Growing Small Businesses

Lesson 1: Finding your target markets

Who needs what you produce?

If you're not going to sell, your first step is to find people who need your product or service. This needs a bit of thought. For some businesses, huge numbers of groups immediately come to mind and for others, it is an effort to come up with half a dozen. It's a good idea to go though a kind of process which will help you understand more clearly who your potential customers are and why they need what you have to offer.

Ask yourself the following questions:

• What is my product or service used for - who does that?
• How is it used - who uses it that way?
• When is it used - who uses it then?
• Where is it used - who uses it there?
• Why is it used - who uses it for that reason?
• Who else supplies it - who buys it from them?

You should end up with quite a list of the kinds of people who might need your product. Now you have to personalize it. Knowing that retired people use computers to keep in touch with their extended families by e-mail is useful but very general. You have an intellectual concept of why such people need computers.

Instead, think of people you know who fit the description. Instead of "retired people" and "extended families", how about Aunt Maude who uses e-mail to stay in touch with your cousins on the other side of the country and how about the old guy across the road who you run into occasionally. He e-mails his son in Indonesia.

From this exercise, you want to get a clear idea of the problems faced by people who use your product or service in a particular way. You need a detailed picture of all aspects of how this group of people uses the product or service, in particular:

• the needs that the product or service is addressing;
• how it is solving the potential customer's problem;
• what problems or annoyances remain; and
• how happy people are with the overall experience.

Once you have this picture you can review your list of the kinds of people who might be interested in what you're offering and refine it down to people who have those needs, those problems and who will be interested.

Our recommended resource, "How to Get Big Business Exposure on a Small Business Budget: Proven, Practical Strategies for Increased Growth and Profits," deals with more formal strategies to develop marketing plans and chapter 3 addresses this particular issue.

Of course you haven't sold anything yet. But if you go through this process and identify the kinds of people who will be interested in your product or service, then you're half-way to getting customers you will not have to sell to.

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