How do I start earning?
All the things you will do to get these customers whether developing your product, advertising your business, reaching out to them, informing them about your business or sending them your products is what is called Marketing.
It is also a product which is the output of your business which the customer purchases. It can be a physical object that you will make for the customer or a service or an activity you do for the customer.
The moment when you ask the question "what is a great business I can go into?" and started finding out the answers then you have started your marketing activity.
You look around you and see what is it that the people want? What it is that they need? How can I help people? Yes even helping people is a product, a service. It may not be charity but helping others while earning is one of the objectives you should put in as you go start your marketing.
What are my skills? What are my strengths and weaknesses? What are the things I need to learn for the business.
You look at the market on the business you wish to explore. Gather intelligence. Check out who, and what are the existing leaders and players and trends in the line of business you wish to explore.
Compute for the cost. While doing research of course you will have to consider the expenses that you will incur to produce your product. Materials, labor, utilities, rent to name a few. This is different from the price of the product. The price you can look at it as the cost of making the product + profit + tax. We will discuss in awhile how you can work on this.
Now that you have more or less an idea on the business that you will be exploring, it is time to gather your thoughts and organize them. Here you can decide on the strategy you can take to make the most out of this experience.
The 5Ps Of Marketing
At the heart of your business and all activities is the product you are selling. It can be in tangible form or in a form of service. Make sure that your product is well defined. What is it for? The scope, quality and quantity.
The quality of your product will always be the key and will make or break your business. How well made it is? Any quality concerns may hurt you and affect you getting customers in the future.
The other items that may come with your product or value added items must also be considered. These include packaging, free service that comes with the product, warranty package, customer support or probably other freebies that you can put it to give additional value to the purchase your customers will make.
An example would be for bakers, they can include free cupcakes for every purchase of large custom cake or probably free technical support for programming services. Customers love freebies. This can be a great lure for customers and an alternative to providing discounts or monetary incentives.
One might think that the lower price would be better to attract customers. In a sense it is since it does increase the chances of purchasing your product. You have to consider the costs involved not from just making your products but also maintaining your business as a whole.
You may have set up your business at home to save you the cost of rents or leases but you will still incur costs from utility, transportation in getting raw materials and delivery of products and even fees.
Determining the price your product is difficult. It can be a balancing act. You need it priced just well enough for you to make a profit but as well as maintain and grow the number of your customers.
The key factors in setting your price are:
- Cost of production
- Position in the market
- Demand for the product
Here are a few methods of pricing your product.
Once you have arrived on the cost of the product, that is the amount spent on to produce a unit of the product which includes raw materials, labor, utilities, rent if any. You then proceed to add a percentage more for the price of the product. For example a certain cake takes 500 pesos to produce. You may then add 40% then the price is 700 or 50% which makes it Php750.
Charge Per Hour.
Usually used by service providers we divide the cost into hours to complete a service. You can set a baseline of an hour to complete a simple task. Consider then the costs such as labor, transportation, materials, other overhead into that hour and factor your margin.
If there are competitors in your line of business you then set a price near the price of the leader. Having your price near the popular would be good for small businesses to avoid the scenario of price wars.
Earlier quality was mentioned in the product that you are selling. You may put a value on the quality of your product which translates to the price of your product.
What does your customer think what your selling is worth? If your product offers higher quality, better taste or a lot of value added items then you have room to add your price to represent these value. If you have gained a good reputation you may then add a "premium" to your price.
Other Pricing Strategies. Once you have identified your costs you may then proceed to offer your product with minimal profits just to penetrate the market. You may then adjust the price to one you have ample customers.
You can go the other way around where you price the product high if there is high demand for the product and lower it down once you have gotten back the expenses you have made in setting up the business, research on the product, advertisement, etc.
You may also consider selling a product at a loss or just below the cost of producing the product to attract customers and buying other products or services you may offer to make up of the loss and for profit.
To further help you, we created a costing template which will serve as your guide in pricing your products. When the file opens, be sure to click on "enable macros".
We all see these stores on the streets or in the malls where people line up to buy their products. They have an advantage as their location may be where people usually go to. This is why rent or leases at these locations are at a premium. You have a larger chance of being noticed by people.
