One of the biggest keys that can make (or break) a new small business is its ability to find and retain the key demographic of customer that will help transform it into a valuable and sustainable business, which should always be the long-term goal with any business regardless of industry. Finding and keeping such ideal customers is not something that just happens. No. It takes careful planning and execution, meaning you must target such customers to ensure your products and/or services are customized to their every last need/wish. Targeted, custom-tailored marketing campaigns are key to finding such clients and convincing them to give your business a try in the first place.
But to do any of this, you must know what your target customer is, so they must be defined before you spend time and money launching your business or developing your product and accompanying marketing.
YOU MUST DISCOVER & DEFINE YOUR TARGET CUSTOMER
There’s no way around it, with running a small business being so challenging, owners need all the help they can get to ensure their business lasts through those difficult first years. Therefore it’s absolutely essential to define your expected customer base in terms of who they are, how you plan on serving them, and of course – how you plan to reach them with your marketing messages in the first place. The benefits of defining your customer base are too many to ignore:
You can actually research to determine if there is enough of your ideal customer to support your business. That is, you can determine if your idea is too niche or not niche enough and refine it accordingly giving you better chances of success from the get go in terms of demand.
Learn a bit more about your customers to ensure you meet their biggest pains. This is a bit tricky, but what if your product or service only takes care of half of your ideal customer’s issues or pains? This means there is a large opportunity to grow your business by meeting the full needs of your clients. So get to know them and see how you could retool or expand your services or products to make your company a bigger win for your ideal customers.
Determine which prospects are your most promising and laser-focus your marketing efforts on them. When others see how well you engage with and serve your ideal customer, they’ll jump on board because they want the same thing. But it all starts with your ideal prospects first.
Ensure all of your marketing materials fit the right feel or tone that will appeal to your target audience. If your target audience is small business owners, make sure you have a professional yet approachable marketing plan. If your target audience is teenagers, you’ll need to appeal to them through materials they can relate to. So whoever your target audience is, base your marketing look, feel, tone, etc. on what will appeal to and engage them.
THIS GROWS, NOT LIMITS, YOUR BUSINESS
Many first time business owners worry that speaking to one section of the population will be too narrow of a focus that will ultimately hurt their business or diminish it’s potential. In reality, nothing could be further from the truth. The truth is that the best marketing a small business will ever get is word of mouth from extremely satisfied target customers. They will become raving fans that will cheer you on to success if you approach them and serve them correctly. Remember, as a business owner, your most valuable resource is your time. It’s limited, so spend it on the best customers, the ones that are exactly what you need to grow your business. Too often small businesses don’t survive because the owners spend too much time chasing customers that won’t build their business. So start by talking directly to those who it is most important for your business to reach with its message. The rest will follow.
What’s more, unless you are the one in a thousand business owners who doesn’t have to worry about limited marketing resources when launching a new small business, limiting the scope of your marketing will save you a lot. Don’t waste money on mass marketing or cold-call systems that attempt to reach as many people with your message as you can. Your dollars are valuable. Limit your spending in marketing to customers you are absolutely certain are already likely to buy your services/products so that you’re not pouring money down a whole.
What’s more, test and measure your results. If you are using podcast marketing, a social media campaign, and an advertisement in a local trade magazine, include a way to track which methods are best at reaching your customers. Switch up your approach if you find that some methods are better than others. All the research on your ideal customer to create the perfect marketing campaign means nothing if it never actually reaches them. You need a way to know if this is happening to protect your investment when starting out (and always to be honest).
SOME ADVICE TO KEEP IN MIND AS YOU ACTUALLY GO ABOUT DEFINING YOUR TARGET DEMOGRAPHIC
On the surface, you need to start with some basic biographical information on your target market. This can be called a profile and you’ve probably have heard (or will hear) this term as you get more and more into running your business. Here are some basic information you’ll want to start with as you define your ideal customer:
How old are they? Are they male/female? Single individuals or couples or even families?
How much do they make and what are their spending habits? What type of work do they do? What industry is it in?
Where do they live? What country? What part of the country? What is their ethnic background? What are their political/religious beliefs?
What are their interests or hobbies? What do they do in their personal time? Where are they? What other businesses are they ideal customers for?
Now think through these things and more to create a profile for your ideal customer. Write it up, put it into a document that can be shared with your marketing team to develop strategies to reach them specifically. For example, if you are starting a bridal dress shop, you’ll want to target women in their young twenties primarily. If, however, you are opening a motorcycle repair shop, you’ll want to target males 25 years and older who both ride motorcycles and typically have expendable income they spend on their bikes. These are very basic examples and you should do your own research to determine your customer’s profile.
Lastly, make sure you are as specific as possible. Give too much information, or at least try to. The truth is, there is never too much you can know about your ideal customer. So keep going and get as close to understanding everything about them you can. This is a foundation for every bit of your marketing to follow. By knowing them so well, you’ll know exactly when to reach them with your message and in what form they’ll be most likely to engage with it. So do your due diligence here, you’ll never regret it.
