Way too often I run into frustrated new entrepreneurs that understand very little about the marketplace they plan to enter.
Some may have a written business plan (although this important step is neglected way too often). Some may even have experience in a niche market but have not spent time researching that market in earnest given they want to do business in it. That’s a big mistake.
Part of the problem lies in the simple fact that business owners sometimes feel they are not capable of researching a market. They have never done it before and wouldn’t know where to begin or what to look for in their study.
Others don’t feel any need to delve into the market – they may have some experience in it already and figure “I’m a professional in the market and I know what my prospects and customers want.”
I can honestly tell you that the Internet superhighway is littered with products brought to market that no one wanted! Had market research been done in the first place, most such disasters could have been avoided.
The Internet is such a wonderful tool when it comes to researching a potential market and niche (and by the way, they are not synonymous).
Here are a few questions you can ask (and the answers are there online for you) prior to creating a business, product or web site that will help you to analyze whether your business hopes are realistic.
- Who are my perfect customers? I consider a perfect customer to be one that wants exactly what I have to offer and the ability to pay for it. Remember, you don’t typically create new demand for a product or service. The demand exists in the marketplace already and your charge is to find it and then sell into that existing demand. Yes, some persuasion may be needed in a sales letter … but if the prospect isn’t looking to buy what you are offering (or something very close) … well your conversions will not be good.
- What are the demographics and characteristics of that perfect customer? What is the customer gender, age, skill level for the product, where do they live, what is their education, income level, and past experience in the market? Understanding these things helps you to better target your product to meet the profile of your customer so that you can provide something that gives great benefit, solves existing problems, and is easy to understand and use. If your offering is not a good fit for the customer’s technical or skill level you risk a “one and done” customer buying experience which is never appropriate.
- Where do these perfect customers congregate? As you get into marketing your product or web site, it’s important to laser target your ads and even branding message to be seen by those most interested in what your are offering. You always seek a high ROI (return on investment) for your marketing dollars.
- How many, and what kind of competitors will I have? Understanding the direct competition is critical. It can be a daunting task to break into a market that is filled with heavy hitters who are already established and have a track record of success. It can be done, but most likely you will need a product or service that fills a different and important need in the niche.
- Another reason for understanding the competition is that you need to see what is currently available for your perfect customers. What other choices does your prospect audience have? When you know this, you can better position your business and products to address a unique need or a “gap” in the marketplace where the competition is non-existent or at least not so heavy. A great example is the retail book business. How will you ever compete with Amazon in that space? Local bookstores by the dozens have been put out of business because Amazon has become a consumer favorite in that marketplace. So one must ask the question, “What do my prospects want that they can’t get from Amazon?” Do they want some very deeply focused niche books? Do they want a more personalized buying experience? Do they want a physical place to hang out? Do they want book reviews from experts instead of average consumers? What else can I provide that Amazon (because of its size) can’t?
- Do my customers usually buy this kind of product online? Maybe there are reasons why you shouldn’t try to sell your product on the Internet. Maybe the cost to deliver the product is exorbitant. Maybe the exact product that you would sell is already online and selling well. Maybe the product is conveniently available in local physical locations.
- Is my product timely? Or did I just miss the “hay day” of my product and now the demand is petering out. You don’t want to be chasing fads or trying to sell out-dated information or technology. You want to be on the leading edge of the product wave … not floundering in the back wash.
- Have I incorrectly estimated the size of the market? This mistake can be a business breaker. A market too broad means there is too much competition and it will be difficult to differentiate your business brand and effectively target your customers. A market too small means you might find some saturation – too many competitors for the small amount of potential buying customers. If that’s the case, you can still compete in the market but you must position your business differently. Some suggest that the biggest markets are always the best because if you see there are lots of sellers you know there are lots of customers. I personally don’t buy that logic completely. I would prefer to have a unique product in a very targeted market – it means less competition. Most viable markets are larger than you think since online markets these days reach across the globe.
- Can I get repeat sales within my niche? Most business owners don’t make a living on a single product. You’ll be ahead of the curve if you choose a niche where multiple products can be created and sold to repeat customers. Selling a happy customer on another quality product in the same niche is almost always easier and less costly than finding a brand new customer. Build your business on repeat (back-end) sales.
- When my prospects are looking to buy a product like mine, where do they go? Understanding the places typical niche participants shop is important. It helps the business owner to focus advertising and it opens the door to knowing how best to make an offer that will work. Observe the best competition. Look for the authority sites in your marketplace.
