Choosing the right target market
Many turn their hands into business as soon as they have come up with an idea or when they have gained certain experience in a specific field without investing in market research and segmentation for the business. This makes up a very big weakness.
Failure in defining their exact potential customers leaves the startup leaders wondering where to start approaching customers or ending up in an overly broad scale. With their unpretending initial capital, which is identical among different startups, such broad approach costs a huge amount of resources while the sales are not considerably promoted. Furthermore, picking the wrong target market will cause the loss of your valuable money in a useless way.
To identify your target customers, you may need to do thorough market research and spend your time interviewing different audiences. Next, your target customer profile should be built. When your customers are well described, which are answered to questions like who they are, their income, their hobbies/interests, their source of information, and so on, your decision making will get much easier and even more effective.
Choosing the right location for business
Viet Hau, owner of a food and coffee takeaway chain serving office workers in Ho Chi Minh City, said, “When I started my business, I refrained from renting a space along a road with morning high traffic, and set up my shop on its side road to save costs. Then, I almost fizzled out from the very beginning as a result of this decision. Luckily, I soon realized that, no matter how tasty and cheap my products were, no customers would ever change their daily route only for them. Turned out, after relocating the shop, my profit has been growing despite the increased costs.”
Picking a wrong location is likely to make a great impact on your business outcome. If you set up a lavish office in a poor security area, the rest of your effort will become pointless. If you provide entertainment and leisure services, you may not want to locate your business around revered areas, like temples, pagodas or churches, etc., considering customer hesitation. If you target female customers, locations with convenient and safe access will be great for “weak arms.”
Choosing the right funding
An issue which every single entrepreneur concerns about but not all of them have got the right answer is about the funding source. It is important for setting out an appropriate fund usage plan that you understand the pros and cons of each alternative.
If you decide to borrow from your friends and family, you may need to be aware that this is an unstable fund. Many immature entrepreneurs have reaped the bitter fruits when the lender changed their mind and withdrew their finance. If you call for investments from major organizations, you should take careful and thorough consideration of the terms so as not to lose your total control to the investors, as some startup founders did.
If you intend to borrow from banks, you may want to research their interest rates and particular binding conditions. High interest rates may put pressure on your selling price and business activities. It is recommended that you contact the banks for consultation on their business loan and startup loan packages for the right production and business personal customers to make the most of the deal.