This is the key to setting up your business. You need a strong set of values and beliefs. To help with this you should sit down and ask yourself a few very difficult questions:
Your Techniques
You need to be clear about exactly what business you are in and everything about your business. I was amazed recently to hear a leading figure for Mcdonald’s stating that McDonald’s was in the retail business. On further thought I realized that if people stopped buying McDonald’s meals tomorrow they would still survive. Their restaurants are all placed in extremely marketable locations.
Parker Pens had a meeting a number of years ago when they were trying to compete with cheap pens and realized they weren’t in the "pen business" at all. They understood that their main competition wasn’t Bic, but bracelets. Think about it. When did you last buy, or receive a Parker Pen? I would guess it was some kind of gift, or present. Realizing this totally transformed Parker Pen’s mindset. Instead of trying to cut costs to compete with cheap pens, they spent more and added nice boxes, ribbons, and marketing to help their products compete in the gift business.
What business are you in? If you know what business you’re in you should know who your customers will be, shouldn’t you? Use this fun exercise with a trusted colleague to gain some interesting insights:
1) Write the name of any customers, or potential customers on Post-it® Notes. These customers can be grouped however you want: “Mr. Smith”, “students”, “men with spare money who like football”, “ex-criminals who eat chicken”, etc. List them in whatever way makes this real to you.
2) The next stage is to draw a grid as shown here, and place the Post-it® Notes in the relevant sections. This part of the exercise, in itself, often reveals some interesting insights as you discuss where certain groups of customers or potential customers sit.
HIGH
I
N HIGH INTEREST HIGH INTEREST
T LOW DISPOSABLE INCOME HIGH DISPOSABLE INCOME
E _____________________________________________________________
R
E LOW INTEREST LOW INTEREST
S LOW DISPOSABLE INCOME HIGH DISPOSABLE INCOME
T
LOW ___________________________________________________________ __ HIGH
DISPOSABLE INCOME
3) Having completed this, focus on the right hand side of the grid. These are the people with the money. The people who are highly interested and have high disposable incomes should be customers already — if they’re not, make sure they are tomorrow.
4) Next, focus on the group with high disposable incomes who are not interested. What would it take to interest these people? Do they know about you? Where do they go? What do you need to do to get them to hear about your product?
5) Take notice of the people on the other side of the grid and keep them informed — especially the group with low disposable incomes — who knows, they may get money soon, but don’t spend too much time and resources on them. You simply can’t afford to.
This simple, fun process should help you target your marketing. One other point: you need to repeat this process regularly — people move and new customers emerge — it’s very useful.
So, are you still thinking of starting your own business? Still seems a good deal to me. HBM
Byron Kalies is a Liverpool-based writer with 13 years' international experience as a management consultant. For more information on Byron Kalies, visit www.byronkalies.co.uk.
Previously published in the February 2007 issue of HOME BUSINESS® Magazine, an international publication for the growing and dynamic home-based market. Available on newsstands, in bookstores and chain stores, and via subscriptions ($15.00 for 1 year, six issues). Visit
www.homebusinessmag.com