How Do You Determine the Needs of Your Target Market?

When determining what business to start, the rule is to find out what the market needs and wants, and then address those needs in that kind of business. But how exactly do you find out what your target market wants?

Let's use as an example one of the questions asked at Yahoo Answers -- "What business can you start that caters to the Overseas Filipino Workers (OFWs)?"

OFW is the term used for Philippine citizens who work overseas on contractual basis. Examples include nurses, maids, caregivers, construction workers, crews in cruise ships or shipping vessels, etc. Labor is one of the top exports of the Philippines, and in 2006 government estimates showed that there were 1.5 million OFWs.

OFWs are hailed in the Philippines because of the tremendous contribution they give to the country's economy. Remittances or money sent by these OFWs back to their families in the Philippines amounted to $12.77 billion in 2006. Given the strong family values in the Philippines, it is common to find overseas Filipino workers sending half (or even more) of their income back to the Philippines -- and that foreign currency inflow has significantly helped the Philippine economy.

If this is the target market, what do they need? Often OFWs need:

• A way to send remittances to their relatives and family back in the Philippines easier and less expensive.
• An inexpensive and safe way to send boxes of goodies (called "balikbayan" boxes)
• An inexpensive way to contact their families in the Philippines (e.g. inexpensive phone cards, free texting services, etc)
• A service that will allow them to communicate with their families -- think videoconferencing service for example

But the above are markets where most businesses catering to OFWs go, which means the market is a little crowded and very competitive. Western Union, for example, is a popular service used to send remittances. Philippine banks with overseas operation also offer remittance services. Even the country's biggest media companies such as the ABS-CBN have gotten into the remittance game.

So if you are planning to reach this market, it is important to think of other services needed but not currently addressed, or niched areas that the big companies haven't bothered to get into. Examples may include:

• Address the need of OFWs in finding trustworthy recruitment agencies. OFWs typically use recruiters to help them find jobs abroad and facilitate the processing of their employment (e.g. visas, health exams, etc). Given the number of scams and fraudulent recruitment companies, many OFWs find themselves tricked into giving substantial placement fees but no overseas jobs. A review site listing rating the reputation of recruitment agencies and other OFWs enumerating their experiences with a particular agency would be extremely beneficial.
• A directory of OFWs working in one country. One of the questions of OFWs before leaving for their work abroad is: "Who do I know who is already in Dubai/Hongkong/Taiwan, etc?" Creating a website that lists who are in New Zealand or Saudi Arabia may be useful.
• Social networking site for Filipino workers in a particular country such as Hongkong. It is natural to find fellow countrymen in other countries, and Filipinos are no exception. Hence you have Filipino maids in Hongkong gathering in parks on Sundays during their dayoffs. Even in the US, you go to an area such as Bangor, Maine for example and ask around if there are other Filipinos in the area. Think of a more adult and mature Friendster, this time for OFWs

Look at your target market. The only way you can determine what they need is by getting to know them. Look at how they live their lives, and make a list of what they need. Then think of a way to address those needs.

End of the Year Checklist

It's the end of the year again. After all the eating, shopping, and merrymaking of the holidays, take time to sit down and review your business. It is important to assess how your business did during the year.

Here are some checklists for your end of the year review:

• Do your financials. If you are like some home business owners who don't do their financials on a regular basis (or worse, do the financials only once a year for tax time) now is the time to start doing your profit and loss statements, etc. Get a clear picture of how well you did with your business by determining your actual income and expenses for the year
• Analyze your financials -- where is your revenue coming from, what are your biggest cost items, who are your biggest customers.
• Make a list of what worked -- and what did not work -- for you this year. Look closely at your products and see which ones are doing well, or which ones you've seen decline this year. How about your suppliers? Or your processes? If you have a website, what type of product or content does your visitor want?
• Review your marketing. What strategies brought the most customers? What is the most cost effective strategies? Are there ways you can cut down the costs yet get the same -- or even better -- results?
• Know your customers. Now is the time to get a clear idea of who your customers are. Some businesses have a clearer view of who their customers are, while some do not. For example, a landscape business owner knows that home owners in his area are his target market; but a blogger may not exactly know who reads his blog and why. If you are the latter type of business owner, devise some ways you can get a better picture of who your customers are.
• Review your website. Sit down and think what content or products you need to offer next year. Go through your website statistics and study the data, including traffic levels, what pages are perused the most, where your traffic is coming from, etc. Check to see if there are any pages you need to overhaul or misspellings you need to correct.
• Make a list of what you need to do next year. After your review, start thinking of what strategies and approaches you need to do next year to take your business to the next level.

