between reality and the wishful thinking that can sometimes come hand in hand with the entrepreneurial personality. It is quite common for creative, inspired and ambitious individuals to believe that every hunch they have about a market must be correct, when in actuality the market has expired, is glutted or just does not exist. It is also a mistake to think that an untapped market is a moneymaker; there may be a solid financial reason, based on information you don’t have, that explains why nobody has chosen a particular path before.
Ultimately the process of defining your market is not about you and what you would like to buy. It is about serving the needs of enough people so that you can enjoy a healthy return on your investment and garner a great reputation that always has them coming back for more.