Hello followers. Welcome to another day of our CEREALS BUSINESS TRAINING.
The difference between a good business location and a bad one is like the difference between walking and flying from Cairo to Johannesburg. Both means will get you there, but for one you will use more energy, resources and time.
Choosing a business location is an issue most entrepreneurs approach with a pinch of salt. Many business startups, in order to reduce expenditure usually settle for a cheap location. Others believe that location doesn’t matter provided the product is right.
However, getting a good location is very critical to the success of your business but this can prove quite difficult because one of the challenges of starting a business successfully is getting a good business site.
While in some businesses location might not be key, in many others it is the determinant between failure and success.
Location here refers to the place the business meets its clients. While some businesses do very well on the Internet, there is still need for such a business to have a physical location both for accountability and to inspire trust.
Your business location is important for a number of reasons. First and foremost, it will determine who your target market is. If you are selling products or services that are geared towards a local audience, then you will need to choose a location that’s convenient for them.
Secondly, your location will also affect the costs associated with running your business. Things like rent, utilities, and labour will all be determined by where you are located.
Make sure that the people living in, working or passing through that area are your target group.
In other words, they should be willing and able to buy your products. Further, the people should be numerous enough to generate enough sales to sustain the business.
The right location can mean the difference between a successful venture and one that struggles to get off the ground.
Choosing an excellent location for your cereals business will help you maximize profits. It will be best to locate your cereals store at a location where your target customers can access easily.
If your target customers are households, locate your business in estates. Your business premises can be in the form of small stalls, shop within a building, open air, or an online store.
Setting up online stores is the new normal in business. As such, you can decide to sell your cereals in an online store. Online stores are cheaper to run since you will not need to pay rent, business licenses and permits, and electricity bills. You only need to finance marketing expenses to reach your target customers.
For most people starting a business, I usually advise that you create an online market first before thinking about a physical shop.
The good thing about an online shop is that you don’t have to stress about things like city council licenses or paying rent.
Create a Facebook page, use maybe Ksh.1,000 or less to promote it to reach the target people and you are in business.
Create a WhatsApp group and add your friends. Also let your friends add their friend who are potential customers.
Instagram is also a popular site.
Ensure that you market your stuff in the best way, provide advantages like free delivery within a given area and be aware of the competition since you are not the only one selling.
Online selling is about what makes your products unique. It could be your delivery fee or the quality of your items.
All in all choose a powerful selling point and that is how you will keep people coming.
However, if you have the money to set up a physical shop, go with a place that has high traffic.
It would be awesome to combine both online and physical selling.
Find a hotspot
A lot comes to mind when you think of a business location. Nowadays, business is even virtual, and with no specific location. However, at some point, people will have to come to your store or shop.
Choosing a strategic business location is one thing you want to do right. You get this right, and you are on to a good start.
Have you ever seen businesses fighting over a spot?
It is a hot spot like a wi-fi. There are those specific places with a strong network. In business terms, there are those corners or streets with most clients. Willing buyers.
I challenge you to walk on any city or town streets, and you will notice that some shop space cost way more than others despite being in the same city or town. The answer is simply the location.
That pricing can be justified considering the crazy human traffic in that street, and thus business space is expensive. You will definitely get clients, and that rent will pay itself in two to five days. And by the time you clear your stock, you will be glad you put your products or services on that part of town.
Your business should be accessible. How accessible is your location?
Human beings are generally lazy and economic. They will not want to walk three kilometres to buy your products when they can get the same 30 metres away.
There are businesses that are prospering for being out of town, a nice getaway from the hassle of the city, but even they make less than their counterparts in town, all factors constant. The rule of the thumb is; be easily accessible.
Consider how accessible the place will be for everyone who will be using it – customers, employees, and suppliers. What sort of deliveries are you likely to receive, and will your suppliers be able to easily and efficiently get your supplies to your business?
Pick up vehicles and lories need to get in and out quickly; trucks need adequate roads and loading and off loading docks if you are going to be receiving a lot of sacks of cereals.
