July 19, 2010

Have You Done Your Small Business Homework?

"Research is what I'm doing when I don't know what I'm doing."
- Wernher Magnus Maximilian von Braun

Although Business Rules 1-6 required a lot of research, Business Rules# 7-10 also focuses heavily on research. In order to prepare yourself for the ups and downs of small business it is imperative that you are well prepared and learn your industry inside and out. The following three part discussion focuses on how to get the necessary information needed to move your business idea pass the thought process and into action.

Thanks to the internet you can just about find anything you may need to know about your business. But where do you start and what information should you give priority. Business Rules# 1-6 required a lot of work researching the functionality of the business. Now let’s examine past the functional side of the business and focus on researching your market.

Business Rule#7 - Define Your Target Market
In order to be successful you must have a clear understanding of who your customer is, what their needs are and their purchase behavior.  Your target market is consumers that purchase your products or services. Understanding your target market will allow you to design your business with the customer in mind. It will also encourage customer retention and allow you to market your products in a profitable way.

When you begin your journey to research your market, you will find a wealth of information. The only problem is a lot of that information you don't really need and most likely will only confuse you. In order to minimize getting drowned with useless information it is best to come up with a list of research questions.

Below is a list of questions that you can use to start your research list.

  • Who is your target market? (List all their demographics'. e.g. age, gender, income, education level, occupation, family/household size and region/geography)
  • What are the trends affecting your target market? (Examine trends back as far as 3 years.)
  • What are the target market buying habits and/or preferences?

 Think about other things you could add to your research list. If your business is an online business then consider research questions that will give you insight on online shopping.
For example:  What is the most sold item online? What percentage of consumers purchases their beauty supply needs online verses in stores?

Below is a list of resources to help you define your target market.

 At the end of your research create a Target Market Statement that defines who your target market is and all pertinent information regarding your target Market. The statement should only list information that pertains to defining your target market and leave out any ideas or opinions regarding the information found. This statement is a reference fact sheet that can be helpful when developing a market plan.

A sample Target Market Statement:

Business: Kelly's Daycare Center Target Market

Single Mother, 2-5 members household, 21-38 years of age, $15,000-$30,000 yr income, high school graduate, located in the downtown area.

If asked, could you define your target market?
Do you think there is a need to be specific when defining your target market?

"Copyright © 2010, Dawn Austin, Recipe for Small Business, writer, SmallBiz Stew. All rights reserved. Permission granted to reprint this article on your website without alteration if you include this copyright statement and leave the hyperlinks live and in place." 
Enhanced by Zemanta

No comments:

Post a Comment

Did you find SmallBiz Stew to be helpful?

My goal is to discuss topics that will simplify the intricate parts of starting a small business to help alleviate some of the stress that’s associated with small business start-up. Did you find this information to be helpful, if so then please donate. Any amount is appreciated.