After coming up with a shortlist of business ideas, you now need to see if there’s a market for any of these business ventures. The market does not have to be huge; one of the real benefits of the Internet for small businesses is that it opens up a global audience. This means you can operate a niche site, or specialise in serving a relatively small demographic, and still become a profitable business as you connect with your customers all around the world.
Who is Your Target Customer?
If you followed the steps in the previous chapters you may well be looking at business ideas closely tied to your own skill set, hobbies, or passions. This should make it easy for you to define who your prospective customers are, as these people may be your peers or people like yourself. Specifically, try to narrow down your target customers in terms of:
- Age range
- Geographical location
- Interests and where they spend time (online and offline)
Knowing exactly who your ideal customer is will help you target your promotions more effectively, enable you to speak with more relevance to this audience, and will ultimately result in better sales to this group of people. If you have multiple products/services, you may want to split this exercise up and define the target customer for each specific offering.
A note about geographical location: while you may think you can target the whole world for your niche, it is often better to start close to home and build a following where you know the culture and the language, and can better establish your offer before rolling out a global marketing strategy. You probably have a larger network closer to home as well, which will contribute to free or cheap marketing and PR when you launch the business.
There Are No Truly “Original” Ideas
OK, fine, there may be some original ideas left in the universe, but many of the successful businesses you see today simply found an idea or model that was working in another market, and brought it home. Others saw inefficiencies in existing businesses and decided that they could do it better. That’s OK! The reality is most businesses are poorly run, or have not noticed that their customers want something different. For you to compete, you’ll need to shine in one or more of the below areas:
- Better service to the customer
- Lower pricing
- Higher quality of product
- Better at marketing your product/service
Note: don’t try to compete on all of these aspects. Choose your positioning carefully so that you can offer a Unique Selling Proposition (USP) to your customers that is compelling and makes you stand out. And try not to just compete on price; that’s a tough game to play, as fierce competition may undercut you in the future, leaving you in a position that’s hard to defend.
Who is the Competition?
Time to do some research; start by Googling your business idea and keywords and see what comes up in the organic and advertised search listings. What are these businesses focusing on within their website copy and advertising? Do they highlight price? Service? A quality product? Make a note of your key competition, as you’ll need to keep an eye on these as you build your business. How will you differentiate yourself compared to these businesses?
It’s also worth looking at competitors’ website traffic information using www.similarweb.com; type in any website and you’ll be able to see estimated volumes of traffic numbers, where the traffic is coming from, and how large or small your competition really is.