B2B: WHEN YOUR TARGET CUSTOMER IS ANOTHER BUSINESS
These days, an extremely viable business model is B2B, that is being a business that focuses on selling products or services to other businesses rather than end consumers. This can be quite lucrative and provides interesting opportunities for scale with many industries. If you make shampoo, you can sell one bottle to one customer in one sale when dealing with individuals, but if you are making one sale to a hotel chain, it might be more like 15,000 bottles.
Businesses targeting other businesses should still develop a target demographic profile. Be sure to include business-oriented details in your definition, like:
The size of the business in terms of how many employees it has The industry it is in and how big that industry actually is
The size of the business in terms of sales (volume of business) How large the business is geographically—is it one office? Does it serve a region? Is it international?
ARE NICHE MARKETS VIABLE AS A TARGET MARKET?
A niche market is any that is relatively specialized or narrow enough to mean it only appeals to certain parts of the population. The bridal shop we mentioned earlier is an example of a niche market. Instead of simply being an all-purpose tailor, they’ve focused in solely on wedding dresses. Niche markets can be very helpful in getting your business to stand out from others in a crowded marketplace. This can help make you more memorable to your target audience and therefore help build value and profits.
What’s more, catering to a smaller market simply requires less time and costs in terms of resources, so it’s easier to pull off as a small business whose resources are likely limited. As the old saying goes, instead of trying to do everything and doing it poorly, only try to do one thing, but do it well. So your niche is a tool to help you hook in customers who normally would not notice you. So instead of being another breakfast diner in a location that has too many diners already, you may find a better way to capitalize on the strong demand for breakfast dining by opening a donut shop that makes unique donuts. This example is a customer niche approach. It isn’t that wedding dresses or donuts are made any differently from regular dresses or breakfast food. It’s that they are marketed to make them appeal to a niche selection of customers.
Besides this customer niche approach, there are also operational niches. With this type of business, you focus on meeting a need or creating a product that is niche in itself. For example, you could build LCD screens for smart phones.
It’s the product itself that appeals to a niche market: those who make cell phones. Both a customer nice and an operational niche work nicely and can be used to build a valuable and sustainable small business. What’s more, you can use both types of niches. For example, if you are a nailsalon, you can cater specifically to tourists if you are in a tourist destination by offering an incentive like 10% off for those who stay at nearby hotels.
What’s key is to realize that, like with defining your target market, narrow is a good thing, not a bad thing. It helps you stand out, it helps save on costs, and it really saves on your own personal time which is your most valuable resource.
CAPITALIZE ON NICHE MARKETS BY FINDING AS OF YET UNMET DEMANDS
In order to be effective with the use of such a narrow market, you’ll want to do your due diligence to find a niche where the needs are as of yet not being met. The higher the unmet demand for a niche product or service, the greater opportunity for growth your business has. So you will want to think circularly about this whole process in order to ensure you are always right where you want to be with your marketing efforts.
Start with the identification of your target audience. Use all your powers of observation and intuition. Then start actually researching to learn everything you can know about them, including who your competition is as they are also part of your market. Then, after you research their buying habits, etc., take a good look at your ideal audience again and see if you can revise your profile to better meet their needs or own a niche.
Continue this cycle as your business grows. It really never stops, constantly research your target audience and revise your profile to adjust your marketing efforts as needed. But don’t just do this randomly and off your gut. Test and measure everything you do here to have numbers you can track so you know in no uncertain terms if you are increasing or decreasing your effectiveness of connecting with your target audience. Make this an integral part of your business plan to ensure your success and protect the investment of your time, money and efforts.
23/8/2016 0 Comments
It can be a little daunting when you are just starting out in business to figure out which type of business structure to choose from. The fact is there are more than enough to consider to make even someone who’s been in business for years take pause when considering which structure is best for a new endeavor.
Ultimately, your best bet is to sit down with whatever partners you have and a qualified and experienced business attorney to help you decide. If you’re in the greater Miami-Dade area, I’d love to help, so give the Law Offices of Yoel Molina a call and we can get started. Before you do, it helps to know a bit about the different types of business ownership structures you can choose from:
If you are a one-person business and you aren’t registered with the state as an LLC, then your business is a sole-proprietorship. Basically this means that all profits and losses are filed with your individual income taxes and that you don’t really have to do anything special or extra to maintain your status as a sole-proprietorship.
In a legal sense, there is no difference between the business and the owner. The debts and liabilities of one are also the debts and liabilities of the other.
A partnership is in many ways the same as a sole proprietorship with the large difference that a partnership has two or more business owners. No extra paperwork is needed for a partnership. Like a sole-proprietorship, partners pay taxes for the business for their share of the profits when they file taxes. Both are equally responsible for the entire amount of any claims or debts on the business as well.
