The Target Market: Why Most Businesses Die Within the First Five Years…

Have you ever wanted to eat Italian food (picture unrelated)

Well, if you did would you go into a diner and order spaghetti or go to an Italian restaurant? Chances are that you would choose the restaurant, right?

The truth is that the diner has food that caters to a lot more people but whenever people want to have something special, they opt for a restaurant with a specific menu.

A. You need a target Market:

Whenever you ask a new business owner what type of people they want to sell to, they say that anyone would buy from them.

This seems like a decent idea at first but the only problem is that, once you try to cater to everyone, you are special to no one.

Imagine, if you were blind but could read Braille, and your city had 100 bookshops but only 1 bookshop that had the books in Braille and which was designed to sell and accommodate blind people.

Which one would you go to? The one catered to blind people, right?

When you choose a target, you make an image of a specific customer and you tailor your product or service to them specifically.

They buy from you and they remember you, when you buy from a general shop, chances are you don’t care for them or remember them.

B. Niche down to Sub Categories

Okay, now that you know that you need a target market, you have to find a way to get to the target market.

The correct way to get to the target market is to niche down. Say you take an industry, like photography. You break it down into multiple categories like:

1. Family Portraits
2. Corporate Photography
3. Landscape Photography
4. Wildlife Photography

Then if you feel like it, you could niche down further, for example in Corporate, you could mainly do brochures to headshots. While your potential base might be smaller than a generalist photographer, you will actually get more customers.

C. Niche Specialist can charge more:

Imagine you have a heart attack (picture below):

Who would you ask for help, a general surgeon, or a heart specialist?

Chances are, a heart specialist, right? Even though, a heart specialist costs more.

When you are a specialist, people want to buy your product from you because what you sell directly caters to their needs. So, by specializing you can charge a higher amount than them.

You need to be specialized, because once you become a commodity people just shop by price. If you are a fruit vendor, do you think you could compete with Walmart and other big supermarket chains?

Truth is, in the world of giants small businesses only survive if they offer something they can’t.

D. Judge the Niche for you using PVP:

PVP Index stands for:

Personal Fulfillment: How much you enjoy it

Value to Marketplace: How much demand

Profitability: How much money you make

Basically, mark each subcategory of them out of 10, add the results, and then compare the different subcategories, and which one has the highest wins.

Like in corporate photography, you have Personal Fulfillment at 3, Value at 8, and Profitability at 8. While you have Family portraits at Personal Fulfillment is 9, Value at 7, Profitability at 4.

The total for corporate is 19, while the total for Family is 20. So, you should choose Family Portraits.

This of course depends on your personal values, if you enjoy corporate photography more, you should do corporate photography.

E. Make a character Profile:

Have you ever thought about what your main customer type would be like? What goes on in their head and how do they make their buying decisions?

1. Why would they want to buy your product
2. What you can do to make them want your product more

Thinking all of this stuff is important because once you understand the person you are selling to, you have the opportunity to craft an offer specific to them.

Summary:
1. FInd a Target Market

2. Do so by niching down

3. Specialists can charge more

4. Judge the Niche using PVP

5. Make a character profile.