Being aware of your industry dynamics will help create a successful business. What makes a great retail business will be different to a great tradie business. How you run a consultancy business, a software company, retail or construction business will all vary because they are quite different, so knowing your market is important.
To help you get started here are some helpful hints, starting with identifying if your market has a specific aspect that helps you be more competitive, or be more successful? If yes, can you take steps to protect this aspect from other businesses?
For example these different industries often have something that can be protected;
- A great location for a retail business can be protected by a lease
- Amazing staff in software companies can be protected by restraint of trade clauses in their employment agreements
- Fellow tradies supplying referral work can be protected by your personal credibility and reputation for great work
- An agency to import certain products can be protected with an exclusive supply contract
- The rights to run a tourism experience in a wildlife area can be protected by a license to operate
- Government contracts can be protected by alliances or joint ventures with other building contractors
Determine what you have in your industry by understanding these market traits, and then see if you can protect them.
Stay on top of the important stuff
Your industry will likely have a governing body, and there will be certain regulations you might have to meet or rules to follow, to ensure you’re running your business legally.
For example, if you’re planning to open a fast food restaurant, you’ll have to know about the Food Standards Code and address the relevant health and safety regulations for your industry. Take a look at the business.gov.au website for more information on workplace health and safety.
You should be able to find a link to your industry governing body through the business.gov.au site.
Know what prices your market charges
It’s helpful if you know the standard methods of pricing. Each industry will have a common pricing method that will help you decide what is best for your business. For example;
- Retailers and wholesalers add on a ‘mark-up’ to the products they buy, which they then re-sell. Each retail segment may also have an accepted percentage mark-up
- Professionals such as lawyers, accountants, architects, agencies; anyone selling their time tend to have a market hourly rate
- Tradies charge hourly rates and then may charge a percentage on any materials they order for their customers
- Software products are increasingly offered as Saas (software as a service) where customers pay monthly subscriptions rather than a one off purchase
- Agricultural markets can often have the price dictated to them from a supply and demand auction
Find out the pricing norm for you industry by talking to similar businesses (in another region if there is a conflict of interest), or from your business association contacts. Use this information to double check your own prices, so you’re exactly where you want to be positioned (cheaper, the same or more expensive than everyone else).
Understand your brand and how it fits
Certain industries find certain ways of advertising and promoting more effective than others. How to market your business will be a key decision you’ll have to make, based on how well you know your customers. For example;
- Online businesses will tend to rely on a digital presence such as a website and social media activity, mixed with awareness through distributors and third parties
- The building trade uses a combination of positive word of mouth for referrals, industry contacts, and vehicle signage
- Retailers use their location, clear signage, a unique store experience, impulse buying advertisements and customer database loyalty programs
- Tourism operators may use signage, advance booking on their website, and agreements with other tourism operators for package deals
Find out what tends to work for your industry and how you can position your business to get noticed and engage your customers.
Discover your markets network
Get to know all the complementary businesses that can support your business and refer work, for example if you’re a tradie, then professionals such as architects and landscapers are a good start. Attend trade shows and industry events while joining your local association and business network to build awareness of your business.
Know your customers
Make it as easy as possible for customers to do business with you. One way of doing this is by identifying how your customers like to pay and then giving them the options they prefer, for example;
- Cash (some customers still prefer to use the money in their pockets)
- Credit cards (customers may want to collect card points or incentives)
- Online payments on the go or in-store (for customers who don’t want to be sent an invoice and want to pay on the spot)
- Online banking (for customers that prefer to shop and pay online or those that don’t want to write a cheque )
- Tap and go options and keeping up to date with the latest technology
The more payment options you can provide, the more convenient your business will be for your customers. A fast and easy payment process is also another competitive advantage.
NAB’s Business Package is designed for your business and its needs. It provides the essential mix for your everyday banking, making it easier to send and receive payments and to manage cash flow. Plus, you’ll be able to access today’s sales with same day settlement from a NAB merchant facility to a NAB business account.
Always remain up to date with your market
The more detailed knowledge you have of your market, the easier you’ll find being in business. You will of course collect this knowledge as each year passes, but get a head start by researching the unique aspects that make up your industry. From the seasonality of sales, to when customers set their budgets, to the impact school holidays may have on sales, to which suppliers are reliable, to who your main competitors are.
All of this market information will help you be more successful.
- If you have a mobile business, consider getting NAB mPOS or NAB Now.
- Find out more about NAB eCommerce and online selling as you start up and grow your business.
- Check out NAB’s Business Package and see how you can personalise a package for your business needs.
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