One of the first steps to business
planning is determining your target market and why they would want to buy from
you.
The following tips can help you clarify
what your business has to offer, identify the right target market for it and
build a niche for yourself.
Be Clear About What You Have to Offer
Ask yourself: Beyond basic products or
services, what are you really selling? Consider this example: Your town
probably has several restaurants all selling one fundamental product—food. But
each is targeted at a different need or clientele.
One might be a drive-thru fast food
restaurant, perhaps another sells pizza in a rustic Italian kitchen, and maybe
there’s a fine dining seafood restaurant that specializes in wood-grilled fare.
All these restaurants sell meals, but they sell them to targeted clientele
looking for the unique qualities each has to offer. What they are really selling
is a combination of product, value, ambience and brand experience.
When starting a business, be sure to
understand what makes your business unique. What needs does your product or
service fulfill? What benefits and differentiators will help your business
stand out from the crowd?
Don’t Become a Jack of All Trades-Learn to
Strategize
It’s important to clearly define what
you’re selling. You do not want to become a jack-of-all trades and master of
none because this can have a negative impact on business growth. As a smaller
business, it's often a better strategy to divide your products or services into
manageable market niches. Small operations can then
offer specialized goods and services that are attractive to a
specific group of prospective buyers.
Identify Your Niche
Creating a niche for your business is
essential to success. Often, business owners can identify a niche based on
their own market knowledge, but it can also be helpful to conduct a market
survey with potential customers to uncover untapped needs. During your
research process, identify the following:
- Which
areas your competitors are already well-established
- Which
areas are being ignored by your competitors
- Potential
opportunities for your business
Assessing Your Company's Potential
For most of us, unfortunately, our desires
about where we would like to go aren't as important as our businesses' ability
to take us there. Put another way, if you choose the wrong business, you're
going nowhere.
Luckily, one of the most valuable uses of
a business plan is to help you decide whether the venture you have your heart
set on is really likely to fulfill your dreams. Many, many business ideas never
make it past the planning stage because their would-be founders, as part of a
logical and coherent planning process, test their assumptions and find them
wanting.
Test your idea against at least two
variables. First, financial, to make sure this business makes economic sense.
Second, lifestyle, because who wants a successful business that they hate?
Answer the following questions to help you
outline your company's potential. There are no wrong answers. The objective is
simply to help you decide how well your proposed venture is likely to match up
with your goals and objectives.
Financial:
What initial investment will the business
require?
How much control are you willing to
relinquish to investors?
When will the business turn a profit?
When can investors, including you, expect
a return on their money?
What are the projected profits of the
business over time?
Will you be able to devote yourself full
time to the business, financially?
What kind of salary or profit distribution
can you expect to take home?
What are the chances the business will
fail?
What will happen if it does?
Lifestyle:
Where are you going to live?
What kind of work are you going to be
doing?
How many hours will you be working?
Will you be able to take vacations?
What happens if you get sick?
Will you earn enough to maintain your
lifestyle?
Does your family understand and agree with
the sacrifices you envision?
post written by: komolafe Oyindamola
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