Read the complete end of the year home business checklist

How Easy is it to Create a Successful Site?

A lot of people are lured on the prospects of making money on the Internet. They have heard or read about how others are making thousands per month, even more, just by having a website.

Until they actually start and find that it is not actually easy.

Success on the Web depends on a lot of factors:


- Do you already have a business model -- e.g. do you know what to do? The first thing is to identify what you really want to do, and determine how you think you can compete in that space.

- Research about what people want that are not being addressed by existing sites. Unless you are starting a totally new concept, chances are high that competition in your space already exists. How are you going to compete with them and what new things are you going to bring that they are currently not giving?

- Look at the technologies needed. Determine and evaluate the technological requirements, and assess how you will provide it. Do you know how to program? What does the business needs to have to actually run? How do you maintain it? If you have the resources, it would be easy to just hire programmers to help you create the site. But if you don't have the know how and the resources, then it will be very hard to see your plans into fruition.

- Think of scalability. If you are anticipating a popular site, you can't use free web hosting. Even if you start with a shared hosting, think of how you can be able to accomodate thousands of visitors coming in daily. You need to think of that from the get go.

How easy is it to create a successful website? It can be easy if

• you know what you want;
• you have an idea of what you need;
• (c) you've got the knowhow to make it happen.

What Changes Are You Planning for Next Year?

It's the end of the year again, and it's time to take stock of how our business performed this year and to take stock of what we did (and did not do). Then of course comes the exciting part -- making plans for next year.

The problem sometimes with being small or home based entrepreneur (moreso if you are a one-person business) is this tendency to forget to stop and review how the business is going. Who has time to think of what was done when there's a million and one things that needs to be done -- yesterday???

But stopping for a while to look at where you've been is important. Did you reach your target revenue goal? Did your plans work out this year? Are you marketing better? Are you enjoying what you're doing?

Last year, we made recommendations for New Year's Resolutions for home business entrepreneurs . If there's any you can add, do let me know.

How to Hire an Accountant for Your Business

The tax folks at J.K. Lasser sent us a press release today that provides tips on what a small business needs to look for when hiring an accountant. It is not easy to find an accountant that you can trust, much less really look out for your interests.

According to J.K Lasser, the following are the questions you need to ask prospective accountants:

• How are you going to help my business grow? Ask for an outline in writing.
• Are you a tax planner or a tax preparer? You will want to meet with your accountant once a year for both strategic and tax planning.
• What benchmarks will you help me set for my business, so that I can track my projects? An accountant specializing in small business finances should be able to help you set month-by-month goals to chart your progress.
• How tech savvy is the accountant? Are you going to have to print out your accounts to hard copy or can you simply transfer everything electronically? What kind of software are you going to have to buy?
• What overall services can the accountant provide besides business advice, like estate planning, gift planning, legal referrals, etc.?
• How do you calculate your fees? In a time-based fee structure, make sure to find out the hourly rate, as well as all fees for expense reimbursement.

Read the Questions to Ask a Tax Accountant

Research on Strongest Online Marketing Tactic

MarketingSherpa has a new report entitled "Search Marketing Benchmark Guide 2008" and one of the interesting data of the study is how the various online marketing strategies compare with regards to giving the best return on investment

According to the report, the strongest tactics and give the most ROI are:

• House email marketing = 25% (strongest tactic) and 39% (good ROI)
• Search engine optimization = 18% and 36%
• Paid search marketing = 16% and 35%
• Public relations = 12% and 28%
• Direct mail = 12% and 27%
• Online banner advertising = 3% and 16%
• Print advertising = 4% and 13%

You can read an excerpt of this report at MarketingSherpa

Increase Ad Revenues by Making Web Metrics Public

I stumbled across PowerHomeBiz.com's profile in the new online measurement site Quantcast.com

According to Quantcast, our site "reaches approximately 70,581 U.S. monthly uniques. The site attracts a more affluent, younger, slightly female slanted audience."

