As a business consultant, I am often asked how a person should take their idea and turn it into a business. When faced with this seemingly simple question, I almost always reply with three questions of my own. These questions are focused on product, customer, and organizational strategy.
How will your product/service solve your customers problem(s)?
Clients are always excited about their product or service they want to bring to market. However, the focus is so intent on their product or service that they often forget about how the product or service will solve their potential customers problem. In order to ask you this question, small business owners or potential small business owners need to take the perspective of the customer. By taking this perspective, entrepreneurs will be able to view their business as a customer and align their product or service with the problems the customers have. This will lead to a better understanding as to how the product will meet the customer’s needs and possibly an improved delivery for the product or service.
Who is your target market?
From this question, most entrepreneurs respond that they have a broad target market and their product or service appeals to almost everybody. For the most part, this may be true. However, when creating marketing strategies, the strategies need to be focused on a specific demographic or target market. For example, if a company is selling bottled water, common sense would dictate that their product will appeal to a large market. But when marketing strategies are designed, appealing to a broad market with a single message is almost impossible. From this, entrepreneurs need to identify, specifically, who the message needs to reach. Do they want to focus on increasing sales from athletes looking for natural water? New moms wanting to eliminate added chemicals to their newborn’s baby bottle? Once the target audience is identified, then add campaigns can be created to appeal to that specific demographic. Fortunately, the product will still appeal to a broad range of people. But, their marketing dollars will be focused on increasing sales from a particular group of individuals.
What is your business model?
Once an entrepreneur understands how their product will solve their customers problems and identify, specifically, their target market, then the next step is to create a business model that will optimally bring their product or service to market. Business models include specific steps for taking raw material in creating a finished product. In addition, a business model may also include specific steps that a person or entrepreneur will need to take to implement their service. For example, a possible business model for a plumber could include specific steps on a receptionist should answer a call, schedule an appointment, confirmed the appointment, and create an invoice for technician. By having specific steps identified for each employee position, customers will receive uniformed services by all individuals. This will lead to exceeding customers’ expectations on a continual basis.
Hopefully this information gives entrepreneurs a better understanding regarding three commonly asked questions by novice entrepreneurs. If this article is beneficial and more help is needed for starting your business. Make sure to contact one of our business consultants today.
Author: Paul Borosky, Doctoral Candidate, MBA.