So you’ve decided on your business’s niche. And you’re ready to go out and create products and services just for your target audience.
Wait! Don’t move so fast. Are you sure this target market will be profitable? To be sure, do your due diligence and find out the answers to these four questions:
1. Is the target audience big enough to sustain profitability?
If it is too small, there won’t be enough buyers of your product or service. You can usually find this out by finding an organization, association or other groups that your target audience might belong to and find out (at least in the ballpark) how big the membership is.
2. Is your target market hungry?
If you’ve chosen an apathetic market that doesn’t care enough about the problem or desire you’ve uncovered to do something about it, they aren’t going to buy your product or service. This one is more subjective, however, a good rule of thumb is to find out if there are currently products and services available to this market. If so, then you can be reasonably assured that the market is hungry.
3. Is your target audience willing to pay enough for your product or service?
If it costs you $5 to produce your product, but your target market is only willing to pay $4 for it, you don’t have a viable product. Since you found some products and services when answer question 2, how much are they charging? Do you see any pricing trends?
4. Do you have access to your target market?
Is there a place where members of your target market congregate? If not, it might be difficult to get your message to them. If you were able to find an organization, association or other groups that your target market belongs to, will they let you contact their membership? Is there a publication that your target market reads that you could advertise in? Is there a list of members of your target market that you can rent or purchase?
If the answers to these questions turned up a big dud, be thankful that you didn’t put a lot of work into a product or service for that market. It cost you a lot less to do this research before development than it would if you had a product you couldn’t move.