About 8 in 10 businesses survive to see their first anniversaries, according to Forbes, but that number drops to 5 in 10 after five years. That’s why it is imperative that entrepreneurs choose a viable venture and follow several key steps when they’re first starting out. Following are a few of these important steps.
Product or Service Ideation
The ideation phase is when an entrepreneur decides what he’s going to sell. If he’s marketing a product, he must decide whether he’s going to produce the product himself or purchase it from a wholesaler. If the entrepreneur has an invention he wants to sell, it is best to manufacture the product because he likely has a patent on it. But if the business owner decides to purchase the product, he’ll need to consider the capabilities of the producer and whether it can get the items shipped in time.
Target Market Analysis
Target marketing enables business owners to ensure they’re spending their advertising dollars on people who are most likely to purchase their products, according to Inc. However, the target audience must be large enough to sustain the business long term. Target markets can be segmented by demographic groups (i.e. age and income) or particular characteristics like opinions or attitudes.
Creating a Business Plan
A successful entrepreneur will always create a business plan before opening his doors. The business plan is like a blue print of the business, which includes a company description, products or services the firm offers, marketing strategies, organizational structure and even a sales forecast for the first five years, according to the U.S. Small Business Administration. And the sales forecast will be essential if the owner needs to finance his business through a bank.
Promoting the Business
Entrepreneurs must decide how to best reach their target audience when deciding on an advertising or marketing strategy. If the business owner runs a local retail establishment, for example, he might use promotional flyers or cooperative direct mailings. However, in today’s marketplace, it’s also essential for entrepreneurs to optimize their websites for major search engines and market their wares through social media.
The most savvy business owners know the importance of tracking the results of their advertising. If a business owner uses digital marketing strategies, he can have his website set up to track which campaigns are eliciting the most traffic. And there are a ton of companies out there that provide these services. Tracking ad responses will help the entrepreneur determine which ads are profitable. The business owner can then adjust his advertising mix to get better results.