When starting a business the first thing you need to consider is the necessity of your product or service. If there isn’t a need for your product, how will you attract consumers?
You need to find a way of filling the gaps, identifying any issues in the market and then offering a solution. What is your unique selling point (USP)? Ask yourself, does the problem you want to fix actually exist?
People get so hung up on inventing something unique, an idea, product or service nobody else is already offering. But there is very little in business that is truly unique. Focus on being better than the competition instead of looking for something new.
Every business should be customer and market-led. Your prior research should illustrate this. Research is not just useful to know, it’s critical and you should spend a substantial amount of time doing it. It is only by fully researching your market and customers that you understand their needs and how to differentiate your offering. Analysing your audience, identifying your USP and understanding your market are essential.
When I started my recruitment business Alexander Mann, I decided to only charge customers if we were successful in making a placement. I hired the best sales people and focused the business on financial services recruiting. By targeting one sector, I was able to quickly become an expert and set myself apart from the competition. Being a niche market player makes you a leader.
A USP can be applied to lots of different components of a business including customer satisfaction. Don’t forget the value of customer service. If a customer knows they will receive next-level service compared to your competitor then they are more likely to come to you.
Emma Watkinson founded SilkFred with her Start Up Loan. The business is an online fashion retail platform, however the difference with this site is that it specifically sells independent and emerging designers. The team handpick designers featured on the website, checking the quality of the items they produce to ensure they meet the same standards.
By focusing on independent and up and coming designers Emma has ensured her website offers something different to the other fashion retailers in the marketplace. Customers know that when they purchase items from SilkFred they are accessing products they wouldn’t necessarily be able to buy on the high street or from other websites.
In crowded markets it can be harder to find your USP but with so much competition it is a key component of success. Don’t try to be everything for everyone. Remember to focus on your customer and their needs: by trying to please everyone you often end up pleasing no-one.
Know your audience, how to target them and put yourself in your customer’s shoes. Once you have defined your USP it is a lot easier to promote your business, stand out from the crowd and disrupt the market.
James Caan is chairman of the Start Up Loans Company. Each fortnight he tackles a different business issue.
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