“The ability to find information when you need it and then act on it is what gets things done.” Anonymous If you are starting a new business, before you rush to the bank or mortgage your home, can you answer these four basic questions: 1. Who are my customers? 2. Where are they? 3. How many are there? 4. Will they buy from me? If you are at a loss for any sense of answers, trusting to gut feeling, or lady luck, you may be doing more dreaming than fact-finding. Are you aware that new business failure rate is most often caused by ignorance about the market? Successful entrepreneurs understand that acting hastily and on hunches most often results in problems not profits. 1. Who Are They? Before you sign a lease, order inventory, or file incorporation papers, you will be wise to know who your customers are. Otherwise, how do you develop a sales or business plan? Can you visualize your average customer? Are they business firms? Are they government agencies or institutions? Are they consumers? If so, what are their ages? Are they married? Is it important? What are their interests and or hobbies? What education levels do they have? What profession or occupation is most common? Are religious or political ties important? What habits do they have? How do they spend their money? What do they want from life? Do they have children? These are questions you may not have all the answers to- but you should have some understanding of who you will be trying to attract to your business. But, if you have not crystallized your thoughts about your customers, do so before planning any advertising or promotions. Attempting to appeal to the wrong market or customers will not work! All that you do in creating your business must be done with your customer in mind. 2. Where Are They? Even if you know who they are- you should know where they are. If you do not, how are you going to contact them? Do they live in a specific area or town-city? Are they city-dwellers- suburbanites- or farm-folk? Are they clustered, or widespread? Are they local, regional or national- even international? No matter what type of business you are building, your potential customers have addresses. You need to know that! How else do you develop an effective advertising or sales campaign? “Where are they” means understanding their media habits so you can reach them. What do they read? Which newspapers? What magazines? Are any special interest publications they favor? When do they read? Do they bother with local papers and “throwaways”? Do they pay attention to circulars and posters? What is their opinion of “occupant” mail? Which radio and TV programs do they tune in? When do they listen to the radio or watch TV? 3. How Many Are They? How big is your market? Will it support your new business? Estimating the size of a market can be a very difficult task. Unfortunately, the answers may be no more than educated guesses. If your product or service is new and unique, forecasting the demand with accuracy may be near impossible. Your hunch may be right, but attempt to verify it. Be cautious of too much reliance on “feelings.” If after your research, you find your estimate of the market is smaller than your original projections; re-think your plans. Do not base your expenses and overhead on markets that will not support your business. Plan your business in relationship to the size of your immediate potential market. Long-term forecasts and plans are fine, but you will need a short-term success to stay in business. 4.Why Do They Buy What They Do? It is not enough to know who, where, and how many -- if you want them to buy your product or service- you must know why they buy what they do. What motivates their buying decisions? Is it price, quality, status, fear, service, security, or some other reason that triggers a positive buying decision? Is there a prime motivating force you can tap? The reason a customer buys a product is not always visible. Some are quite complex, some are unconscious, and some we prefer not to admit. Advertising professionals schooled in psychology and consumer behavior know how to tap our emotions to spur us to action. They know how to appeal to our fear of disaster and loss- smoke alarms and fire insurance. They know how to touch our greed with ads for commodity options. They tell us if we change our hair color, we will find love and romance. Any business that ignores the reasons (conscious or unconscious) why customers buy is in for a struggle not success. As you spend weekends an nights planning your new business, before, yes before, you make any irrevocable commitments, think about these four questions and ask yourself if are you comfortable with your answers? Dr. Paul E Adams, Professor Emeritus Business Administration Ramapo College of New Jersey Author “ Fail Proof Your Business: Beat the Odds and be Successful.” Available at Amazon.Com If you have questions about your business- contact me: drfailproof@earthlink.net