Knowing Your Target Market

Being self employed means having to look for your own clients so it is crucial to know your target market, unless you intend to sell a mass market product! I've been told repeatedly the first test of one's idea is to ask, "Who's going to pay for my product/service?" This will test the viability of my plan because the answer to the question will highlight the flaws that need fixing. For instance:

1) I don't have an answer, or have a very vague one, like "anyone passing by on the street and likes the look of my shop ". That means I don't know who I'm selling to and therefore there won't be a strategy to guide my business or build a customer base.

2) If my answer shows that my market is extremely small, so small it's impossible to balance it with the investment I've put into the business, again, it's a flaw. Targeting a niche market when there is already plenty of competition, or my business expense is so high that the numbers don't stack up means my business won't survive.

So whether you are planning to sell your products/services to couples intending to get married in a foreign country, mothers with young toddlers or general DIY enthusiasts, knowing your market is key and research on numbers is the first thing to do.

I used to think people are behave just like me towards products and services, and will only be interested in things I'm interested in and spend money in a similar way. I've since realised almost nobody's spending pattern is like mine! I'm a minority in terms of how I use my disposable income. (For instance I don't normally buy alcohol, don't own a car, don't order takeaway, haven't got my own place nor a mortgage etc.) To find and understand the market I want to target, I can't count on personal opinion and have to try getting into the mindsets of other people, in other words, understand market psychology.

For example, I have an idea to market my services to people who are already aware of their impact on the environment and want to do their bit. So who is my target market? Is the market big enough? I don't know yet because I haven't got data on environmental consumerism, but I know it changes with the times. The recession has probably weakened resolve to put environmental concerns first in most peoples minds. Will I target the London market or the entire country, and what's the cost of going nationwide?

At this point all I have are questions and no real answers, still uncertain about viability and execution. It's as if I want to know that the plan will be a sure-fire success before I invest money and time into it. Ridiculous, but I admit that's what I've noticed myself doing! I've been told by people I'm over-thinking it and should just get on with doing it and learn as I go along. I hope by my next post, I've overcome my extreme risk-adverseness. Off now to the online casino now for a game of roulette...