5 questions you must clarify before starting your business
July 15, 2014
"Hi Ian, I would like to seek your advice on how best to launch my new business."
I received this request recently, and although I had wanted to point the writer to a previous post, I thought I might just reiterate the key points. So I reproduce my response here for anyone who wants to start a new business venture.
I am very happy that you have asked me about setting up the business. I cannot say that I am a veteran but I do have one or two pointers that I can share with you. It applies to your focus, but it really has to do with other businesses too, by and large.
Here are 5 questions you need to ask yourself in this order:
1. Who is my target?
I know your product can serve everyone but does everyone want your product? There are already many people offering what you are in many different niches. What you need is to identify who you can best serve, and how they are currently being served. What need are you fulfilling by offering your product? The clearer you are about your target market, the better it would be to find them.
2. What is the approximate market size?
You don’t need to know the precise number but you should also have a sense of how many people are in this niche, and how many will buy from you. Notice the underline. The key is to have a sense of their demand for the product and their ability to pay for it. If you have a product that costs $40 and they won’t even pay more than $20, you don’t have much of a market!
3. Why your product?
Once you know your target market, you need to answer why they would want your product. What can they do with it? Why would they be better off with it than without it?
4. Can they get the same results elsewhere?
What are the substitutes in the market that can provide the same results as your product? How similar or different are they to yours? The more alternatives there are out there, the more difficult it is to create your market. Hence, you must know your competitors, how much they are offering the same solutions for, and how you can be totally different. You will certainly need to create a totally unique experience for your target market if you want to attract and retain your customers.
5. Finally, why you?
This is the ego-busting question. Many of us think we have the best product since sliced bread and we are the best people to deliver it. Many a times, that is not true. “Why you?” is a question designed to get you to identify what differentiated value you bring to your niche. What makes you so different that people will jump through hoops to work with you? You have to be so unique that competitors cannot replicate easily and customers flock to you.
So there you are. 5 questions. Answer them truthfully and as completely as possible and you will already know how to start. If you are unclear about the answers, you need to research. The worst thing is to do something without fully understanding your market space.
Hope this helps. Let me know if you need anything else I can help you with.