- What are typical customers in the niche willing to spend on a product like mine? Pricing decisions can be very important to a business. I think the best approach is to understand the price points in the niche that are now working and then test and track price points for your own product before you roll it out in a major way. You can always ramp up marketing, but you should only do that after you understand where the best pricing points for your niche rest.
- How much support are my perfect customers going to need? Support requests for a solo business owner can get to be overwhelming. Time is money and if you get an avalanche of support inquiries it’s going to mean a lot of your day is taken in answering phone calls and emails. Many folks are lazy (or lack confidence in their own ability to figure something out) and will pick up the phone to get help even if simple, clear and plain instructions are sent with the product.
- Are my perfect customers candidates for a community? By that I mean, are they the type of people that like to get together and interact? If so, you have a perfect niche for a forum, a subscription or membership site, or even physical or webinar events. People like to meet and interact with like-minded enthusiasts. When I think about this phenomenon, the Harley Davidson brand comes to mind. Folks that buy Harleys seem to want to get together. The product brand is recognized and esteemed. Business owners can create a lot of recurring revenue if they can enhance the brand’s user experience and provide a community platform or infrastructure for their customers.
- Will the market prospects for my product or service also be candidates for another unrelated-niche? If so, a business owner can capitalize on affiliate offers in that other niche. In addition, there are joint ventures and cross-promoting that can generate a lot of new leads and additional revenue. Just as one example, a business owner with a bridal product might decide that brides are often candidates for printers (announcements), photographers (wedding pictures), and soon, baby supplies. All of these businesses could be potential partners in sharing leads, cross-promoted product offerings, and customer back end products.
- Finally, does my market share product or web site information? Certain kinds of businesses attract customers that tend to be social. If this is the case with your product, the use of social media in your marketing can be a huge advantage. Word of mouth advertising is very effective and if your customers have a great experience with your business and share their feelings about it with their friends, you are going to reap nice benefits in your business.
There you have it: fifteen questions to ask and resolve in order to better understand and analyze the potential of your marketplace for your online business. Initial market research is ignored by many entrepreneurs. Before you decide on a product to sell , or a web site to create, or even the business model you’re going to employ, you need to research the marketplace. It makes creating a profitable and lasting business so much easier and legitimate!
To your online business success!
Freelance Writing as a Career Online
Like every other freelance skill I can think of, profitable writing for the Internet is largely market driven. The consumers of the product ultimately determine what, how much, and the price they will pay for their purchase.
Since the Internet provides access to global markets, and global freelancers, some have complained that they can’t compete against authors in far away places willing to sell their time and work for pennies on the dollar (U.S.). How does an author in the U.S., for instance, make a living writing articles when the going rate online seems to be so depressed?
If no one looking for articles, for example, would pay $5/500 words the price of articles would climb. But there are freelancers that will work “for cheap” and consumers that will pay dirt cheap prices for that work thinking it’s a real bargain … so that market segment exists.
In my opinion, here’s the key for freelance writers: don’t try to compete in that bottom dollar market.
Open your mind to the possibilities of using your writing skills in other ways. Too many writers (many of them newbies) assume that article writing is the only outlet for their work. But it’s not – not by a long shot!
Here are some other ideas for you writers:
1- Use your writing skill to produce your own reports, ebooks, lead magnets, sales letters, whitepapers, how-to guides, freemiums, etc.
Focus your list building on business owners and entrepreneurs, especially targeting a niche or two where you have some current knowledge and experience. Offer the complete finished product (ideally including graphics) and include branding with the business owner’s private logo, contact info, web site link, etc. Sell the finished products “ready to go” so the owner can use it right out of the gate with possibly only very minor changes needed. Charge custom prices for your custom work.
2- Your skill could be used in selling “hot sheets.”
I’m specifically thinking about the entertainment industry, gaming industry, dating industry, etc, but hot sheets can be appropriate for many markets. Subscribe to several hot niche magazines (like People Mag, for one) then focus on “putting your own take” on what you read. Don’t copy or rehash. Be a commentator and produce a weekly or monthly “hot industry news” kind of writing in your chosen niche. Build your list of people that can’t wait to hear from you. If you had 1,000 faithful subscribers that devoured everything you published on a weekly or bi-weekly basis at $2 a pop, you would be happy, right? What if you had 10,000 addicts? Or half a dozen specific niches you covered?
