You don’t just wake up and enter any market. There are key things you must look out for when choosing your market if you truly want to succeed in your trade or business. [Read Part I HERE]
Firstly, the market must desperately need what you are offering them. Here, your supply must address a massive pain point, and the pain can be anything that frustrates people in their lives.
Like someone said, ‘The pain is the pitch.’ The market will be drawn to any solution that addresses their pain. The degree of the pain will be proportional to the price you will be able to charge the market. And this market must have the capacity to pay for whatever value you are offering them.
2. Does the market have purchasing power?
Next to demand and supply is the market’s ability to pay for your offerings. Beyond the fact that the market needs your solution, they must be willing and able to afford what you’re offering them.
So, make sure your target market has the money, or access to the amount of money, needed to buy your services at the prices you require to make it worth your time. Intentionally focus on the market that can pay what your solution is worth. If nobody is buying your offering (product or service), your business will fail.
If an audience doesn’t have the money to buy what you’re selling at the price you want to sell it for, you don’t have a market. It’s always fun to sell something that people are already ready and willing to buy for the value you are offering them.
It has been said again and again that all purchases or investments are trying to solve a problem of some sort. Money is nothing more than a means of exchange between a buyer and a seller, and it changes hands when the seller has a product or service that the buyer is willing and able to pay for.
Always remember that the reason people pay for any product or service is to get value from it. That is, what they are getting is worth more than what they are giving in exchange for it. Like Warren Buffet said, “Price is what you pay. Value is what you get.
3. Does the market have the potential to grow?
An author and entrepreneur, Alex Hormozi wrote, ‘Growing markets are like a tailwind. They make everything move forward faster. Declining markers are like headwinds. They make all efforts harder.’ By market here, I mean your total addressable market. A business can really only grow to meet the total addressable market.
One of the litmus tests of a growing market is to answer the question: will there always be needs to be filled in that market, with or without technology now and in the future? So, if there is no immediate and perceived future demand for your solutions in that market, think about that market again.
Whatever market that you choose to serve must be large enough to sustain the business and give room for growth, and also niched enough to make you narrow down the focus.
You must have known by now that your business doesn’t need everyone in the marketplace; it only needs a segment of the market who can’t live without you, and who find your offering highly valuable.
The reality is that everyone and every business is affected by their market. Your duty now is to find a market where your solution meets their needs; that has the buying power; and that won’t disappear tomorrow because no one wants you anymore. Where these three things meet, a sustainable market is found! Picking a market, like anything, is always our choice, so choose wisely.
Tony Ajah is a Business Growth Strategist, and the author of BUSINESS SENSE, and ON BECOMING AN ENTREPRENEUR.
He maintains a personal blog, where he shares proven business ideas and principles for SMEs.
