In this series, I have been discussing the lessons I learned from being in a failed business. This is part two; read part one here.
Since you might not have been here for the first post, and you might not feel like reading it right now (and that’s okay – bookmark it for later if you like), I’ll quickly summarize why I am writing these posts.
The Reason I’m Writing Is Simple
I was part of a failed business, several years ago. Not only was it disappointing that it failed, but it was heartbreaking because it was a family business. It barely lasted a year, and the lessons I learned from that experience will stay with me for the rest of my life.
I’m writing this series so that you can learn from the mistakes we made.
The first lesson was don’t use money you didn’t earn to build your business, because invisible money produces invisible results.
Second Lesson: Figure out who your business is for BEFORE you take the plunge.
I know you’re really super enthusiastic about your new business idea. I know it’s near to your heart in some way, or you wouldn’t even be considering it.
I know you care about the way you’re going to do things, and that you’re so excited about planning what you’ll be doing.
Newsflash: Your business isn’t for YOU.
Does that sound weird to you? Counter-intuitive?
Your business is for your customers, not for you. Your business is for what your clients need. It’s for who they are and who they want to be. Your business is FROM you, out of your heart and your experience and knowledge – but it isn’t FOR you. It’s for them.
And unless you know who they are, you won’t succeed in the way you are supposed to.
So who are they anway? How do you figure that out?
Finding out who your target market is – the people your business is for – requires you to use your imagination.
Imagine that your perfect person (your target market) has a name. We can use my perfect person as an example: her name is Jane.
Jane’s super-short bio
My perfect person Jane is pretty awesome. She has two kids and is an entrepreneur. (This means she works from home.) Her highest priority is being there for her kids, and after that comes providing for them, for herself, and keeping her car in working order.
Jane knows that her business needs a website, and not just any old website – she needs a Wordpress website with a hefty dose of kickass and awesome, so that it showcases her abilities and talents and positions her as an authority in her field of expertise. Jane also knows that good design costs money, so she has some saved up, and wants a designer who isn’t going to leave her hanging after she’s trusted them with her budget and her budding business.
Can you see why it’s valuable to know who your target market is?
Since I know Jane values her family even more than she values her business, I already know that she’s the sort of person I’ll really click with.
And since I know that she’s careful with her money and only does what she knows she needs to – which includes taking risks like starting a business from home – then I know that I need to make sure my trustworthiness comes across in my marketing, in the way I communicate with all my clients, and particularly in how well I treat Jane.
Just in case you forgot the point of this post, here’s what happens when you don’t figure out your target market first:
You fail, and you fail BIG.
Our company was a mortgage company, and we thought HEY AWESOME, EVERYONE NEEDS A MORTGAGE, WHEE! Which, truthfully, is mostly true. A lot of people do need a mortgage, because most people can’t (or don’t) save up enough money to buy a house in cash.
However, we started to decide after we opened our doors that we were going to target first-time homebuyers. We had a lot of compassion for the inexperienced youngsters who needed a lot of hand-holding and guidance, and we wanted to be the trusted business people who could help them with their transaction, and remain honest and above reproach the entire time.
That was AWESOME. Except that we didn’t figure it out until we had already spent way more money than necessary on the building and the furniture and the sign. We didn’t think of marketing materials until we needed them, like, yesterday. We didn’t think of how to answer the phone. We didn’t think of what our business cards should say.
We dropped the ball and it cost us the business.
Don’t drop the ball!
If you don’t know who your target market is – whatever stage of the game you are in, figure it out right now. Your perfect people are waiting for you.
If you need help figuring it out, you can hire me as your coach. I’d love to help you out. :) My consulting and coaching rates are on my Services page.
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{ 2 comments… read them below or add one }
Excellent post, Rachael. So many people (me included!) underestimate the value and necessity of identifying a target market and then building your business around their needs rather than your expertise. I made this mistake for years in my business and it severely limited my growth. I simply could not attract enough clients to get beyond the part-time freelancing stage of business and it was so frustrating and I felt like such a failure because I could see others in my industry charging more per hour than I was and I knew my work was of better quality than theirs, so why couldn’t I make this work? Because I was trying to be all things to all people. I thought every small business owner using QuickBooks was my potential customer. So so so wrong. My business did not begin to bud until I let go of the notion that I could be everybody’s bookkeeper . . . until I made a firm decision about who my ideal client was and made it my mission to provide the services and solutions they needed. You are 100% right, Rachael. No matter what stage of the game someone is in, you can pretty much never go wrong by stopping and taking the time to truly zero in on who it is you are trying to serve.
Great post! I survived a failed business too and even though I spent $50,000 I didn’t have (grrr. SBA loan. I second your “invisible money produces invisible results” take on things) and a hefty portion of my sanity- I learned a hell of a lot more than I would have getting an MBA (and spent less). The lessons were hard won, but are now being very thoughtfully applied to my current business. Which is, not surprisingly, faring much better.