3- Write your own serials, novelettes, novels, plays, short stories, magazine articles.
If you’re good, this road could lead to some major income. I think the key would be to find the genre that appeals to you and for which you could find avid readers. Think about selling “serials” where readers get caught up in wanting to know what happens next with your characters. The same type of content can be written in the non-fiction space as well. The key here is to niche down deeply into the vertical market and specialize. Become the “go to” author for that specialization where avid fans dwell, build your subscriber list, and then feed the hungry audience over and over again with paid content (maybe) giving a nice discount for “valued paying customers” on your list.
4- Do technical writing if you can learn that skill.
There is a great and on-going need for manuals, instructions, how-to booklets, product guides, etc in technical fields. Those who already “speak the language” should focus on areas of their own expertise. Even those without experience could sell their writing in less technical subjects after researching the various appropriate topics online.
5- Write to create your own products.
Every “how to” niche is ripe for product creation where you explain something that needs doing to those who want advice, hand holding, or reassurance that they’re doing something correctly. The sky’s the limit on this one. There are e-books, e-courses, tutorials, reports, PLR content, and lots of other sellable products in every niche from which you can derive a nice income.
6- Instructions to business owners.
I almost hesitate to mention this one simply because it is so powerful if you grasp the idea. The market is online solo and small business owners. The idea is to write short yet authoritative instructions about various tasks that business owners have to do but don’t know how to do, don’t want to do, don’t have time to do, or at least would like to learn how to do better, faster, and cheaper. Think business execution steps of instruction. Let’s face it … more and more everyday people are coming online with ideas to make money. Many fail, of course, but there is a constant need to have a mentor or guide that can help these entrepreneurs to understand and execute specific online business tasks that have to be done. Many of these people know nothing about running a business online. You could be the one that authors the steps to daily online business execution for them.
There are so many things you could write about: getting customers, nurturing customers, promoting services, building or maintaining a web site, doing business taxes, dealing with angry customers, keeping employees happy, outsourcing billing, setting up merchant accounts, email marketing and list building, SEO for their web site and on and on and on. But here’s where you can make your writing very valuable.
For each set of instructions you write, make it specific to one type of business (their business) and one market (whatever their niche might be); for example, “How to promote your dental service online.” Be very specific. Then with just a little bit of “tweaking” you can change your report to “How to promote your bookkeeping service online,” or “How to promote your Investing service online.” By being specific you will attract a much larger and hungrier crowd of prospects in your chosen niche because the prospects see you are writing for their exact business. And by leveraging the concept of re-purposing your content, you can create great content once and then simply modify it a little for the niche audience and have a ready-to-go new product targeted for a totally different niche.
7- Blogging, of course!
This is a very powerful and popular way to express yourself through your writing and many people have learned to do it in a way that provides an income for their effort. To be a profitable blogger you must be disciplined and willing to create valuable niche content on a very consistent basis. You must be a good writer and be willing to share your personality and expertise in your posts. In addition, you must figure out how to monetize your blog. There are many, many ways and methods to choose from in order to generate income with blogging and you will have to decide what is best for you and your audience and then master that technique. There are lots of monetization examples online.
OK, this has been a long discussion but I wanted to help you to start thinking about writing as something other than just producing articles.
The field really is wide open and you can make a substantial income if you get creative, differentiate your writing, be specific in your business model, and provide outstanding service consistently as well as high quality, engaging and compelling writing!
A simple word of caution: great writing (that people will buy) is produced by authors that have writing talent. Many don’t. Certainly, anyone can improve their writing skills over time. But if you can’t communicate at all, can’t form a proper sentence, or don’t like to write, please choose a different way to make money online. I’m serious here. The Internet is a virtual dumping ground for poor and worthless content. Don’t add to it!
To your online business success!
Starting with the End in Mind
Just what do you plan to do with your business when you no longer want to have it? Have you ever considered that there may come a time when you get tired of running an online business on a daily basis?
Circumstances change, as do personal desires, motivations, and needs. There may even come a time when you move on to bigger and better things, or new challenges, or a different kind of business altogether.
If you have a pre-planned exit strategy that can be put into place very quickly, you might just save yourself a lot of work and worry or possibly even earn much more upon the sale or transfer of your business than you might otherwise without a plan.
Starting your business with an exit strategy, even if it isn’t complete or set-in-cement, is wise planning for the future.
