No one can afford to target everyone, it doesn’t make any commercial sense and for a start-up it isn’t realistically possible. You need to be clear of who your target market is from the beginning and who you’d like to target towards so you can tailor to their needs.
To effectively compete (with large companies and other companies), you need to find yourself a niche market which is a specific segment of the market who has specific needs. Target marketing doesn’t mean you exclude everyone else but it means you can tailor your products/ service more suitably to fit in with one aligned brand message. This way you can use less money to more effectively reach potential clients and generate sales affordably.
Know your competitors
You need to know what you’re up against to win. Have a clear idea of who your competitors are, what they do, how do they do this and how this compares to what your company has to offer. Do a SWOT (Strength, Weaknesses, Opportunities, Threats) to find out what they do well so you can imitate them, or what they don’t do well which could reveal an opportunity in the marketplace for you.
Start your research by using public websites such as Companies House, their company website and financial databases. You could also look at what their customers have said about them in the form of reviews and feedback. The more you know about them, the better chance you have of winning the race. This shouldn’t just be done once when you start your company but regularly to maintain your competitiveness and gauge as much market share as possible.
What do your potential customers think?
So you think you’ve found a gap in the market and a product/service that your customers will love. To be certain of this and to perfect your company before you launch it, is to go out there and ask the opinions of the people you will be selling to. What do they think about the product? Would they buy it for the price you’re offering it? How would they like it to be presented? They may offer suggestions the product could be better, or they may like the product but think it’s too expensive. You may then have to go back to the drawing board and think about how you can cut down your costs and improve your offer. There could be lots of criticisms but could also be lots of praise. Listen to what your potential customers are telling you as it could be the most valuable lesson you learn.
A great business idea
Great ideas are at the core of all successful companies. You may have spotted an excellent gap in the market which no other company has done before, if this is the case, then brilliant. But take a moment to stop and think why no one has put this idea into action yet, someone out there would’ve thought of it before too. Is it because there isn’t a market for it, the company isn’t feasible or maybe simply no one has had the determination yet.
You could’ve thought of a better version of an existing product /service or something which compliments an existing product/service. Whichever it is, you need to find your USP (Unique Selling Point), something which will make customers come to you instead of your competitors. What makes you so special and differentiates your company; this could be based on price, features, location or promotional strategy.
Decide where you’ll be based
The premises of your company, whether this be your office space or retail space will be your biggest overhead. To stand a better chance of breaking even and gaining a return on your investment, you must minimise your start-up costs and running costs. Depending on the type of your company, advancements in technology now make it easier than ever to operate your company from home, a phone and the internet could be all you need.
If it is critical to rent a location, then start searching as early as possible and be aware of the property market in that area. Do you need to calculate footfall? How much space do you need? Is it an office space or retail space you want? Research on Rightmove.co.uk and sign up to several estate agents, make sure to negotiate with prospective landlords to get yourself the best bargain.
Work out your start-up costs
Know very clearly and realistically how much you’ll need to start up your company and the funds needed to run the company before you start seeing a return on investment. For the first six months or a year at least, you may not be able to pay yourself, so keep this in mind as to have enough cash flow to keep your personal life going.
Do you have enough savings yourself to do this or will you need to look at other options such as borrowing money off family or friends or a bank. Explore the loan options you have and compare these to get the best rates and offer. Buy only the essentials and explore second hand options which may offer good quality furniture or equipment for a fraction of the price.