Financial Resource

Many small business owners forget to identify and define who their target market is, which hinders them from completely capitalizing on consumer buying. In order for small business owners to be successful they must have a clear understanding of who the consumer is, what their needs are and their purchase behavior.  If small business owners have a complete understanding of whom their target market is, it will encourage customer retention, help define their business niche, and allow them to market their products in a profitable way.

Small business owners must identify their target market by demographics and not by a broad spectrum. The more they know about the target market the more they increase their chances of success.  If small business owners can’t identify their target market, they increase their risk of failure and prohibit the business from being consumer focused. Small businesses that don’t understand the importance of being consumer focused suffers from limited growth potential and they risk wasting money and valuable resources on marketing to the wrong consumer. It’s not a smart business practice for small business owners to assume that all consumers are alike. This assumption prohibits small business owners from finding their place in the market.

When researching their target markets small business owners must be specific when defining their consumer. The biggest issue small business owners have when finding information about their target market is information overload. There is a wealth of information on the internet but knowing what information is needed can be a hang up for most small business. In order to minimize getting drowned with useless information it is best for them to come up with research questions that can guide them through their research. They should compile a list of questions specifically related to their business and target market.

Small business owners should be well informed about their target market demographics such as age, gender, income, education level, occupation, family/household size and region/geography. If a small business owner plan is to offer affordable daycare service to single mothers who can’t afford it at the full price then the small business owner target market should reflect that. If the small business owner defines its target market as women with kids, it would mean that their service is open to all women with children of all ages. With this broad defining of its target market the small business owner wouldn’t be fulfilling its original plan of offering affordable daycare service to single mothers in need. However if the small business owner redefined its target market as single mother households with incomes of ,000- ,000 who have children between the ages of 6 mos.- 11 years of age, it will allow them to really impact the market and target a specific group. This not only helps small business owners define their target market but develop their business niche.

It would be wonderful if all small business owners could do everything for everyone but the truth is a small business can only do so much.  If small business owners settle on servicing a specific part of the market they can increase their chances of success. All major companies have a specific target market, for example Wal-Mart brags about offering low prices that help their customers live better lives, which are directed toward bargain shoppers in a target market of low to middle class families. They market and offer products to a specific group and because of this it have been a big key to their success.

Small business owners must take note of the importance of understanding their target market as a necessary part of the start up process and that it shouldn’t be ignored. Before potential small business owners begin business they should invest the necessary time in a thorough research on defining their target market. By taking the necessary time to identify and define their target market, small business owners can reap the benefits that will help sustain their business. It will eliminate wasteful cost and time spent marketing their service or product to the wrong consumer.  Small business owners must define their target market by demographics and avoid general classifications. Small business owners who have a clear understanding of who their target market is will benefit from increased profits and customer retention.

(c) Copyright- Dawn Austin. All rights reserved worldwide.

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