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STOP! Are you missing your mark-et?
Written by Aaron
Colman
info@ibasics.biz
http://www.ibasics.biz
I've seen a lot
small firms go under in the last few years.
Most of these were founded by
good, well-intentioned people
that wanted nothing more than to take something
that they
enjoyed and do it for a living.
This can be a good way to
find new ideas, but it's
before you dedicate your life's savings to creating
your life-long dream you really should think about it
from the
perspective of a corporate executive. Sometimes,
the fact is, you're just
not positioned well enough to
get into the market. This doesn't mean that
you should
abandon your dream, it just means that you need to find
a new
approach.
When evaluating different approaches, here are some of
the
things you should consider:
1. How much are customers willing to
pay?
If you customers aren't willing to pay for your product
or
service offering, you're going to be fighting an
uphill battle.
While it's possible to succeed with low-ticket sales...
you should be
prepared to focus primarily on a quick,
high-volume sales process as opposed
to a more lengthy
sales process. This works especially well on
consumables
like food or clothing, but wouldn't work at all on
major
contracts.
2. What does it take to satisfy those
customers?
Customers can be very demanding. What does it take to
make
them happy? Are standards for a new product so
high as to price it out of
your range?
3. How much does it cost to satisfy them?
The ultimate
conclusion to the question above. How much
will it cost to make your
customers happy?
4. How big is the customer base?
If you've only
got a dozen customers in the country,
you'll clearly want to take a very
different approach.
Take for instance commercial airplane manufacturers.
The cost of each product combined with the small number
of customers
makes it difficult to penetrate this
market.
5. Is it growing or is
it shrinking?
How many horse and buggies have you seen lately?
Obviously some markets are shrinking, while others are
growing. Getting
involved in a shrinking market will
make it tougher to succeed since you're
going to be
competing with the already established "big fish." On
the
other hand this places extra value on established
market share, so if you
have strong enough competitive
advantage it could become especially
profitable.
6. What kind of competition is there?
If you've only
got a few small name competitors then
your branding efforts will be greatly
leveraged in your
favor. However if you're competing against large name
firms, then you're fighting against the grain. For this
reason a large
number of companies have found it
profitable to commoditize the market by
flooding it
with a large number of generic alternatives.
The best
example of this is your local supermarket. How
many brands of toothpaste do
you see? While it's likely
that this'll reduce the price point per item, if
you
can gain the trust of an established distributor or
find another way
to efficiently market to a consumer
audience then you'll be able to turn the
tables against
the established brands and gain market share.
7. How
big are the barriers to entry?
So you've got this great idea. The only
problem...
there are a dozen other companies just like the one you
plan
to start. USP (Unique Selling Proposition) or not,
you're going to find it
very hard to break into this
new arena.
Not only should you find out
how much it's going to
cost to get in, you should be find out if this entry
is
sustainable. Your competition is going to react... the
question is
how. Can you keep up the fight? Can you
turn the tables somehow or will you
find yourself
outmaneuvered at every turn?
Furthermore, how quickly
can you get in? If you can get
your foothold quickly enough then you may be
able to
establish your niche before anyone notices.
8. Do you have
any kind of unique resources for this
market?
A resource
is:
Anything that you own or can control
Something that makes
you stand out from the crowd
Something that can be counted on, is
reliable and
sustainable.
Something that helps you satisfy
the customers.
--- Some examples:
Distributor
channels
Cost advantages
B2B
relationships
The Public's perception
Licenses
or rights
Technology or patents
Unique
skills
Now that you've had a chance to look over the questions
and
hopefully evaluate your own ideas... you've had
some new thoughts on how to
make your ideas unique.
It's time to put those thoughts to the test and
go
forth with a new
perspective!
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Aaron
Colman helps you create results on the net,
and specializes in web design and
custom script work.
My eCourse - Learn Mastering Internet Lead Generation
at http://www.ibasics.biz/leads
---------------
Custom
PHP, Perl and MySQL work with an eye
on security. Commissions paid for
referrals.
http://www.ibasics.biz/reseller.php
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