Choose Your Product Offering

In reality, you probably already know what kind of business you want to be in.  Whether you are an accountant or an acrobat, chances are you have a talent or interest that you wish to monetize.  You already know generally what you want to do; hopefully it's something you enjoy doing, and this is good, because it will keep you motivated.  Nonetheless, as you develop a business model, you may wish to make certain tweaks to your product offerings; and even after you have been an established business for years, you will want to periodically review your product line to make sure it is positioned well relative to your competitors, and relevant to the demands of your target clientele.

For example, imagine that you are a musician.  You find that through persistence and charm you can get a small number of non-paying gigs playing whatever songs you happen to have been rehearsing lately.  However, imagine that if you were to consistently perform a couple of specific songs from your repertoire, you would quickly gain a following.  These particular songs happen to be in a sweet spot relative to your vocal range; and the lyrics, rhythm, or mood of the pieces really resonate with your audience.  When people hear these songs, they will be more likely to come see your show again the next time you play.  But if you don't play those couple of songs again the next time, these audience members will leave disappointed, and they will probably not recommend you to their friends.  If you DO play those songs again, people will come back to see your show over and over, they will recommend you to their friends, and they will visit your website and maybe even buy your music online.  You would start getting larger audiences and better gigs that actually pay real money, not just a couple of free beers.  If you knew which songs would lead to this type of success, you would be certain to perform them, wouldn't you?

The principle is applicable to any industry.  The process of determining which product offering is most likely to resonate with your target market is known as market research.  There are any number of firms that offer market research services on a contract basis; but such services are prohibitively expensive for most individuals and startups with energy and an idea but little or no financing.  Your alternatives are:

• Analyze your competitors.  If they are making lots of money selling a certain type of product or service, then that increases the chance that you too could succeed in the same area of business.
• If you already have a business, don't be afraid to survey your customers.  Ask them what they like, what they think you could do better, and what they wish you offered that you presently don't offer.
• If you don't already have a business, conduct an informal survey of your most likely prospects.  The larger the sample size of your informal survey, the better; and the more questions you can get your respondents to answer, the better.  Ask friends and family if that's all you can reach; but keep in mind that they are NOT your most likely prospects, so whatever your mom says, take it with a grain of salt; she is biased, and will not be as critical as a typical prospective customer.

Now you know a general area of business that you want to get involved in; you have given initial consideration to a potential target market (you will refine this in the future); and you have a general idea of where your interests intersect with market demands.  You can use this information to develop a more detailed plan for your product offering.

In choosing an industry focus for the purpose of this series of blog posts, I will focus on a relatively simple business that you can run out of your home.  There are permitting and regulatory issues related to selling food that you make in your own kitchen, so for simplicity's sake, let's imagine that you like to sew.  You've always been good at making clothes; you have been making your own clothes for years; your friends and random strangers often tell you that they wish more stores sold clothes as cool as the ones you are wearing.  So you decide to begin selling unique clothes that you make yourself.  In the future, perhaps you will just design the clothes, and have them manufactured in a factory, which will improve your cost efficiency, and with it, both your sales numbers and your profits.  But for now, you are just getting started, so you're going to make the clothes yourself, using fabric from the local craft store, and perhaps augmenting it with some fabrics that you are able to reclaim by deconstructing used clothing from the thrift store.  The question is, should you make fashionable clothing for the twentysomething set?  Practical outdoor-wear for adults of all shapes and (often large) sizes?  Or perhaps stylish onesies for toddlers? 

Evaluate your skill set in light of the size, spending power, and taste preferences of your target market.  You may really enjoy making fashionable clothes for young twentysomethings; but young twentysomethings are notoriously a bunch of cheapskates who are unlikely to want to pay enough for you to make a profit.  So you decide to make a line of trendy clothes; but you will also make a line of baby clothes.  Many parents are more likely to spend money to deck out their children than they are to splurge on themselves.  Also, grandparents and friends may end up buying clothes for the baby.  Your two product lines will complement each other; people may initially check your business out saying "I wish I could afford to buy something like that for myself" and end up buying something for their friend's baby shower. 

So, start developing your product line, and in the next installment of this series we will continue considering your business model.  Best of luck until then.