Be sure there’s ample convenient parking for both customers, suppliers and employees.
As with foot traffic, take the time to monitor the location at various times and days. You can also use online tools like Google Maps to get an idea of the traffic in the area.
Get your visibility right.
The biggest fast food chain in the USA MacDonald’s made it to the top by always placing their restaurants at crossroads where the joints can be seen from multiple streets.
This trend has been copied by the South African chain joints in Kenya today. It is important that your clients see you when they need your products. Position yourself where everyone can see you, hiding won’t pay the bills.
Consider the Type of Business
Different businesses have different needs when it comes to their location.
For example, if you’re in the retail business, then you’ll need to choose a location that’s convenient for your customers and has high foot traffic. On the other hand, if you are in the milling and packaging business, then you’ll need to choose a location that’s close to your suppliers and has good transportation access.
To figure out what type of location is best for your business, you’ll need to consider the type of business you’re in and what your specific needs are.
If you are running an online business, then your location is not as important. However, if you’re looking to open a brick-and-mortar business, then you’ll need to choose a location that’s convenient for your customers.
Look at Your Budget
When choosing a location for your business, you’ll need to consider your budget. Things like rent, utilities, and labour will all be determined by where you’re located.
To get an idea of how much it will cost to run your business in a particular location, you’ll need to do some research and talk to other businesses in the area.
You can also use online tools like the Cost of Living Calculator to compare the cost of living in different locations.
Consider Your Brand
Your business location will also have a bearing on your brand. For example, if you’re selling products or services that are geared towards a luxury market, then you’ll need to choose a location that’s in an affluent neighborhood.
On the other hand, if you’re selling products or services that are geared towards a more budget-conscious market, then you’ll need to choose a location that’s in a more affordable neighborhood.
To figure out what type of location is best for your brand, you’ll need to consider the type of products or services you’re selling and who your target market is.
Consider the Local Market
When choosing a location for your business, you’ll also need to consider the local market. Things like demographics, income levels, and consumer spending habits will all have a huge impact on your business.
To get an idea of the local market, you can talk to other businesses in the area or use online tools like Google Trends.
Consider the Safety of the Location
Look at things like crime rates, natural disasters, and infrastructure. This is especially important if you will be selling products or services that could be targeted by criminals.
You’ll need to look for a location that has good lighting and is in a well-traveled area. You may also want to consider installing security cameras and alarm systems.
Consider the Proximity to other Businesses and Services
Take a look at what other businesses and services are in the vicinity from two key perspectives.
First, see if you can benefit from nearby businesses by the customer traffic they generate–because those businesses/companies and their employees and customers could become your customers, or because it may be convenient and efficient for you to be their customer.
Second, It can be helpful to locate your business near other businesses and services that complement what you’re selling. For example, if you are opening a cereals shop, you may want to be near a posho mill business or a groceries business.
Look at the Competition
Are competing businesses located nearby? Sometimes that’s good, such as in industries where comparison shopping is popular.
You may also catch the overflow from existing businesses. But if a nearby competitor is only going to make your marketing job tougher, look elsewhere.
If there are already many businesses selling what you want to sell, you may have a difficult time getting customers.
You will need to offer something that the other businesses don’t in order to attract customers. This could be a lower price, a higher quality product, or better customer service.
Consider the Demand for Your Products or Services
Before you choose a location, you need to make sure that there is a demand for your products or services in the area.
If there are few people in need of what you are selling, you may have a hard time making a profit.
You can do some market research to find out if there is a demand for your products or services in the area you are considering. Talk to people in the community and see if they would be interested in what you’re selling.
You can also look at things like the population density and income levels in the area.
If there are many people in the area and they have high incomes, you are more likely to find customers for your business.
However, if there are few people in the area or they have low incomes, you may have a hard time finding customers.
SELECTING YOUR TARGET MARKET.
If I were to ask you this question “Who is your target market?” What would you answer?
Well, if you are like most small business owners, chances are that you will confidently answer “Everyone”. Or maybe you will be a little more specific and answer “I target everyone from students, their parents, construction workers etc.”
