In every business you can think of, understanding your customer and their needs/ problems is key to success.
In order to set up your business/ or do them successfully, you must first of all understand and internalize these three (3) major things:
- What a business
- Who your customer is
- What specific problems you’re solving for them
So first of all,
What is a business?
According to Wikipedia, Business is the activity of making one’s living or making money by producing or buying and selling products (such as goods and services). Simply put, it is “any activity or enterprise entered into for profit.
It’s also highly necessary to note that: There are three basic types of ‘Business organizations’ and forms ‘Business ownership’.
Types of business?
This is classified into three major categories:
(a). ‘Service-based’ Business
This type of business provides intangible products (products with no physical form), they simply convert their services to products that you cannot touch. Service-based firms offer professional skills, expertise, advice, and other similar products for financial reward.
Examples of service businesses are: schools, banks, advertising firm, Internet Service Providers, Google etc.
(b). Manufacturing Business
This type of business buys products for the sole purpose of using them as materials for creating new products. Hence there’s ‘processing’ into final product of the original products purchased
So a manufacturing business makes use of raw materials, labor, and factory overhead to cycle its production process. The manufactured goods and usually done in bulks and supplied to customers for cash. Eg; Cadbury’s, Nestle, Nigerian Bottling Company etc.
(c). Merchandising Business
This type of business serves as middle-men between manufacturers and end-users. They are usually retailers; buying products at wholesale price and selling the same at retail price. They are known as “buy and sell” businesses. They make their money selling products at prices higher than their purchase costs and they usually buy from the manufacturers in large quantities.
So simply put, a merchandising business sells a product without altering the physical form of the product. Examples are: Eg Everyday Supermarket, Shoprite, grocery stores, convenience stores, distributors, and other resellers.
Then we also have the Hybrid Business
This is usually classified as business that is focused on more than one type of business. But I won’t be going into that as my major area of interest is in the three major types specified above.
ii. Forms of Business Organization
Now in order to help us to really understand all of these clearly, let’s look at the major forms of business that we have globally.
(a). Sole Proprietorship
This is a business owned by only ‘one person’. It is easy to set-up and is the least costly among all forms of ownership.
In this form of business, creditors of the business may go after the personal assets of the owner if the business cannot pay them.
It’s usually embraced by small business entities or starters.
This is a form of business owned by two or more persons with mutual interest and contributing resources together towards the growth of the business entity. The partners divide the profits of the business among themselves.
There are two types of partnerships namely:
- General Partnership
- Limited Partnership
In general partnerships, all partners have unlimited liability whereas in limited partnerships, creditors cannot go after the personal assets of the limited partners.
This is a business organization that has a separate legal personality from its owners. Ownership in a stock corporation is usually represented by shares of stock.
The owners (otherwise known as stockholders) enjoy limited liability but have limited involvement in the company’s operations. There’s also the board of directors, which happens to be an elected group from the stockholders, who controls the activities of the corporation.
Outside these specified three basic forms of business ownership, these are also some other types of organizations that are common in today’s business world; for example:
Limited Liability Company (also known as LLCs)
This is a Hybrid form of business that have characteristics of both a corporation and a partnership. Basically, an LLC is usually not incorporated; hence, it is not considered a corporation.
However, the owners enjoy limited liability like in a corporation. An LLC may be taxed as a sole proprietorship, a partnership, or a corporation.
We also have the cooperative kind of business which usually is a business organization owned by a group of individuals and operated for their mutual benefit. The constituent members of the group are known as members. Cooperatives may be incorporated or unincorporated.
Examples of cooperatives are: water and electricity (utility) cooperatives, cooperative banking, credit unions, and housing cooperatives etc.
Having properly figured out what a business is, so who is your customer?
Who is your Customer
You can never set up and operate your business successfully without first understanding who your customer is. So business we find who your customer is, let’s look at the definition of who a customer is.
Ok, Investopedia simply puts it in this way: A customer is an individual or business that purchases the goods or services produced by a business. Attracting customers is the primary goal of most public-facing businesses, because it is the customer who creates demand for goods and services.
There’s more that goes into all of these ranging from your obligation to your customer and vice versa; which I cannot cover extensively in this single post as they appear not to be my area of primary focus.
One of the first major products that I promoted in the early years of my business in the internet marketplace happens to be organics (slimming tea to be precise). So I was focused on making money from helping people lose some weight and live healthier lives as well as increase productivity and longevity doing so.
So I knew exactly who my target audience were as at the time and even now (these were the people that form a larger crust of my huge customer base).
I researched the internet extensively on websites that talked about weight loss, checked out several winning Ads online, visited lots of forums and schedules chats with people going through issues with the problem I intended creating solution for.
I designed a near-perfect ‘Buyer-persona’ for my business and hit the ground running with it.
Therefore, in order to really build a successful business online, you must be able to identify your customer’s problem and genuinely identify with them on that very problem; but you cannot do this without touching their point of need and creating a very strong connection between you and them because people will always buy from those who they know, love and trust.
So I discovered who my customers is by identify what problem they were struggling and then, I got rewarded for providing solution to that problem. I also knew exactly where to find them.
What specific problems are you solving?
You can’t build a serious business by being a “jack-of-all-trades”. Success requires speed and this you’ll never achieve when you lack focus.
So what is a problem first of all? According to Wikipedia, a problem is a situation preventing something from being achieved. The word comes from a Greek word meaning an “obstacle” (something that is in your way). Someone who has a problem must find a way of solving it. The means of solving a problem is what is called a “solution”.
Every single problem out there is an opportunity to grow, be more profitable, become better or simply improve our lives.
Until we start seeing life that way, we might never make a headway in life. Where other see problems, I usually look beyond to see nothing but solution because that is how I have trained my mind to see things and function as well.
You’re not called to solve every problem on earth; so you need be laser-focused, build a brand around something, provide a solution in that field, get known for such and get paid too.
So, when people mention your name or brand, what do they easily associate you with?