If youâ€™re thinking that purchasing a franchise concept that appeals to as many people as possible equals success, think again: targeting a narrower customer base may be a better way to go.
As a new franchisee, you want to distinguish yourself â€“ I mean, letâ€™s face it: youâ€™ll have lots of competition to deal with, and you want to secure all the advantages you can. There are two primary advantages to selling a specific product to a particular subsection of the public:
1) Less competition: Market specificity = less financial risk for investors and banks/lenders = higher chance of securing necessary funds. The ability to prove that there is a demand for your product/service makes obtaining funds that much easier.
2) Sufficient time and money for marketing: Attempting to grab the attention of the general public can be quite time-consuming, not to mention expensive. With a single, specific group of customers as a target audience, youâ€™ll undoubtedly spend less and save more in achieving your goal.
Before you make any major financial decisions, however, make sure to do your due diligence. Does a specific need for your product exist? Interview members of the population you wish to target and monitor potential competition. You donâ€™t want your competition to be overwhelming, but you also would like a few of your competitors to be up and running, just to prove that there is, in fact, a market for your product or service.
Also, be sure to investigate your competitionâ€™s annual earnings â€“ how have their earnings changed from year to year? Hopefully, theyâ€™re well-established (that is, theyâ€™ve experienced a steady climb in earnings) â€“ then they wonâ€™t view your presence as a threat, or may even see your presence as a positive force that might create additional demand.