How to choose your
Copyright Ó 2000 Dien Rice, All Rights Reserved.
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When I first decided I wanted to go into business, the first question that popped into my mind was the thought, "what should I sell?" I know that this is often the case with many people - not just me.
However, a better question to ask at first is actually, "which market should I target?"
To succeed in business, you need both a good target market, and a good product which that market wants. It is much easier (and cheaper) to find a good target market than to develop a product. So, it is best to first find a good target market, then to develop a product for that market. If you do it the other way around, there is a danger that after you have spent all that effort in developing your product, that there will be no market for it!
So, as a general rule, it is much better to choose who your target market will be first.
How do you find a good target market for your products?
A good first step is to ask yourself what you enjoy doing. In my case, I enjoy doing lots of things. For example, I like to play tennis. In addition, I am interested in the skills needed in entrepreneurship, in order to be self-sufficient. And finally, I enjoy investing in the stock market.
All these things have associated target markets. For example, since I enjoy tennis, I could try to target tennis players. Or, I could target people who are also interested in being self-sufficient. And finally, I could target stock market investors.
Another approach is to think of the problems you have which you have found solutions for. In this case, your target a market could be those people who have had the same problems. For example, in the past, I had problems with credit card debt, however now I am very disciplined and no longer have a problem with this. At this stage, as an example, I could choose other people with credit card debt as a possible target market.
It is good, I think, for you to have something in common with your target market. It is much more difficult to try to work at a business where you have nothing in common with your customers. So, in fact, it is best if you fit somehow into your own target market. This will help you keep up your enthusiasm in your business - a very necessary ingredient if you are going to succeed.
So, you should now choose one or more target markets to look at. As an example, I'm going to pick two target markets to consider. The first one will be stock market investors. The second one I will look at are those with credit card debt.
What is the size of your target market?
After you have chosen one or more target markets to consider, think about the size of those target markets. Is the target market large enough to sustain a business which will provide products or services to them? A target market has to be of at least a minimum size to be viable.
In my example, the two possible target markets I have chosen - stock market investors, and those with credit card debt problems - are both very large target markets. In fact, they might be too large, and it might be wise to find a niche within those target markets. Therefore, I might then focus on a particular type of stock market investors, such as stock market investors who like a particular approach to investing (such as fundamental analysis, Warren Buffett-style).
Can this target market afford to purchase products?
My first example target market can clearly afford to purchase products which could be expensive. Stock market investors usually have to have a minimum amount of wealth in order to make profitable investments.
However, my second example - those who have problems with credit card debt - are probably not going to have enough money to be able to purchase an expensive product from me. Because of the lack of money of this target market, it is best to abandon those who have problems with credit card debt as a target market for a business. Without a target market which has money, a business could soon go bankrupt, and of course you don't want that to happen!
Therefore, in the end, I'm left with just one possibility - the stock market investors, and possibly the specific niche of those who like fundamental analysis. This would be a good target market I could direct my business towards.
Now you can think about your product or service!
After you have chosen your target market, then you can begin to think about what products or services you will provide to this target market. However, remember that first you should choose a good target market!