In previous blogs we have looked at the huge numbers of small businesses in the UK - in fact 99.9%. Small business numbers have grown 55% since the year 2000. My daughter and her husband visited us over the weekend and I guess their experience is typical of many start up businesses. Unlike the traditional trades - painters, plumbers, plasterers, carpenters etc - their fledgling business is an online store selling personalised clothing to the equestrian fraternity. They both have full time day jobs, have a young daughter who is involved in sports clubs and needs to be taken to and from which means they are developing their business in their spare time. Very soon they have recognised a need for marketing and asked my advice. In a nutshell do as much as you can for free, in particular using social media and don't spend cash on display advertising and directories. But do use your customers to endorse your product and use word of mouth third party recommendations.
My first step would be to really understand the market they are addressing and that starts with research. I have no experience of the equestrian market at all - the sector of interest to them - but just a click away the British Horse Society offers an interesting page titled 'Equestrian Statistics' and straight away I spot that their trade association had conducted market research as recently as 2015. Some 1.3 million people from amateurs to professionals ride horses. This struck an immediate chord that this is more than an industry, it is a hobby, interest, a passion and probably an obsession for a significant number of people ... people who will willingly spend on anything than is related to their passion. In my analysis it is likely to exhibit traits I have observed in other market sectors I am familiar with such as amateur dramatics and dance, which have a similar diversity from amateur to professional, not just participating but also as an audience. The next interesting statistic is 74% of riders are women - already we are beginning to get a feel for the target audience and are upon the way to identifying and defining a persona representing the target audience.
It is worth taking the time to develop a Market Analysis which need not be a complex document, but should still be written down. Here are some key points to cover:-
- About your company - as a start-up there will be little history, but you can identify the 'nature of business,' type of business, size and where you operate.
- Products and services - what is the range of products you offer and what services do you provide.
- Competition - who are the existing businesses in your market sector, how do their products compare to yours - e.g. for range and for quality. What sort of businesses are they? Big/small/well-established/new? How do customers view them or rate them?
- Target markets. Operating on the Internet, enquiries might come from anywhere which prompts the question, do you want to export products yet? Will you get paid? Do you want all the paperwork? I suggest you start with a local geographic area you can support and know, before reaching out to the rest of the UK, except for the highlands and islands, because couriers don't all handle those areas.
- Target audiences. We have already touched on this and it is important to identify who the customers will be for your products. You can start by examining the customers you have already - age, interests, location, male or female etc. and what media do they consume, especially social media such as are they on Facebook a lot, read equestrian magazines etc.?
- Route to market. You will probably start with direct sales one-to-one with your customers. But how will you deal with people who want to hold stock and take orders on your behalf, because they will want a discount and can you afford that?
- Draw up a short survey to find out why they bought your product, how they found out about you, what they like about your product and would they recommend you to a friend?
- Ask if they will let you use them as a reference - a third party endorsement is regarded as more honest than paid for space.
- Offer them a small discount on their next purchase if they recommend you to say 3 friends.
Few start-ups will have cash to spare on display advertising so be aware of the advertising space sales people who call to offer a great deal. Today there are several 'free' options that can be used quite quickly.
Here are some suggestions to work at getting the 'word' out about your business without spending money.
- Press releases - send interesting news stories about your product or service to special interest magazines and web sites covering your target market - include a good quality and interesting photo. Send to local press too - they like local business news, but don't let them sell you and advertisement.
- Short videos - show customers wearing and talking about your product - post to YouTube, Facebook etc
- Newsletter (html) - new products etc for emailing to customers; add email request on your web site. Don't send too often, you probably haven't the time anyway, but quarterly would be good or when you have an important new product to announce.
- Set up a blog - offer helpful information, link to other relevant blogs and web sites and build an audience.
- Use Twitter - 140 character headlines and shortened links to the full story on your web site.
- Use Pinterest - themed photos relevant to your products.
- Use Instagram - more photos!