A market is any group of people or organizations that will pay for your business or obtain your services. Ask yourself, who is willing to show you the money? Someone may want your services, but they have to be willing to pay you money for it.
Wanting is not buying.
It is essential to ask yourself four fundamental questions:
- Does the market want my service? Don’t just assume that because you have a service or a product that you have a market.
- Is the market willing to pay for my service? As you specialize, you may find you have a service or product that no one wants.
- Is the market willing to pay you for the services? What are you offering and what is going to make you stand out?
- How quickly are your future clients willing to pay you? Payment is a point that is often overlooked. What are your terms of payment? Do you have enough money to keep your company afloat while you wait for payment?
Different types of markets
B2C – Business to consumer. You are dealing with a person for the most part. These situations are usually easier to deal with when it comes to payment, as you don’t have the red tape that is often associated with corporations.
B2B – Business to business. These types of markets typically pay more. The downside is payment terms are much longer, often stretching into 90 days.
Research is a winning investment
Research is the first and possibly the best investment you will make in the success of your business. Research pays off in several ways:
- It will give you a feel for the business you are thinking of building. How rapidly is it growing and how intense is the competition.
- You will understand why and how the market buys what you are selling.
- You will be able to select a target market to concentrate on during the start-up period of your new venture.
Research can be overwhelming
When you start digging into the research, you will probably find that there is more information coming in than you can handle.
To avoid drowning in the details, try to anchor your research on getting as detailed an answer as possible to the following three questions:
- Who should be the target market for a startup? To give your company focus, pick a target market. Your target market can change, but it is important to realize that you can’t market to everyone.
- What does your target market look for when deciding to buy? This can be called a buying checklist. It is a significant part of the process.
- How does the target market buy? What steps does the target market follow when buying what you are selling?
While it would be nice to have a product or service that everyone needs or wants, this is not realistic. By doing the research and picking your target market, you will be able to determine how you will market and reach out to future clients.