If you’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 – I mean, let’s face it: you’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, you’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 don’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 competition’s annual earnings – how have their earnings changed from year to year? Hopefully, they’re well-established (that is, they’ve experienced a steady climb in earnings) – then they won’t view your presence as a threat, or may even see your presence as a positive force that might create additional demand.