Running your own business and being your own boss can be an incredibly rewarding experience, but it can also be incredibly challenging: you will need to learn how to sell, market, do some accounts, budget and plan cash flows, among others. You will also need to invest some money upfront. It may seem a little daunting but with the right planning and information you can succeed and accomplish your dreams. Read on for part one of our definitive guide to setting up and running your own trades business.
Get Together a Plan
Writing things down is crucial for success. It forces you to justify how exactly you are going to do it, to question things that don’t add up so you can improve them, and when you start going - and are busy, tired and stressed - it offers a map to keep you are track.
You will only be a happy one if you manage to fulfill your objectives – Whether that is simply the thrill of setting your own hours or making lots of money…Or both. Be clear to yourself so you can plan properly.
The first step in the process is to understand if there is anything in the wider environment that is, or may, affect the demand for your services or ability to run your business. You might be thinking everyone needs a plumber, but broke pipes are not the only reason why they need your services. How much of your work is because someone built an extension? Or decided to do some upgrades? These are not essential items and in times of economic downturn many people will decide to shelve these plans, cutting demand for your services.
The above is an example of an economic factor, but it is necessary to example things from several perspectives, traditionally called a PESTEL analysis: political, economic, social, technological and legal. For example, looking at legal, you may find there is new legislation planned that could result in you needing to buy much more equipment or get new licenses.
If you are already working for a big company doing the job and have decided to go out by yourself, before you do so start paying attention to the general environment, pick the brains of management, read industry magazines, and gauge optimism. If the business is thriving then no problem, but if your firm is cutting people, you might want to wait until you get your redundancy pay or the economic environment improves.
If there is a downturn then you will definitely have to fight harder for work, but, even if the economy is buoyant, you should still attempt to understand the competitive environment. You should Google to try and find the number of similar businesses in your area. Are there lots of large businesses in your area spending a fortune on ads? Have they driven down wages? These are all factors – among others - that will impact how you go to market - Even if the sector is thriving it might well be that the big company is successfully scooping up all the business and you need to look around for niches.
When you have competition, you have to be able to say how you are going to get your services in front of potential customers and then tell those customers why you – Unfortunately, it is not Hollywood and in the real world when you build it they don’t just come.
If you are semi-retired and not in a hurry, you can let your network know that you are now running your own business, and then wait for the one customer from your network who doesn’t know how to search Google to call you up, grateful to have heard of your services. For the rest of the people with mortgages to pay you will need to do promotion and to do that better you need to segment.
What is Segmentation?
Segmentation is about breaking your potential target customer market down into different groups to understand their different product requirements and purchasing habits. It is extremely beneficial for several reasons, but most importantly because people like personal service and promotion costs money. Ideally you would tailor promotional messages to every individual in the world, but that would be prohibitively expensive. You can, however, look for common characteristics, organise them into groups and promote to them as a segment.
In addition, once you have identified these groups, you can try to see if there is one which is likely to be more availing of your services and prepared to pay more money for it.
If we continue with our plumber from above. By breaking people down into groups, we might find that middle class young families who are living in a certain area of the city where the houses are old or small, are likely to need extensions. Once you know this you can target them better in the following ways:
Firstly, you can tailor your messaging to not just mention you are a plumber but describe in your ad how you have successfully delivered X number of extensions. What do you think people are more likely to listen to?
Secondly, you can make sure your promotion is targeted to them. When you create your Facebook or Google Ads you can put this as part of targeting and ensure that lots of people who were not part of this group, don’t’ click on your ad and waste your money.
Offline and Online
This targeting is even more relevant to things like mail drops or flyers. Do you want to print 10,000 copies knowing that most will just go to the recycling bin or several hundred that go through the right letter boxes? It is your marketing budget!
In the above example, segmentation revealed the most profitable segment, but it also helps in other ways: it may well be that your competitors are also targeting that group and it is extremely expensive to advertise to them. You might find another group that your competitors are not targeting. It might be a little less profitable but – based on your circumstances and budget – it may be a possible, more realistic route to market.
In the above examples, the focus is on using information about a segment to help you write messaging and find buyers more effectively. With niche marketing your research shows a group that needs to consume your service in a different way. A niche might be those with a physical and mental impairment, which means you have to amend your service to fit them. In a competitive world this may be your opportunity to get a foothold in the market.
Once you have segmented the market, your next step is to get together your buyer personas and a promotion plan. In a buyer persona, you take that information from the segmentation and create a profile of your ideal buyer so you can ensure you target them with the correct language, and in the right place.
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