Series: How to start your own business in 2019
Do you want the freedom of being your own boss? Or do you want to change the world with your grand vision? Either way, starting a business in 2019 is a great step towards realising your dream. In this series, I will take you through the steps you need to take to turn your idea into a business. We will cover deciding on your concept, registering your company, developing your product, all the way through to getting your first customers, and beyond.
In this article, I will guide you through how to define your ideal customer and how to solve the problem that your ideal customer has with your product or service. It is vital that you get your core concept right before you storm head first into the exciting, but risky, world, of running your own business.
The first, and most important, thing that you need to decide on is why. What is your grand vision? What drives everything that your business does? Purpose-driven businesses grow faster and are more sustainable than those without guiding principles. You may want to help others to grow their own businesses. You may want to free people from mundane work and give them more time to focus on their own ‘why’. Both of these goals are part of our ‘why’ at SwiftCase, and you can see how this is important later on in building our value proposition. Choose your ‘why’ carefully. It should not just be to make as much money as possible, this is just not enough.
Who are my customers?
The temptation when starting your own business is to consider that bigger is better. You have a product to sell, and the more people that you can get it in front of, the better. If only you could show your product to everybody, then you would sell so much. The truth is that you should do the opposite, sell to as few people as possible. Choosing a small market is often called ‘finding your niche’. If you can find the small group of people who want what you are selling, can afford to buy it now and will tell everyone how great it is, then you are on the right track.
You may have heard the phrases, ‘The customer is always right’ or ‘The customer is king’. Now, treating your customers well is vital to growing a sustainable business. Happy customers will tell, maybe, one or two of their friends about your products and services. Unhappy customers will tell all of their friends, and anyone else who wants to listen (including on social media) about your terrible service. However, not all customers are right for your business. Some customers don’t really fit with your offer. They will demand that you make expensive and time-consuming changes. They will harm the growth of your business, as they blow you off course. Qualifying your customers as right for your business is just as important as your customers carrying out due diligence on your fit with them.
Before you begin to try to market and ultimately sell your product, define who your ideal customers are. You may have different groups of people to which you think that you appeal, but in the beginning, keep it simple and select a single group. Who are they? Think about gender, age range, occupation, mindset, family, lifestyle, financial situation, and so on. Build a picture about who they are, and how they can be reached. What media channels do they consume? Which social media platforms to they engage with? How can you get your product in front of them?
What problem do they have?
Knowing your customers inside out goes hand in hand with understanding the problems that they face which you believe that you can fix. Business is about relieving people’s pain. People don’t want dirty clothes so they buy a washing machine. People don’t have enough time to walk to work, so, they buy a car. People don’t want to be soaked in the rain, so, they buy a coat, or an umbrella, or again a car, if the alternative was waiting in the rain for a bus. The problem your potential client, or prospect, faces, may have multiple solutions, for which yours is a competing option, or it may not have been solved before, either way, you must solve their problem.
You may struggle with some products or services to locate the problem that you are solving. Take a scented candle producer. At first thought a scented candle doesn’t solve any problem, they are just nice to have. So, how do we think differently about the problem that the scented candle is solving? You could consider its function, it smells nice. If you have pets or like to cook strong smelling food, then having a nice smell to mask those of the dog or the fried fish would solve a problem. Maybe you lead a busy life and you want to use scented candles to relax in the bath and reduce your stress levels. Alternatively, perhaps you aren’t the end user of the product but instead, you need to find a gift for someone. You want the gift to be thoughtful and for the present to look well-presented, but you don’t really know what to buy. I wonder, how many scented candles are bought by men who can’t think of a gift to buy for a female friend or partner?
The problem that you are trying to solve should match with one faced by the ideal customer that you have identified earlier. Now, this may seem like a case of the chicken and the egg. Which comes first, your ideal customer or the problem that they face? Well, it may depend on how you came to start your business. Did you see the problem first, the gap in the market, which you decided to fill? Alternatively, did you know that you wanted to work with a certain demographic, for which you may already have lots of contacts, and you are trying to find a product or service that fits? It doesn’t matter which way round you do it, as long as you end up with a problem that you are going to fix and a clear picture of the ideal customer who has this problem. In fact, you may go back and forth refining each until you have a great product-market fit.
How do I solve their problem?
Are you going to be the coat, the umbrella or the car? They all solve the problem of getting soaked in the rain on the way to work, but they all do it in different ways. There is nothing wrong in choosing a well-proven product or service to go to market with. There isn’t one type of raincoat, umbrella or car, and there could be room for your offer. The key is to create a solution that has a point of differentiation. You can differentiate across many factors including design, functionality, and price. Raincoats come in many different designs for those who just want to keep dry and don’t care about the look, to high-fashion examples which may be more form than function. Reducing the quality of materials, design and functionality of the item can allow for a reduction in price or vice versa. Always keep in mind that the offer needs to solve the problem that your ideal customer faces.
Instead of joining a crowded marketplace, you may also be able to disrupt it. Disruption involves creating a solution to a problem via a novel method. It is often attributed to the world of technology. Video killed the radio star. Air travel replaced cross-country train journeys in the US. It doesn’t have to be related to a technological advance, it is just about finding a new solution to an existing problem. King Insurance offered car insurance with premiums decreasing in line with the depreciation of the value of the vehicle, disrupting the classic model. Disruption opens a completely new market and has the benefit of being there first with no competition. However, it doesn’t mean you have a sure thing. The iPod was not the first portable MP3 player, but Apple seized the market and the rest is history. Being first also requires you to explain why your solution works at all, not just how it looks better, has more features, or is cheaper than the alternatives.
By knowing who your customer is, the problem that they have, and your solution to their problem, you can build your value proposition. Which is putting your offer into words for your potential clients. At SwiftCase we help thriving businesses, swamped by growing demand, automate and organise, to focus on what matters. This is our value proposition and it is made up of our ideal client (thriving businesses), their problem (they are swamped by growing demand), and our solution (automation and organisation). We also include our ‘why’, the benefit, ‘to focus on what matters’. The ‘why’ of your business is vital, and as we discussed in the introduction, should be the driving force of your business. The solution to the problem that your customers are facing should work towards the end goal of your ‘why’.
What are my next steps?
Now you have a clear description of your ideal customer. You know the problem that they are facing, and you know how your solution fixes their problem and alleviates their pain. You also know why you are choosing to solve this particular problem as part of a wider goal or ‘why’. You have your value proposition, a sentence that clearly articulates the who, what, how, and why of your offer. This can now form the basis of your elevator pitch. This is how you would describe your product or service to a prospect if you only had a very short space of time (the journey in an elevator, or lift if you are in the UK) to convince them to take things further.
Download a checklist of all the steps that we have covered in this article about how to come up with an idea for a business in 2019.
In the next article of the series, we will look at how to name your business, the legal requirements for starting and running a business in the UK, and what else you need to consider when you take your idea from dream to business in 2019.
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