The demographic information certainly caught my attention. You have sites such as Alexa.com or Ranking.com that provides so-called traffic ranking based on the number of folks who downloaded their toolbar. They provide a glimpse of a site's traffic but no demographic information on the site's visitors.

This site has an interesting goal: by making web data public, smaller sites can broker better ad deals. Quantcast wants you to use their site to attract more advertisers by giving advertisers a fully transparent, detailed view of the audience they stand to reach. For a advertising-based site such as PowerHomeBiz.com, that is certainly an exciting proposition.

If you want more accurate data, you need to participate in their Quantified Publisher Program where you will put a code in your homepage so they can get better data about your site. The catch is that whatever data you will see is also what the public will see. Kind of scary, isn't it? I'm not sure I want the public to get a more accurate reading of our traffic and demographics.

But I looked at some of those who have signed up for their Quantified Publisher Program, I'm pleasantly surprised to see some top sites such as Wordpress.com, Gawker.com, Fox.com, Accuweather.com and others.

I guess I'll sleep on it though and think about whether I'd like PowerHomeBiz.com's traffic and demographic information out there for the world to see.

Selling Online: Lessons from the Top Home Furnishing Stores

My all-time favorite home furnishing store, Bombay Company, discontinued its web operations after the company filed for bankruptcy in October. I guess my purchases cannot keep the company afloat :o) Too bad, as I am a big fan of their cherry-colored furniture and stylish home decor items.

But there are still a wide variety of home furnishing stores out there. And Internet Retailer magazine has a very interesting article identifying the elements that work for these stores and make them stand out from the rest.

• LillianVernon.com = adds features to make the shopping experience better for customers such as reminder service, product suggestions, customer reviews and a tool that allows customers to see how a name would look on a personalized product.
• Crate & Barrel = to make their Web and store operations more seamless, added photos of individual stores in their store locator section, information on store promotions and made maps more interactive.
• Oneida.com = uses technology to help customers identify the right products such as their Virtual Table Setting tool and Pattern Identifier
• RestorationHardware.com = added an interactive catalog that allows shoppers to flip through the pages, apply virtual sticky notes and include comments about items on the pages

All the above features are seemingly must-haves if you want to improve customer experience and your bottomline. Of course, implementing any or all of them will depend on your technical and financial resources -- and with small businesses, that is always a big IF unfortunately.

You can read the full article at Internet Retailer

21 Common Mistakes of Home Business Startups

What's the biggest mistake you did when you were just starting the business? The ideal situation, of course, is to go through the process of starting a business without a single misstep. Unfortunately, that doesn't always happen. We sometimes trip; or even stumble; or worse, fall flat on our faces.

Discounting complete ineptitude and bad luck, here are some of the common mistakes home business entrepreneurs commit when starting a business:

1. Having no idea where and how to get started
2. Lack of innovative business idea, often mere imitation and not coming from some unresolved problems or unfilled needs
3. Becoming too fixated with the business idea, even if it proves to be unworkable
4. Choosing a very small unprofitable niche
5. Not focusing on the user
6. Easily believing and buying the hype of those "I make $25,000 a month" programs
7. Starting and staying as a one-person business, trying to do everything and failing
8. Not having a clear idea of who the target market is
9. Launching too slow maybe due to excessive perfectionism, lack of understanding of the problem, or working on too many things
10. Launching too fast such as launching a site that is not yet ready
11. Raising too little money
12. Burning through the money without tangible results
13. Having too much money and not knowing what to do with it
14. Failure to manage investors
15. Fighting with other founders or business partners
16. Not wanting to do the dirty work
17. Hiring the wrong people
18. Not marketing the business well
19. Failure to take care of customers or clients
20. Losing control of distribution
21. Putting a half-hearted effort