- Community, Advice
9 questions to ask before you build your business
Identifying your market – meaning the pool of potential clients to whom you will sell your products – is an important first-step for freelancers of all industries. You don’t want to simply offer a service and hope customers come, which is what inexperienced business people too often do. You need to think about the market, or niche, you will serve.
Will you offer editing to college students or to publishers? Will you offer music instruction to adults or to schoolchildren?
By identifying and knowing your market, you can tailor your services to what your customers want and more easily reach them to tell them about your services. When you're running a business of one, trying to be everything to everyone just doesn’t make sense.
So, how do you choose your market?
It’s easiest to choose one that you actually belong to or that you have had close contact with. If you are a dog owner, you may see that other dog owners in your neighborhood are busy professionals who need a dog walker. If you’ve worked as an editor for magazines, you may see that magazines are downsizing and are eager to outsource copyediting and proofreading. You could identify lucrative markets that you’ve had little or no contact with, but that will take extra research and networking to do well.
You can evaluate your potential market based on how much opportunity you will have within it. It will be easier to succeed in markets with more opportunities – conversely, a market with fewer opportunities will be more competitive.
In thinking about potential markets and potential services you could offer, look for these opportunities:
Is the market growing, with new potential clients who need your service?
For example, a new type of nonprofit organization—say, groups organized to raise funds to fight a disease—could offer opportunities for freelancers providing bookkeeping or fund-raising. A new type of business—such as coffee shops in the last decade or so—may need marketing help. Users of a newly popular electronic device—like the personal computer in the 1980s—may need training.
If the market isn’t growing, is the need for your service growing in the market?
If your service has been offered to a market for years, clients will probably already be working with freelancers they like. Winning their business will be a lot more difficult than winning that of clients just realizing they need your service.
For example, in the 1990s companies found that they needed a Web presence, so practically anyone who could create a Web page could find work. Today that market is much more difficult to break into. Changes in technology and changes in the law often lead to new needs.
If neither the market nor the need is growing, can you compete with current providers of your service?
Clients are not likely to switch to you unless you offer a clear advantage. Are you better, faster, or cheaper? Will it be obvious to potential clients that they will benefit by giving up a known vendor and going to you, someone relatively unknown?
Perhaps employees are currently doing the work you offer, and you can make the case that outsourcing to a freelancer will save the company money and allow greater flexibility.
Be sure to consider these things too:
Is the market easy to reach with inexpensive marketing?
Do potential clients read particular publications? Do they regularly visit certain Web sites? Are they on mailing lists you can obtain cheaply? If your only option is advertising in the mainstream media, the return may not be worth the cost.
Are members of the market likely to talk to each other about your service?
The cheapest and best marketing is word of mouth, but if your market consists of competitors, they are not likely to spread the word on how good you are.
Will the market provide you with repeat work?
Having to constantly find new clients is difficult and expensive. If you can market through word of mouth and if the clients you find keep coming back, you can lower marketing costs and your effort to near zero.
Do members of the market buy solely based on cost?
If your clients don’t consider quality, they will always find someone willing to work for less than you. Individuals can often be penny-pinchers, whereas companies and organizations have less of a problem paying professional fees for quality work.
If you don’t live in the same place as the market, can you serve it remotely?
The Internet has certainly increased the possibilities for working remotely, allowing instant communication, virtual teams, and cheaper marketing.
Are members of the market likely to be good payers?
It will do you no good to do work and get paid slowly or never get paid at all.
Don't begin building your business before considering your market. We've all seen products that launch with a flurry of publicity, only to fall flat as it becomes apparent that no one actually wants a segue or a New Coke. Ask yourself these key questions before you put money towards your business venture – you'll be glad you did.
This is a post from a member of the Freelancers Union community. If you’re interested in sharing your expertise, your story, or some advice you think will help a fellow freelancer out, feel free to send your blog post to us here.