One of the golden rules of marketing and business is to know your industry and your audience first.
One of the main reasons a business will fail is because its owners don’t know their own industry. You need to have an in-depth knowledge and analysis of the industry you’re in if you’re going to succeed.
So how do you know your industry?
That’s exactly what we’re going to delve into in this article.
By the time you’ve finished reading this article, you’ll know what you need to do to intricately know your industry and get a leg up over your competitors because you can bet they probably aren’t researching the industry either.
How Is A Profit Made?
Look at your industry and ask yourself, “How is a profit made in this industry? How are my competitors making a profit?”
We know this seems incredibly obvious, but many business owners never ask this question. And it’s one of the most important questions you should be asking. After all, if you can’t make a profit then you’ve got no long-term business.
And the key lies in knowing how to make a profit. One of the easiest ways to start is by looking at what your competitors are doing to make money.
You need to analyse all the expenses you’ll face operating a business in your industry; whether it’s startup costs, purchasing wholesale goods to resell, etc.
Will there be any potential logistical issues with your business?
You must consider whether or not there will be problems obtaining your products and then shipping them to customers. The last thing you want is to receive a customer order only for there to be a massive logistical problem you didn’t prepare for, therefore affecting your order and your customer’s experience with your business.
Being prepared is the most important step in determining your logistics. Think about potential obstacles and the process of shipping goods and you’ll be well-prepared.
What Do Your Customers Want?
Without knowing who your target market is, you’ll never create products or services that fill that audience’s specific needs.
The only way to understand your target market is through target market research. You need to intricately understand their deepest fears and problems. You need to understand what makes them tick if you’re going to give them a product or service that helps them.
The way you do this is by narrowing down who they are using demographics and psychographics. You can then use this information to create a customer avatar. Turn your avatar into a real person so you know exactly who you’ll be marketing to.
It’s vital that you analyse your competitors. Look at how much profit they’re making. Look at how they’re getting their customers. Look at their logistics.
Analysing your competitors does a number of things. It allows you to get an idea of how you can run your own business and it allows you to identify any problems they may have that you can capitalise on.
For example, you may notice your biggest competitor has a logistical problem in delivering their product to customers. Maybe it takes them 60 minutes to deliver the product but you found a way to reduce the delivery time to 40 minutes. You could then use this as a differentiator or unique selling proposition (USP) for your own business.
This is the kind of opportunity that can be gained from competitor analysis.
Understand Your Industry Overall
You need to have some overall understanding of your industry first. We have already mentioned some of the things you should already know such as your target market, competitor analysis, and more.
However, you should also explore factors such as the economy and what kind of impact this has on businesses operating in your industry. You should explore the prospect of growth.
Is your industry a high growth industry or a slow growth industry? What are the potential opportunities for long-term profit and sustainability?
Look at how many companies are operating in your industry. What products and services do they offer? Are these companies affected by cyclical or seasonal changes?
What about the customers in the industry. How often are they buying? Do they buy in fits and spurts or do they spend a lot on the one shop?
Then you should also consider any potential legal hiccups starting a business in your industry. What business structure is best? What are your legal obligations for operating and starting a business in this industry?
This is the kind of industry analysis you should be undertaking.
Closing: Starting A Business With The Right Industry Knowledge
Hopefully, by now, you can see how important it is to know and understand your industry.
Without an in-depth understanding of your industry, you’ll never know whether or not your business idea will even work, let alone if it will be profitable and sustainable.
Knowing your industry is the first step before starting a business and you should make sure you do your research first. Doing this saves you time, effort, and money.
Still not sure whether or not your business idea will be ideal for your industry? Then get in touch for a free quote and consultation.