So You Want to Start a Business – Knowing Your Market

Knowing Your Market

What is your business mission statement?

While the importance of a business mission statement (and how to write an effective one) will be an entirely separate blog post, it does at least deserve to be mentioned briefly here. A business mission statement communicates your values, provides direction in working towards a single, unifying purpose, and functions as the bedrock or “core” of any organization.

You mission statement should have at least three components: (1) your target audience, (2) the product or service you are selling, and (3) what makes your product or service unique. It must be action-oriented (so, rather than being focused on “who we are”, the statement itself should focus on “what we do”).

But remember: there is no one right way to write a mission statement. You mission statement can be a couple sentences or a couple paragraphs.

What is your business name? Is it available to trademark?

Take some time to consider what your business name is or should be. Is it sufficiently descriptive? Is it too similar to another name in your industry? Is it easy to pronounce or remember? If you want your business to be around for at least a few years, is this a name that you will still be proud to use in five years?

One thing to consider is whether the business name is already in use. If a name is already in use, you will not be able to register your business name with your state authorities, obtain a federal trademark for that name, and you will run into difficulties when it comes to developing a web page and a consistent social media presence. It can be confusing to consumers when a business has a slightly different name across different social media platforms. So, when at all possible, try to go with a name that is available wherever you plan on doing business.

Who is your target market?

What does your ideal customer look like?

It can be helpful to sit down and describe the different types of customers that you think would benefit the most from your product. For example, if you are starting a residential eco-friendly cleaning service, your ideal customer (1) has the financial means to afford a regular cleaning service, (2) values eco-friendly products or tries to live an eco-friendly lifestyle, and (3) likely does not have the time or energy to clean their own home. Try to be as specific as possible. Is your target market male or female? What is their age range? Are they more conservative or liberal? What is their socioeconomic level? What is their education level? What are their interests? Do they use social media or do they read the newspaper? Where are they most likely to shop already? What websites do they likely use?

Depending on the product or service you are selling, some of these questions may be more relevant than others. Nonetheless, try to come up with at least two, but ideally three different “types” of customers that would theoretically purchase your product or service.

This information well help you understand not only where to advertise to your customers, but how to advertise to them effectively to make sales.

What platform will you use to sell your products?

Nowadays, there are so many online platforms that make e-commerce an easy way to sell a product or service.

I firmly believe that every business should have their own website. I’ve written about this before, but websites are important to establish legitimacy, showcase branding, and create a “home-base” for customers that exists on its own – separate from the restrictions and regulations of other platform websites. However, I also know that for some small businessowners, the cost of building and maintaining a website may be too high if they are struggling to make their first sale.

This is where platforms like Etsy and Shopify – while not a replacement for a website – are an excellent space for newer businessowners who are still testing the waters. These platforms do take a percentage of your sales as part of the listing and final sales fees, but they receive high-volume traffic, which takes some of the stress away from figuring out how to direct people to your website.

If you are selling a service, there are still plenty of platforms for you as well! Fiverr, TaskRabbit, and UpWork are all online platforms that allow users to showcase and sell their services. Similar to Etsy and Shopify, these platforms also take a percentage of your sales in the form of a fee (sometimes as high as 20%). But, just like other online spaces, these platforms receive high-volume traffic, which may mean less advertising is necessary on your end – a bonus if you are just testing out whether turning your hobby or skill into a full-time small business is feasible for you.

Will you need a license or a permit to run this type of business?

Each state has different rules and regulations with respect to whether a license or a permit is necessary to run a particular type of business. Always default to the rules governing the jurisdiction in which your business is physically located or the geographic location in which your business operates.

Generally, all small businesses need some kind of license to legally operate. In fact, you may need more than one business license (i.e. local, county, state, and federal – again, depending on where you are located, the requirements are different across the country). There is one important caveat: if you are not using your online platform as a business storefront and you aren’t making notable profits, you don’t have to worry about getting a business license. However, it is something to consider if you plan on expanding your business outside of, for example, Etsy or Fiverr.

You’re Ready!

If you have been on the fence about starting a business for some time but have been held back because it felt overwhelming or you just had anxieties about the unknown, having concrete questions to answer have hopefully provided some clarity for you. At the very least, know that if you have made it this far in the series and have answered these questions, then you are ready to start your own business. It is okay if you still have questions – in fact, leave them in a comment below and I may feature your question in an upcoming blog post! If you don’t have questions but you are ready to start your own business, then feel free to schedule a consultation so that we can talk about next steps for you and your business.

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