Well, the second answer sounds much better, but to a person who understand the hassle of being in business, it isn’t satisfactory.
The truth is that in order for your business to succeed, you need to be ultra-specific about who your customer is, where to find him and what they like to buy. A typical Kenyan market environment can be broken down into a gazillion target markets.
But for purposes of simplicity and ease of understanding, let us discuss 4 categories that you can choose to target.
1. Low Class Market (A.K.A Low Income Market)
Who are they: They are the people who earn less than Ksh.200 a day. They don’t have much spending power and they generally live in slum areas or remote rural areas. Most of the problems are quite basic i.e. food, shelter and clothing.
How to target them: They mostly listen to radio and don’t know much about social media. They can also be reached through door-to-door marketing.
2. Students & Unemployed Youth Market
Who are they: They are young, vibrant and aggressive. They don’t have much financial power as they mainly rely on student’s loans and handouts from parents to survive. You can find them on social media and they are normally described as the generation of tomorrow.
How to target them: You can target them through social media. They also listen to radio and read blogs, so you can target them through that channel as well. Door to door market can also work but only if you can find them in communal settings such as hostels or social gatherings.
3. Gender-Specific Market
Who are they: We have two main genders in the world; the male gender and the female gender. Given that these two groups have different preferences, you can choose to focus on a particular gender particularly if you want to penetrate into an extremely competitive market.
With your cereals business you can decide to target women especially those who are employed, moms or married women e.t.c
4. Middle Class Market (Kenya’s Fastest Growing Market Segment)
Who are they: In Kenya the middle class market comprises of people who spend between Ksh.24,000 and Ksh.200,000 in a month. As you can see, this is a pretty huge market, with immense decision making power and one worth targeting.
How to target them: The middle class are very specific about quality, Grade A (camera clothes). Most of them spend at least 3 hours a day behind a computer meaning that you can
reach them via online promotional methods such as Google, WhatsApp and Facebook advertising.
They mostly listen to radio as they drive to and from work (or in public transport) meaning that you can also reach them via radio advertising. Door-to-door marketing is less effective with the middle class unless you operate on a referral basis i.e. “you tell a friend to tell a friend” system.
PICK A NICHE IN CEREALS BUSINESS
If you wish to run a successful business, you have to pick a niche. In fact, choosing your niche is one of the most important parts of the process.
Let’s take a little look at how you can go about picking a niche for your cereals business.
So, What is a Niche?
Well, the simple definition is that it is a segment of a much larger market. Let’s say that you are in cereals retail. You are not just going to focus on selling everything, right?
Of course not! You will want to sell one to three specific lines of cereals. Let’s say, for instance, maize, beans and rice.
By selecting a niche, you will be able to focus on one specific area of the market and do it incredibly well. If you try selling many different products, it will be tough to focus your advertising unless you are a wholesaler.
Be Different
When you choose your niche, you need to make sure that you stand out. You want to be sure that the market does not have too much competition BUT you also need to make sure that the sales are there.
A business which sells only rice is going to stand out, but are there really going to be enough people out there who are looking to buy products from you? Can you stay in business?
Understand Your Niche
It is also important that you actually understand the niche that you operating in. You are only going to be able to make money if you actually understand what you are selling.
People will be counting on you for advice. People will be counting on you to source the right products for them. If you do not have knowledge of that particular niche, things will end up being incredibly difficult.
Of course, you will also want to choose a niche which fits the area that you are in. Let’s say that you are planning on opening in the middle of a fairly rich neighborhood. Do you really want to be selling quality rice that has been targeted towards people who are trying to be frugal?
The answer to this question is no. So, therefore, you are going to deal with Grade A.
Available Stock Level
Finally, make sure that whatever niche you select, you need to be able to have a decent amount of stock in your store. If you do not have the stock that you need, you will find that people do not visit you.
END OF DAY 3 CEREALS BUSINESS TEACHING SESSION
We now come to the end of today`s teaching session, The PDF of this teaching is available here. Please comment your thoughts and questions below.
