New blog – today I’m continuing my guide to starting an online business when you’ve only got a tiny budget with a focus on establishing your target market and promoting your business to them. If you’ve not read part 1 yet you can find it by clicking here.
Knowing your audience:
So, you’ve decided on your business idea that’s hopefully going to make you a small fortune but how do you know whether it’s any good? Well the first thing to do is identify a target market for your product. This is where the concept of demographics becomes key. Are you selling something designed for men, women or both? What age groups are you targetting? Where will you be selling to? Just the UK or will you be selling abroad? Are you focussing on people with any specific interests? What budget do the people you’re selling to have available to spend on your products? You need to answer all of these questions before you can go to market with an idea in order to make sure that you can focus your marketing and selling activities on these specific groups! Planning and preparation are critical activities when setting up and maintaining a business so don’t disregard these steps in the hope that your product(s) will naturally find their market.
Once you’ve identified your audience you need to identify what need of theirs your product meets. For example, if you’re building an online clothing business (like the upcoming money mental clothing co) then you should be aware of statistics like the fact that millennial men spend twice as much on clothing as non-millennial men. 50% of millennial women shop for clothes twice or more a month but only 36% of older generations do. So the millennial market for clothing is huge! They’re also more tech-savvy and more confident with making purchases online.
But where do you find out about your target audience? Well this is where our old friend the internet comes in extremely handy. After all you’re building an online business so you know your target market is already out there on the internet. When starting a business with a tiny budget the money doesn’t exist to conduct large market research activities with online surveys and product tests. So it’s very much a case of seeing what marketing research is already out there that you can pick up on. When I’m looking for statistics and market information there are a few websites I regularly turn to which I’ve listed below:
- Statista – an online statistics portal with statistics for just about everything you can think of! It has a mixture of free and paid for content but I’ve found plenty of free statistics about the clothing and design industry using the website.
- Google trends – this is a fantastic website run by Google which can tell you what people are searching for and what topics are trending across the world or even in your local area. Very useful if you’re wondering what products people are searching for on Google (so that you can see what people want!).
- Consumer Barometer – another tool from Google which, amongst other things, contains research about how people use the internet to inform their purchasing decisions. So again it can help you with identifying your target audience and how likely they are to make a purchase online.
- Public Data Explorer – yet another website from our friends at Google. This one contains an aggregation from national statistic reports across the world, including things like census data so can be helpful with figuring out how many people there are in the demographic groups you’re looking to target.
Those are just a few of the tools that are out there which can help you identify your target audience. Of course you can also use your own social media accounts to test out your product ideas with your friends and followers and do a bit of promoting for your business as well!
Promoting your business:
Once you’ve decided on your target audience you need to find a way to reach them. There are a variety of different options out there for promoting your product. However, here’s a few ideas that have had some success!
- Facebook ads. I’ve used this myself to market money mental when I had some free ad credit so I know it works. Effectively you can design ads based on the product you want to sell and directing customers to where they can purchase them. The great thing about Facebook ads is that you can use them for promoting your business to specific demographics and customer groups. E.g. you can specify what age groups you’re looking to target, what gender, what region they live in and what interests they have. So it’s an excellent marketing tool! However, the cost can be quite high. The key metric is cost per click (i.e. how much you have to spend before someone will click on your link). I’ve seen average figures of it costing between $0.27 and $0.80 per click so you need to factor these costs into your product prices (and don’t forget that not every click will lead to a sale!). If you want to find more out about advertising on Facebook you can click here.
- Another way for promoting your business is by using google ads. Have you ever noticed when you search for something on google that a series of sponsored adverts related to what you’re searching for appear at the top? Or when you’re watching a YouTube video and an advert appears before it? That’s because someone has paid a nice sum to google to have their advert featured when someone types certain search terms into Google or YouTube. Of course you need to do some research to figure out what people are searching for on google before going down this route. Working out how much it will cost can be quite difficult though as Google ranks the cost of search terms according to its own criteria. So it’s worth having a play around with google ads to see what works for you. The good thing is that you don’t get charged until someone clicks on your ad. If you want to find out more about google ads you can click here.
- Both of the above options require a spend on advertising (although the hope is that if people like your products they will recommend them to their friends and family and so your market will grow organically. But there are also options for promoting your business for free. Believe it or not blogging (like I’m doing here!) can be one way of doing that. Creating a website that contains links to your products and writing in detail about them on your own website and on other websites via blogs can help promote your products to readers as well as improving something called your ‘Doman Authority’ which can mean that your website will start to rate higher on google searches. That brings me on to the final concept of ‘Search Engine Optimisation’ or ‘SEO’.
- SEO is something that the internet seems to be going mad for. Most people find out about new products or services online by using a search engine such as Google or Bing. So companies spend a fortune making sure that their websites are designed in such a way as to be easily found by Google so that they appear first on any searches for products that they sell. However, there are tips and tricks you can follow to make sure that your own website and its content is designed in such a way that it appears high up on any searches. However, to get good SEO is a lot of hard work which is why I’ve placed more importance on paid marketing (even with a limited budget it can be very effective!). If you are designing a new website though and follow the tips outlined here (all 101 of them) then you’ll find that you start rising up the search rankings. And don’t forget if you’re selling through sites like Amazon than they already feature highly on google! If you want more detail on SEO this book that is available for purchase here is also highly recommended.
So I hope this article (and it’s predecessor) have given you a good idea of the steps needed to set up an online business. As you can see it’s a lot of hard work but it can be very rewarding. The hardest part is having an idea – once you’ve got that you’re on your way. I’ll be putting these steps into practice soon once I’ve got Money Mental clothing underway. So far I’m up to a £100 of the £500 budget I want for getting the business underway so look out for future blogs about my progress soon! And as always if you’ve got any recommendations or advice you’d like to share with readers please feel free to comment in the comments section below.