When planning and starting a business, try to focus on a niche audience. Doing so will reduce your marketing costs and deepen your knowledge of customers' desires. Take the example of a cupcake maker. Rather than
starting a business to provide all forms of cupcakes to everyone across the UK, how about:
- Providing cupcakes to customers only in your local area
- Specialising in wedding cupcakes
- Becoming an expert in making only red cupcakes
With a clear idea of your customer profile, you will know where to find business and how best to promote your products/service. As you become more involved in the market you'll gain a solid understanding of market needs,
which comes in handy when it's time to innovate and expand the range.
Back to the example of our cupcake maker who, let's say, chose the option of specialising in wedding cupcakes. This business owner now wants to increase turnover and is wondering how to go about it. The options are to start
producing cupcakes for other occasions to or go deeper with existing customers and expand what's on offer. I'd recommend the latter approach. This wedding focused cake baker could increase revenue in a number of ways:
- Produce a 'make your own cupcake' kit and market this as an activity for hen nights!
- Offer cooking courses to brides who want to re-live the special day in culinary style. Produce a line in Anniversary cupcakes so the couple can mark the occasion with your products every year thereafter.
- Partner with others who service the same customer base and agree referral deals or affiliate arrangements. Weddings also need photographers, caterers, magicians, entertainment etc
Become an expert
- Become the nation's leading expert on wedding cupcakes by writing a book, starting a blog or self-publishing a magazine. Being an expert generates revenue, adds credibility and attracts new customers.
This approach of expanding what's on offer to existing customers will increase customer loyalty and you can have fun coming up with new ideas for products and services. Stick with your niche - it will serve you well!
Emma Jones is Founder of Enterprise Nation , the home business website, and author of Spare Room Start Up - how to start a business from home. Her next book, Working 5 to 9 - how to start a business in your spare time, will be published in May 2010.