If you don’t have much exposure, liability, or risk a partnership or sole-proprietorship is probably the best option. As an experienced small business attorney, I always recommend discussing your specific situation with an attorney before making decisions as they may have valuable insight into your situation.
Because they take a while to setup, are difficult to maintain, and costly in comparison to a typical partnership, I typically don’t recommend to my clients that they use this type of ownership structure.However, in certain circumstances it is the most ideal structure.
In a limited-partnership, there is one general partner who is the main creator or operator of the company and one or more limited partners who have invested into the company. The limited partners are limited in that they have little to no control over the day-to-day activities of the company, but they are also limited in that they are not liable for claims, debts or liens against the company. Because of the extra obligations and fees involved with such a setup, I highly recommend speaking with a qualified and experienced small business attorney first.
LLCs and Corporations
Though both an LLC and a corporation are more costly to setup and difficult to maintain than a typical partnership or sole-proprietorship, they both offer added protection to business owners in terms of liabilities and debts of the business.
An LLC also provides the added benefit of having a pass-through tax identity so that taxes are filed the same as with a partnership or sole-proprietorship.
A Corporation has the added benefit of allowing owners to publicly sell and trade shares of their business in the form of stocks.
Deciding which, if any, type of incorporation is right for your business requires examining several different aspects of your business. For this reason, I recommend discussing your decision with a qualified business attorney.
A cooperative is a business owned by its employees or members. Typically referred to as a worker’s co-op, these companies offer all employees the benefits of ownership. There are examples of these all over that provide food and groceries as well as other retail businesses. Though the circumstances are unique, the dream of a company made up of 100% true equals will continue to inspire new business owners to create a cooperative.
If your business works to carry out any educational, charitable, literary, scientific, or religious purpose, it can be classified as a nonprofit. This would mean it’d be tax-exempt. Though most businesses don’t qualify, if your business exists for the betterment of society, then you should look into filing as a nonprofit.
Still have questions?
Please call us for a free appointment with Miami business attorney Yoel Molina in our Miami office at 305-548-5020.
If you’ve been on the internet much, you’ve invariable seen terms and conditions on different sites you use like social media, ecommerce, etc. If you run a website, it’s a fair question to ask: does my website need a terms and conditions page?
While the answer is different for every business and ultimately you’re best off consulting with an attorney (if you think you need to talk to an attorney, you likely need a TOC). Talking to one will help you determine what to include to provide protection for things like how you handle returns, copyright infringements, and of course limiting your liability.
The following are a few concerns that must be considered for your website’s terms of conditions. If you routinely have any of these issues, you likely need a TOC. Here’s what you need to consider:
Do You Handle Returns or Refunds?
If you sell products of any kind, you’ll need to include a section in your TOC that clearly covers how you handle returns and refunds. It should cover things like credit cards, the conditions of a transaction, and any return policies customers must adhere to in order to qualify for refunds, etc.
It’s also good to include a number of disclaimers that state what losses you will not cover or be liable for or offer a return for. Consulting with an experienced attorney who knows ecommerce and your business can help immensely with this.
Do You Work With/Sell to Minors?
There are many special rules that apply when your website caters to an audience under the age of 18 and even more if they are under the age of 13. You can find resources to help you prepare your TOC for minors from the Federal Trade Commission, but it’s best to hire an experience business attorney to help draft this section of your TOC to ensure you are protected.
What Liabilities might you need protection from?
If your site offers any sort of user-created content, chat-rooms, social media interactivity, etc., it’s a very good idea to protect yourself with a section in your TOC that specifically limits the liability you may have in the event something offensive, malicious, or otherwise harmful is posted by a user to your site.
You’ll want to include a disclaimer that makes it clear you aren’t responsible for what people say on your site and that you do not endorse offensive statements, nor can you verify the reliability of any claims made by persons on the site. The wording here is important, so consult an attorney well-versed in litigation.
Additionally, you’ll want to monitor the user-generated content on your site and remove any posts that may cause offense or put your business at liability risk.
Is your website clearly copyrighted?
You might think there is nothing to be copyrighted on your website, but you need to protect your business by making sure you clearly include your copyright on all the information on the website and any trademark you might have.
Still Have Questions?
Building a successful online business is great idea! Protecting yourself with a well-written, thorough, and applicable terms of conditions is even better. If you are just getting started out and have questions, or if you’ve already got a live site and you’d like help better protecting your legal exposures and liabilities, the Law Offices of Yoel Molina are here to help.
Yoel Molina understands how important getting qualified legal advice from a reputable and experienced business attorney who knows the law and can help protect your business is. He has years of experience helping business owners of all kinds of small and medium sized Florida businesses protect their interests and assets both on and offline. So if you have any questions at all concerning your business’s legal needs, our offices are standing by, so give us a call and let us help you today!