For an online business you get to minimize or eliminate rental costs in exchange for a physical location. However if you have a service or a physical product that needs to be delivered you have to consider the travel time and cost to your customers.
You will also have to consider the distance to your raw materials, suppliers and staff. These may affect your operations.
An online business has an internet address or URL. Make sure that you get one that will be remembered easily. Common names have owners already or may cost more so do check.
People not only covers your customer but this includes you and the people you might hire to produce and market your products.
You would need to determine the type of people who would purchase your product. The age bracket, status, sex and economic status. You would need these to set strategies.
You would also need to have your vision for your business to translate clearly to your staff. You should all be on the same page. Even in daily tasks to ensure that your business runs smoothly you must be clear on your directions.
Consider how many people you need. What are their skills to help you. You need people who can help you. People who may not have the skills yet but has the character whom you want to work with and be able to train.
You may target specific groups of people such as influencers on social media. Provide them with your products so they may post them online. You will have the chance you have your product be seen by their followers.
Get you product out there. Start selling them to people who have access to. Your relatives, friends and their circle of friends. If your product has unique offerings or excellent quality you can use word of mouth or recommendation to get the word out.
A word of caution with feedback from people close to you. Listen to their feedback carefully and filter the negative comments and the constructive criticism. We welcome positive remarks, which should identify out strengths but if there are things to improve on we need to find that out through honest feedback. Negative comments can be in a form of people of comments on you business failing and it will not sell. This is what the quotes about believing in your self not listening to people meant.
If you believe on what you are doing, go for it but be smart about it by doing your homework. Iron out your business and improve on your product through, research, experience and feedback.
When promoting your product the first thing that comes into mind would be the advertisements. Depending on the budget and practicality you may consider posting advertisement in different media.
The most costly would be television and even radio ads. Ads on prime time would even be costly. An alternative would be ads on the internet and social media such as Google Ads, Facebook and Instagram.
Advertisement in the internet can be set to specific customers you are targeting. The sites they frequently go to or the pages that they frequently visit or posts that they like. They would charge you by the actions done on the ad you have placed such as the "clicks" made or likes. We'll discuss this more on a different article.
Posters or Print ad is a common way to get the news out about your business. It can be in a form of leaflet or posters distributed in places where there is traffic.
Stickers of your business on cars is another strategy in getting the news out. While you are stuck in traffic people from surrounding vehicles can see your ad.
These are just examples of the different scenario of the 5Ps. These are possible scenarios but not necessarily the only ones. Each person starting the business and doing marketing activities may face a different and unique scenario. It will would be up to you based on your objectives, skills and values on how would you make decisions for each of them.
Product - You have researched the market within your city and neighboring communities and found that there are no good French Pastries in the area.
Price - You have set your price almost identical to those available in the market.
Place - To avoid rental costs you chose to run he business at home. I will buy my ingredients from outside the city. Further than the store two blocks from me however I can get discounts if I do wholesale.
People - My staff are from my community so I will not have any issues contacting them and should there be a big order I can get them here right away. I can do the small orders myself.
Promotion - I will promote first using Facebook ads and provide free samples to my friends and other parents at school. When I get orders I can increase my ads and include Facebook groups. We'll discuss this more on a different article.
Air-Con Maintenance Business
Product - Package of one year maintenance of Air-Condition units. Since the units may need cleaning for every 3 months I will give discounts to all 3 months if they subscribed for the entire year. Provide installation, cleaning and technical support. Provide technical services to refrigerator units as well.
Price - Cleaning per unit of air conditioning may be priced the same as the market but would be cheaper if the 1 year subscription is purchased.
Place - I will set up the business at home since not everyday will I get aircon cleaning. I would save on rent. I will have to travel of course to my customers and suppliers in exchange for the saving I made on rent.
People - I will hire people who have knowledge and has a great attitude to work for me.
Promotion - I will do tie ups with sellers of appliances and air cons. Install the units they sell and they can add the installation cost to the bill which is at a lower price for a chance to introduce our services to their customers. Set ads on the internet through Google Ads and social media sites such as Facebook and Instagram. My service vehicle will have my business written all over it and use it for even for commute for people to see.
Now you know the most common elements in marketing, have you started in digging deeper in each of them? Have you identified your strengths and weakness you need to improve on? I hope that I have provided insight as I can in your business journey! Do your best and good luck!