It’s so exciting to find that new business idea that you believe will make a lot of money. Before you get started evaluate the profitability. Will the customers actually pay for the product?
A key part of business planning customer targeting.
Who are your target customers?
What is their age range? What kind of job do they have? Married or single? Educated or uneducated?
All of these is crucial to know who to are marketing to if not you will be talking to nobody.
Once you have narrowed down who your market is, ask these two questions to ascertain if the idea would make money.
1. Is your target customer able to pay for your product?
Can they afford your product? Do they have the money? Some times we try to sell products to people who can’t afford them. They may love your products but they just can’t afford it.
You may have approached them with the new idea and they would encourage you and say how great the product is but they will never buy because it is above their price level.
An example of these would be someone who sells beauty products to students and they choose to sell a high-end beauty brand like MAC. They might like it but they can’t afford it.
2. Is your target customer willing to pay for the product?
These group of people can afford to buy the product but they just don’t see the value or they don’t need it.
A lot of people run away from selling low- end or cheap products and go to high end products because they believe rich people have money to spend. What they fail to realize is the just because someone has the money to buy something doesn’t mean they are willing to buy it.
An example would be offering home- tutoring lessons to children of high-class parents. They can afford it but they already send their children to expensive schools with advanced after-school programs and highly qualified teachers, also they are also very security cautious. They might not be willing to pay for your service.
The sweet point for any business idea target market is a product that your customers can afford and are willing to pay for.