My guess is … most entrepreneurs don’t go into solo business with the exit door in mind.
Why would they? Entrepreneurs are focusing on starting and growing a business and the last thing they spend time worrying about is how to get out of their business when they are done with it – for whatever reason.
Simply put, an exit strategy is a game plan of sorts. It’s a thoughtful plan for going out of business.
Why would a business owner want a plan for going out of business?
For some profitable businesses, at least, an exit strategy can include realizing a significant profit above and beyond the revenue that comes from daily operations.
As a solo operator, wouldn’t it be important to “collect” or receive payment on the sale of your business that you had created, grown, nurtured, and monetized over a significant number of years?
Regardless of your desire to build and never sell your business, there may come a time in the future when you want or need to turn this asset into cash.
Even if you hand the business down to children or other relatives, they may not have the same desire you did to run the business. They may not want to spend their lives as you did.
Though you may not hear a lot about exit strategies, buy-outs, and the sale of businesses on the nightly news, they are common place in the business world – especially with smaller businesses.
You see, investors put money into companies in order to realize a return on their participation. Often that return isn’t realized until the company makes significant income or when it is sold and the investors are paid off.
Some call this exit plan in a family business a “plan for succession.”
The succession plan answers the following questions:
1. Who will own the company when it is passed down to heirs at the retirement or death of the current owner?
2. What accounts receivable or investments will accompany the business?
3. What income will be available and where will it come from?
4. What income is expected by the original owner and how will it be taken?
5. Who will be responsible for outstanding debts and accounts payable, the original or new owners?
6. Will the new owners be expected to purchase assets of the original company?
7. What will be the disposition of intellectual property, patents, trademarks and other intangible assets?
In the corporate world, exit plans typically lead to one of the following: (a) a merger with another company, (b) a buyout by one or more of the interested company shareholders, (c) an IPO (initial public offering) where shares of stock in the company are sold to the public and then traded on the exchanges, (d) an outright sale of the company and all its assets and liabilities to another person, a company, or group, or (e) the creation of a franchise where the business is replicated in multiple locations.
The form that the exit strategy takes will depend largely upon the worth of the company at the time of exit, the desire of the original owner as to whether the business stays in the family or not, the potential to identify and cultivate new business buyers from either current investors or the public, and the needs of the original owner for an income stream or lump sum payments.
Thinking about all these questions and variables at the time of business creation is a sound strategy. Some businesses are specifically created with a 3- to 5-year exit strategy window. Serial entrepreneurs are very good at creating, growing, then quickly selling (flipping) a business for fast and maximum profit.
Think about the succession of your business early on . . . it will happen smoothly and more profitably if there is a workable plan in place prior to the time when the owner needs to get out of the business.
To your online business success,
Revelations for a New Marketer
Today, I’d like to share with all of you ten “truths” about Internet marketing that every new business owner should consider from the very first day working in a new business. I see it as a great advantage to a new business owner to have these truths “revealed” at the very beginning of a new business project. Here they are:
1. Education and learning in IM is a very good thing . . . to a point. I recommend that everyone spend 1/2 hour a day, as a minimum, learning about IM (Internet marketing) from a trusted source. Don’t consider learning your craft a chore – relish the opportunity to discover ideas and principles that will fill your life with prosperity. Many of the foundational principles in this discipline are not real intuitive. But a caution is in order: the pursuit of an IM education is no substitute or valid excuse for “on the job training.” Some have been “learning,” nearly full time, for many many years. Instead, learn as you go about your business. If you wait until you “know it all” you’ll waste a lot of time that you could have used to set up, experience and build a simple new business. And believe me, experience is always the best education in this discipline.
2. IM can be simple unless you complicate it to the point that it becomes quite complex. Take note that I didn’t say IM was easy. You should recognize the difference. There are actually very few things you really need in order to set up a sales system, have a product to sell (your own or that of someone else), a transaction platform and a delivery mechanism. But filling that system with prospects and converting them into buyers is not always easy; in fact, selling can be very hard if you don’t know what you’re doing. Especially in the beginning, keep things simple and spend your time understanding how and where to find prospects and how to turn them into buyers.
3. Decisions are your friend. You must make them everyday in your business. Don’t rely on people in a discussion group or a public forum to make them for you. Study alternatives, get feedback to help you weigh the alternatives, then be decisive, choose one, and move forward. Even if your choice is wrong, you’ll know soon enough and have a chance to go with something else. Think about your own life. Everything good that has happened to you has been the result of deciding to do something. Indecision has claimed a heavy toll on many IMers who have literally spent years trying to get started with something . . . anything!
