We live in the age of DIY marketing. Websites like Indiegogo and Kickstarter make it feel like everyone’s discovered their inner entrepreneur and is off to reinvent the wheel. But while the success stories are inspiring, for every million dollar idea there are thousands of products that don’t make it off the cutting room floor.
Creating products or deciding on a service to sell is certainly the first step in paving a road for yourself as a self-employed entrepreneur. But now comes the tricky part: marketing. It may be tougher than you think. The sombre fact is that most small businesses fail within the first five years.
To help our self-employed customers avoid that statistic, QuickBooks have come up with five questions to help you understand whether the products or services you have in mind is marketable or not:
1. Who are your customers?
Enthusiasm for your products or service is fantastic, but it’s not enough that you love it–you need the world to feel the same. Remember that people tend to pay for products that are necessities or make lives easier, as opposed to novelty products. Learn to identify customer buying habits and interview the people you envision purchasing your service to learn what, if any, demand exists.
Don’t underestimate this. When we launched QuickBooks Online, we knew that we had to differentiate ourselves from some stiff competition. We honed in on our customers’ insights, even visiting some of them in their workplaces, to learn about their needs. We saw the challenges faced by small businesses and the self-employed, and we created our accounting software with you in mind.
2. How saturated is the market?
This requires some research. You can’t rely on a market springing up around the products you offer, you need to examine the supply and demand that already exists for your idea in your local market. Are people willing to purchase your product? Great! But if fifty other companies already supply a similar service, you’ll struggle to make a splash.
You won’t inspire many sales standing on a soapbox downtown and shouting through a megaphone. Do you have a plan for reaching your market? Develop a business model that details your sales pitch, your advertising, and your marketing strategy to make sure that your service reaches your customers.
3. What’s your strategy?
You won’t inspire many sales standing on a soapbox downtown and shouting through a megaphone. Do you have a plan for reaching your market? Develop a business model that details your sales pitch, your advertising, and your marketing strategy to make sure that your products reaches your customers.
4. How much will it cost?
This consideration is twofold. First, have you concretely budgeted how much it will cost to manufacture, distribute, and advertise your products? Or, if you’re offering something like a web-based service, have you considered the cost of site upkeep, or any fees you may need to contract a developer or web designer? Whatever service you’re offering, understand the costs involved and produce a financial model that guarantees your expenses are covered.
Second, do you understand the hidden costs or dependencies of your idea? For example, Forbes points out that hydrogen-burning automobile engines, while simple in design and environmentally friendly, lack the necessary service stations and legislation to make them truly feasible.
5. Who is your competition?
It’s rare for a service to be so innovative that the market is devoid of competition. Once you’ve researched who else is catering to your niche market, determine what differentiates you from them. What sets your products apart from theirs? Do you fulfil any needs your competitors overlook? What aspect of your service might compel your customer to choose you over your competitor? Hone in on these elements–they’re the building blocks with which to build your reputation.
You’d do well to visit a website dedicated to researching different companies, such as Hoover’s Online, which catalogues over 85 million company profiles.
Once you’ve equipped yourself with market research and you’re confident that your service meets a need, the final step, and perhaps the most important, is to take that leap of faith. Self-employment means no boss handing you new projects; you have to continuously spur yourself forward, seek out opportunities, and market yourself.
As John Schulte, president of the National Mail Order Association, says: “You might not get anyone to agree with me, but I have found there is no sure way to gauge the success of a service type concept except for biting the bullet and start doing it.”
For more help with self-employment, visit the Quickbooks Self-Employed hub.