Where Does It Begin?

Business Concept

Many of you may have thought about starting a business at some point in time. Many of us have thought about a new invention, process or production improvement that we may be able to patent and call our own. Yes, that Business Concept begins with an idea! It arises out of a need of consumers that is not currently being met or satisfied. Just think of the recent immigrant who cannot find the ingredients for his home cooking, or the large size woman who cannot find styles appropriate for her size and occupation.
 
Feasibility or Validation

  

The entrepreneur will look "outside the box" and find a product that will be the answer to unmet needs. But before we can expect to make some money on our idea and build a business there are some things that we must investigate before we venture out and spend our own money and the money of others in order to start a business. Yes, you guessed it, you must do Market Research, and you must search and search for trends, the competition and even your customers. Therefore, a business concept must meet four requirements in order to be feasible:

1. There must be a group of customers willing to purchase the product or product lines featured by the business at the price offered. (Target Market)
2. The market must be large enough to support the business and generate a profit. (Feasibility Issue)
3. The entrepreneur must be able to differentiate his or her product and business from that of the competition. (Competitive Advantage)
4. The entrepreneur must be able to finance the business -- either personally or through funding sources. (Financial Attractiveness)

Target Market

In order to be effective marketers and effective entrepreneurs we must decide to whom it is that we will be selling. Why would someone want to buy our product? What need are we fulfilling when they do buy from us? What is motivating them to buy our product? We can only learn this by studying the consumers we want to sell to.


You Cannot Cater to the Masses


The old cliché says that "we can't be all things to all people". There's another which says "give them what they want!  "We must focus our ideas toward a specific group which has wants and needs for that product which have not been met previously. So we must isolate the consumer group that we will eventually call our customers. We must separate that certain group from the masses. We must segment the market. A market segment consists of a large identifiable group within a market. If we practice segment marketing we recognize that customers differ in their wants, purchasing power, geographical locations, buying attitudes, and buying habits.

Bull's Eye - Focus

Segment Marketing    

The benefits of segment marketing or segmentation are that it can create a more fine-tuned product/service offering and a more appropriate price for the target audience. Segmentation leads to specialization. And specialization leads to expertise with that market. Niches are subsets of the segmented market.

We can segment along several different lines, for example, by ethnicity, gender, age, geographic location, hobbies, occupation, etc.

The benefits of segment marketing are that it can create a more fine-tuned product/service offering and a more appropriate price for the target audience. Segment marketing leads to specialization. And specialization leads to expertise with that market. Niches are subsets of the segmented market.


Niche Marketing

 A niche is a small market whose needs are not being met. Niches typically attract smaller companies. Niche marketers know their customers so well and provide them with what they want that they are able to charge a premium for their products and the customer is willing to pay that premium. Since the niche marketer knows his customers and products so well he is able to benefit by economies of scale. He is able to change his product/service offering because he is watching the changes in the niche market as the niche markets develops over time. The niche segment is not likely to attract other competitors, or the nicher is able to defend itself, and is able to grow and profit from catering to the target market.

Trends

Yaooh! What's Happenin . .?

One of the things we must look at is what are the trends that are happening today?

• What situation is developing where consumers are buying items that are creating a trend?
• What are the needs and wants of today's society and what are the characteristics of that society?
• What is happening in your region or in the United States?

If we are catching a trend from the beginning of the trend, then we can be assured that our sales will be growing with that trend as the trend catches on. Trends last for a period of about 10 years. So, then if this is the case, we can be assured that our sales will be growing and we will be around for 10 years.

 An investor would look at the trends and compare the potential market growth to your sales trend. Are your sales increasing and growing in market share? Are you and your management team capturing the market with your product, and are you capable of maintaining that growth with your expertise and acumen? Would you gain the confidence of an investor or a banker?