4. Some IMers can only focus on the money. If you do that, you will never be satisfied with the amount you make. A better approach, IMO, is to focus on helping and serving your customers. If you serve well and provide your customers with quality products and services, money will be the result. If you take a personal interest in their interests (not yours), they will recognize you for your empathy and concern and reward you with their money. Owning trust in a world full of doubt and skepticism is a goldmine because your clients will shower you with loyalty and repeat business. Trust of businesses and their methods and motives is a scarce thing these days.
5. Your time is valuable. Sometimes, especially when you’re on a tight budget or even broke, you have to spend your time on all the tasks necessary to execute a business plan. I understand that. But in no industry like IM is the phrase “time is money” more appropriate. Learn well the principle of leverage. It’s what allows you to take your business to increasingly higher levels of income. It’s what allows you to let go of certain time intensive activities that are done better and more efficiently by people trained to be experts in that one thing. It’s what the smartest business owners use to back themselves out of the daily management of routine tasks in order to have more free time to run their companies and enjoy life.
6. In Internet business, you are responsible for everything. Whatever you may now believe, it’s no one’s fault but your own. Period. It’s not Google’s fault, it’s not your mentor’s fault, it’s not the software’s fault, it’s certainly not the customer’s fault, it’s not your ex’s fault, or you mother-in-law’s fault. Don’t blame it on your language, your education, your lack of time, your age, your girl friend, the computer, your niche, PayPal or ClickBank. And in the very rare instance that it really does happen to be someone else’s fault . . . it’s still your fault!
7. Some people are born and live their entire lives in the state of denial. If you have a weakness that stops you from doing a necessary business chore, don’t ignore it, put if off forever, or deny that you have a problem. Get some help, fix it, and move on. If you don’t have money to start a business – go get some (it doesn’t take much). If you don’t have the time to nurture your customers – find the time and quit doing other things that take up all your time. If you don’t know how to attract free traffic – spend some money and go get some paid traffic. Find a way to move around every obstacle in your path. Learn how to do hard things or pay someone to do them for you. The better you get at finding solutions, the easier they are to see and to navigate around.
8. Like-minded people nearly always find or attract each other. If you want to be successful in IM, hang around and pay attention to successful IMers. If you want to be profitable as a blogger, hang around bloggers that are making good money. If you want to have a money making e-commerce store, then befriend, listen to, and pay attention to what profitable store owners are doing. In a similar manner, be very careful about who you choose to listen to and follow. Public forums, chat groups, and online member groups often contain well-meaning but totally clueless folks that love to give “rehashed” advice – the source of which is something they “heard online.” I’m not saying that most of these people here aren’t genuinely nice people trying to help … it’s just that often their advice and tips given are totally wrong.
9. IM is not the place to be timid and shy. I’m a fairly private and quiet person by nature. That’s not to say that I can’t be a leader or a voice of authority when needed. But I can tell you, without reservation, that if you want success as a marketer, you can’t hold back and wait for good things to happen to your or your company. Business is war. You have to “put yourself out there” (so to speak) and force your own success. The best way to do that, IMO, is to be confident and authentic, strive to always deliver quality, and aggressively go after prospects and customers by believing that you can help them and that you do have workable solutions to their needs. Believe in yourself, what you’re doing, selling, and advising. So called “black hat” methods, scamming, peddling garbage, and claiming to be or do what you’re not is the sure road to eventual failure. People tremble because they fear they are not “the best.” You can make money without being the best – but it’s important to do your best – always.
10. Persistence is a virtue. I can think of no other personal trait or characteristic more important in IM. If you can’t persist on a project, or toward a goal, or in giving your business a chance to develop over time, I would suggest you not even attempt to start an online business. I mean this in all sincerity – sometimes persistence is the only difference between a profitable and an unprofitable business. The thought of and desire for instant and quick riches is possibly the single biggest reason for failure in this industry. When it (making money) doesn’t happen fast enough, many people quit, or jump to a new and different method, only to give up and start again and again simply because they did not have the necessary staying power.
There you have it. Ten “truths” about Internet marketing that I have learned that I hope will directly benefit you.
Opposing views are always welcome.
To your online business success,
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