Once you finalize your business idea, it’s time to shift your focus to your potential clients. You need to thoroughly consider who will buy or use what you want to sell. Consider these demographics:
- Gender
- Age
- Marital/family status
- Residential location (urban, suburban, rural)
- Geographic location
- Median income
- Veteran status
When you picture someone using your product or service, who is that someone? A new mother? Senior citizen? A person of a certain nationality?
It is hard to be everything to everyone, so define who you want to be to “someone.” What is it about them that will make them want—or hopefully needyour product or service? Why are they your target?
For an existing product or service, can you find data on what your target is already spending annually? For a new product or service, is there something available now that your target market is probably able to make do with, and if so, what is their current spending for that?
What do different government agencies project about the expected change in the size of your target market? Will the size of the group be growing or shrinking over the next 5 to 7 years? You may have high demand for your product or service now, but that might wane a few years down the road. Or the opposite may be true. It may take a few years for your market to mature, but once it does, demand should go through the roof.
Research is not to be taken lightly
You have to know who you want to reach before you can get your business off the ground successfully. You cannot cast your net too wide, and you do not want to focus on such a small niche that your efforts outweigh your profits.
Finally, use your resources. You are surrounded by dozens of people in your family and social circles. Look to those you trust most to help you consider all the angles when it comes to your target market. It would be most useful, of course, if you can pick the brain of someone who might be in your target market—maybe a friend with a new baby or a grandparent. Or you can conduct a focus group to learn more about your market and their reaction to your product and/or service.
You can never have too much information. As your business plan progresses, you can refine the plan and filter your data. But at startup phase, be a master researcher and gather all of the information you can. You’ll likely find that it will guide you through your most difficult decisions.