Successful Trend Captors

  

Another thing to think about is whether we are able to change the way people do things and add value. Are we making life easier or more convenient for them with our product? (the Service and Convenience or Fast Action Trend). Let's look at Amazon.com. Amazon.com changed the way people purchase books. Consumers no longer have to go to a "bricks and mortar" store to select their books. They merely go to the Internet at Amazon.com and put in a title or author and all the books available are listed as a result of that search. The customer orders the book and it is delivered within a week to their door. You don't even have to go outside! After you read the book, you can sell it on Amazon.com, and you can read critiques of the book and offer you own. With this direct mail ordering format, Amazon.com can afford to offer their products at a lower price than the competition.

  

Think about Starbucks, the coffee vendor. Starbucks started in Seattle, Washington where people were developing and acquiring tastes for flavored coffee. Starbucks' management realized the trend was growing in Seattle and grabbed onto it. Now Starbucks locations can be seen in many cities across the United States and in Europe. Starbucks hit on the fact that Americans were interested in flavored coffees and developing a taste for good coffees. Not only was this taste developing, but Americans were willing to pay the premium prices that Starbucks charges for its richly brewed java! Starbucks created an environment where patrons could read their daily newspapers, read their email on their lap tops while sitting and enjoying their coffee at their leisure.

Do you have what it takes to be an Entrepreneur?

"Success depends on acting on dreams."
  - Estee Lauder, Chairman of the Board, Estee Lauder, NY, NY

From time to time you may have considered opening your own business. But many of us are stumped as to how to start one and what kind of business we should open. Should it be a mom and pop operation or should we purchase a franchise. But before we even start to consider the foregoing we should look at ourselves and consider our lifestyle, education, skill set, and ambition. Performing an introspection and examination of ourselves will determine whether we have what it takes to be an entrepreneur.

There are many traits that go into making a good entrepreneur. Studies have been undertaken to find out what it takes to be an entrepreneur, and the most common traits have been found to be the following:

• Passion/Desire - The successful entrepreneur possesses passion to be one. He burns with desire to succeed. When one is passionate about what they are doing they loose all sense of time and the task is effortless. Launching a new business requires long hours and many challenges.

• Determination/Perseverance - Entrepreneurs are determined. No one can get them to change their minds. They do not give up easily even when it might be wise to do so. They will figure out the path they need to take in order to attain their goals. Successful businesses require time, and successful entrepreneurs confess that it can take 4 to 5 years before the money starts rolling in.

• Responsibility - Entrepreneurs must take on the responsibility of running a business, employing people, paying the payroll, bills and taxes.

• Health and Energy - The demands of starting and running a business requires a lot of energy, stamina and good health to keep up the pace required to make that business successful. Health affects one's ability to think clearly and to handle situations in a controlled manner. Customers and employees need to know that the entrepreneur has the stamina and skills to handle any situation that may come his way. The entrepreneur must also know how to make time for himself.

• Ability to Work Independently - As an entrepreneur you become the chief cook and bottle washer. You are the janitor, secretary, bookkeeper and strategic planner. Recognizing the necessity to do whatever it takes to get the job done to ultimately make the business a success is critical.

• Respect for Money - Many businesses get into trouble because they spend too much money at the outset. Successful entrepreneurs are conservative and careful with their money. They spend on what is necessary and save the rest.

• Ability to Manage Time Wisely - Since the entrepreneur is working with little or no staff and limited budgets, the ability to plan and to prioritize effectively is crucial. It is not uncommon for entrepreneurs to work 70 to 80 hours a week during the initial stages of establishing the business and still leave the office with many tasks unfinished. Good entrepreneurs will utilize the personnel they do employ to their best advantage, and delegate duties and responsibility and enable employees to fulfill their duties.

• Dependability - Do what you say you will do to open the store on time and deliver goods within the time frame indicated. Consumers have come to expect excellent service. And they will expect it from you. Doing so is your competitive advantage.

• Flexibility - "Times they are a changing", and entrepreneurs must be able to adapt to the changing demands of customers and their businesses. Small businesses are able to change quickly and adapt their processes or operations to meet the current demand. Large corporations are not able to do this.

Many people say that an entrepreneur has to be born, but I say that you can be educated to be one. Of course, you have to have it in you to want to excel at whatever you do, and you can read case after case study and pick up the skills and awareness of trends in business to advance and take hold of an opportunity.