24 May Five Keys to Starting Your Own Business | Key #2: Understand Your Business
Last week I shared the first key to starting your own business – get over your fears. If you’ve faced your fears, stared them down and walked right over them, then you’re ready. Let’s get started with Key #2: Understand Your Business.
Key #2 – Understand Your Business
Now, this sounds basic but it is one of the most challenging and crucially important things when starting your own business. This is the foundation of your business. Before you do anything else – registering a name, building a website, getting business cards made – you need to be super clear about what your business is about.
First, you need a business idea.
Some people have lots of ideas but can’t seem to take them to the next step. Other people haven’t got a clue what sort of business to start. They struggle to come up with even one idea. They know they would be good at running a business if only they could figure out what that would be.
The good news is, there are techniques and tools available to help you work out some business ideas based on your skills, experience and interests. Here are some tips:
- Do a Google search for “business ideas” and you’ll find plenty of websites sharing top business ideas. Have a look at entrepreneur.com where you can search for ideas by interest, category or profession. Startup Smart post startup ideas and case studies almost daily.
- Learn from others in your profession. Whether you’re a coach, writer, consultant, project manager, accountant, marketer or HR professional, you will find people in your profession who have started their own business. Visit their websites or arrange a coffee to ask them questions and get ideas.
- List the skills, knowledge, experience that you have that you could share with others. You don’t need to be a guru or an expert. You just need to know more about a topic than other people. Take the time to write these down and consider engaging the services of a coach to help draw out hidden talents that you may take for granted.
My Tip I’m going to be a party pooper here and say that I don’t believe that “finding your passion” is the answer. Yes, if you are going to run a business, then you better be enjoy it because you’ll be living it but it takes more than passion.
Once you’ve got your big idea, you need to research and test it.
There’s no point starting a business if you can’t find clients who are prepared to pay for your product / service. There are some great free online tools available to help you with the research – like Google Adwords Keyword Tool, news sites and Groups. These tools help you work out what your potential clients are talking about, the language they use, what terms they search for.
Some other activities you should consider:
- Research the competition. A lot of people think they have to have a unique idea for starting a business but you don’t. Look at potential competitors in a business area you’re interested in. Use tools such as Alexa and SEO Quake to understand more about what competitors are doing. Look for gaps in what they’re offering and work out how you could provide similar products / services in a better way. It may be that your particular style or personality is your point of difference.
- Do some market research by looking at the top selling non-fiction books on Amazon, searching the most viewed articles on article submission sites like ezine articles and use tools like Google Insights to check trends and popularity of search terms.
My Tip You need to be a little bit careful here because if you’ve got a really fab idea, you don’t want anyone stealing it. You need to protect your Intellectual Property. A good place to start is with IP / Patent government site in your country. E.g. IP Australia.
Defining a niche will make marketing your product/service much more targeted.
You need to be able to describe and visualize your ideal client – down to giving them a name, age, marital status, location. You need to know what their problems are and how your idea can solve their problem. Then, you need to be able to explain why what you do is the best solution for them, rather than any other option they might have.
A good starting point to help you define your niche is to think about the type of people you’d most like to work with all day, every day. The trick here is to focus. Don’t try to be everything to everyone unless you have lots of time and a huge marketing budget. You might come up with two or three different groups of people and test each of these to find the best one.
Once you’ve worked out your ideal client, you need to figure out how to get your message to them and whether they have the capacity to pay for your product/service. There’s no point defining a niche if that niche won’t pay what you need to charge.
I can’t stress how key this key is. I myself got stuck here but once I got clear about my niche and my ideal client things started to flow.
My Tip Just because you define your niche doesn’t mean you exclude everyone else. For example. My niche is smart, professional women who are fed up with the daily grind of corporate life and want to start their own business. If men or stay-at-home mum’s decide they’d like to work with me, I don’t exclude them. I just don’t focus my marketing efforts on attracting them.
Finally, you need to work out your brand.
This includes things like your marketing materials, business cards, logos, colours, look and feel. But it’s much more than that. Branding is all about the messages you send out to the world, every time you interact – whether it’s on Facebook, Twitter, a blog, your website, or in person. Remember, in small business, you are your brand.
I’ve found a great resource to help you with your branding. It’s called The Build a Brand Workbook and it takes you through step-by-step instructions for creating and implementing a standout brand for your business. (This is an affiliate link which means that if you purchase the book, then I’m paid a very small commission but there’s no extra charge to you.)
Working out what your business is going to be, who you will serve, where you will find your ideal clients and how you will represent yourself in your chosen market takes time and effort but trust me, the time you put in upfront will save you loads of time and money down the track.
Common Mistake #2 – I can help everyone
The belief that you can help everyone or that everyone needs your product/service – even if you can or they do!
If you’re not clear about exactly who your business is serving, the niche you’re targeting and what makes you unique, then you will find yourself opening a lot of oysters and not finding many pearls and for anyone who’s ever opened oysters, it’s hard and painful.
To avoid this common mistake, you need to stop trying to be everything to everyone and focus. You need to stop worrying that you are missing out on potential customers – there will be plenty of clients for you if you focus on finding exactly the right people for your solution. I’m not talking about the law of attraction or abundance theory here. I’m just saying that if you focus on your ideal clients, be consistent and stay on message, the right people will find you.
If you do this, you will become a recognised “expert” or “authority” in your field and this will allow you to charge a premium rate for your products/services. If you try to be everything to everyone, your message becomes diluted, you become just another player/commodity and you will be forced to compete on price – and that’s ugly.Do you agree that it’s important to define a niche for your business? Do you have an ideal client? What would it be like if you only worked with ideal clients and no one else? Have you fallen into the trap of trying to be everything to everyone?
In the next post on the Five Keys To Starting Your Own Business, I’ll be sharing Key #3 – Taking Time to Plan.
I’d love to help you with any questions you might have regarding your starting your own business ideas. Please feel free to call me.
*Editor’s Note: This post has been updated on August 2020 for accuracy.