Thursday, March 09, 2006

Segmenting your market

What keeps entrepreneurs awake at night?

Before answering that question, you have to know which part of the small business market you're targeting. It's Marketing 101: this market is so huge and so variegated that anything you can do to segment your preferred audience (young entreprenurs, female business owners, manufacturers, startups in Manitoba, etc.) will result in finer targeting and produce better results.

Case in point: A January 2006 Industry Canada study of financing for young entrepreneurs.

Here are the "Perceived Obstacles to Business Growth and Development" identified by the study. As you will see, it found significant differences between young entrepreneurs and older ones.

Problems Facing Young Entrepreneurs

Finding Qualified Labour: 40%
Obtaining Financing: 39%
Instability of Demand: 25%
Levels of Taxation: 23%
Low Profitability: 19%
Government Regulations: 19%
Equipment Renewal: 13%
Managerial Skills: 11%

Problems Facing Older Business Owners
Levels of Taxation: 40%
Finding Qualified Labour: 38%
Low Profitability: 34%
Instability of Demand: 33%
Government Regulations: 29%
Obtaining Financing: 23%
Equipment Renewal: 17%
Managerial Skills: 6%

If you're targeting younger entrepreneurs, for instance, you wouldn't worry so much about taxation or high taxes. You might, however, focus on financing solutions. One thing is clear: both demographics are equally concerned about finding good help.

Why do young entrepreneurs matter? Well, apart fom the possibility of them being good customers for the next 30 yars or so, they are stepping up to the plate now and starting or buying businsses as more and more baby-boomer entrepreneurs look for a change or outright retirement. This is a market you need to know.

No comments: