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How To Come Up With The Right Target Market For Your Small Business

[ 0 ] Aug. 29, 2013 | SBO Editor

Once you have a profile of your customers in terms of age, gender, income level, geographic area and interests, focus your time, energy and resources on those who are, or may be, your best customers. It is important to do this because you have limited resources and cannot be all things to all people.

Business experts often cite the “80/20 rule” to emphasize this point. As a rule of thumb, 80 percent of your profits derive from 20 percent of your customers, and 80 percent of your sales come from 20 percent of your typical line of products or services. To see if the 80/20 rule applies in your business, make a list of your best customers and a list of your best products and/or services. Next, see if you are reaching your target market.

List 10 ways you could do a better job of reaching your targeted customers — the 20 percent that gives you 80 percent of your business. What are some good approaches to targeting your market? Try to focus on a particular geographic area (perhaps a 25-mile radius of your place of business); your best-selling product or service (if you have a winner, promote it); and the people most likely to patronize your business (farmers, professionals, families with small children, sports fans).

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Category: Features