Growing a Service Business

Comments (1) Posted By Joe on June 7, 2012 in Business Basics

Rutgers Students Aliza Auslander, Allison Ryan and Kaye Toal compiled the information in this section. Matt Matsuda edited and condensed it.

Target Market

The target market for many small businesses, particularly those that are service oriented, will be college students and New Jersey residents in professional careers.

Generalizations about these potential customers include their willingness to pay for services that will enhance their own work productivity (they perceive themselves as “busy” all the time) and relieve them of everyday tasks (they don’t have time or never learned cooking, cleaning, and the like).

  1. This is a busy population. Every extra household chore cuts into this population’s work time, relaxation time, and family time. This population seeks goods and services to make their lives simpler.

  2. Many young professionals do not cook, organize their own space, or have washing machines, and share living situations with roommates. Further, for professionals, fancy work clothing needs to be dry cleaned. This leads to a situation where the professional must take time and spend money to perform domestic chores. This is regarded by the potential customer a waste of money and time-and it pains them!

  3. As regards older professionals with personal space and convenience appliances in their own homes. the one thing that does not change is available time: the more professional he or she becomes, the busier he or she is. He or she might also have a family and many meals to prepare, activities to organize, spaces to clean, and clothes to launder. Entrepreneurs can focus on alleviating the time burden with high quality and efficient services.

  4. Available service providers are often poorly organized and supported. Laundromats, for example, often only cater to their immediate community and are not taking advantage of other markets, and so do not have the capacity to invest in newer equipment, better facilities, and a standard of cleanliness and professionalism demanded by target market customers.

Reaching the Target Market

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A business owner should, at minimum:

  1. Reach out to sororities and fraternities on college campuses.

  2. Contact hotels that cater to professionals on business trips. Assess if it is possible to make an arrangement with the hotels in which the business owner can offer a regular service.

  3. liPrinting and dropping brochures in local restaurants and hair salons and hair parlors might work for some service providers.

  4. The greatest challenges for small business are often not about getting set up, but figuring out how to constantly grow and improve. Two areas that affect many already successful businesses are regular, customer-friendly website improvements, and the growth of operations through possible franchising of the core business. These are examined in greater detail here.

Website and Services

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Below are some suggestions for businesses that already have websites, but need to be current with changing services and consumer expectations.

  1. The first and simplest improvement is for companies to make sure that phone and contact information are displayed in a simple, easy to read format. For example, the listing 1-866-5-ABC-BUYS 567-8910 is not as clear as 1-866-5-ABC BUYS (567-8910). Simple additions like parentheses can make a difference.

  2. Many websites can be improved by adding a tally corresponding to the services offered. For example, “total orders filled this month,” “loads of laundry done” or “number of visitors” can be added to the site. Where there is very little dated information on a website, it is difficult to deduce if the business and website are still active, which drives away customers. Another option for tackling this issue is to simply tell viewers when the website was last updated, perhaps in a note at the bottom of the webpage, or by linking the website to a Twitter account, very popular these days.

  3. If the website has a blog, it should be updated regularly and have some sort of a focus. For example, if only one post exists, dated from one year ago, customers will perceive this as unprofessional. One idea is to have the blog focus on a theme like “funny stories” related to the service. If the business is particularly ambitious, it could solicit customer input or stories, as community building is an effective way to create loyalty among customers who share their experiences. Another possibility is to focus specifically on the business and have a video about “a day in the life” of the business. This personal touch and “get to know the owner” approach is a strong branding strategy for small businesses.

  4. Businesses should offer “packages” so that customers can make decisions upfront about pricing, especially for services. For example, a laundry business might indicate: “30 pounds of laundry equals two pairs of jeans, 5 t-shirts…etc.” This is better than only saying “charges will be by the pound,” since most customers, especially if new, don’t think of their needs in terms of charges by weight.

  5. Businesses should always think of additional services that customers find particularly valuable and for which they’d be willing to pay. For the laundry example, an ironing service would be such an offer. Work clothes often need to be ironed. It is a tedious task and is surely a revenue generating opportunity for a business, especially from young professions and older professionals alike.

Expansion: The Case of Bergen County

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For a successful small business, franchising may be a logical next step.

Bergen County, in Northern NJ, is a great place to start. This wealthy county has a high concentration of customers of interest to many small businesses. These customers are a target market: working professionals living in Bergen County and commuting into New York City on a daily basis. They are busy and would benefit from services that seek to alleviate the burdens of everyday tasks, and have disposable income to support the service.

Bergen County is also the home of Fairleigh Dickinson University, as well as many hotels that cater to professionals on business trips. Small businesses can serve sororities and fraternities at the University and it might be able to work with some of the hotels in the area.

Within Bergen County there is also a blue collar area with a large number of small businesses. Of these, some are suffering due to intense competition. Others are suffering as a result, perhaps, of poor management and inability to develop a regular and loyal customer base. If the entrepreneur can work with a distressed local business in the same service, it may be able to retrain the employees, offer business development planning, and take on the existing business as a franchise.

General Information and Market Research Guide

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Demographic information

Target market: “NJ students and professionals”: Useful data for entrepreneurs includes demographic descriptions of New Jersey in general and, as a target case when possible, Bergen county in particular. The market research guide includes information and instructions for collecting similar data for other counties and states.
*Information provided by the United States Census Bureau website

Total Size of Target Market (Bergen County): 430,081

  • Income Level: $40,000 and up. The average starting salary for a young working professional is $40,000. This target market includes all working professionals with disposable income, so the starting point is the average starting salary.

  • Gender: Male and female.

  • Age: 20-54

  • Total Target Market With Children (Under 6 Years): 44,915

  • Education (Educational education of the population between 25-64 years of age): 243,695 of the target market have achieved Bachelors degree or higher. Another 117,986 of the target market have had some college education. Combined, 361,681 persons in the target market have some college education. Although this number includes some people who fall outside the target market, we believe that the number is large enough that we can deduce that the vast majority of the target market is educated.

  • Job and Position: Since the target market encompasses all working professionals from ages 20-54, jobs and positions vary. The market likely includes everyone from secretaries and executive assistants, to salespeople, to CEOs.

Resources for Market Research (Inexpensive things a Business Owner Can do to Find Customers)

Use the following websites to assess the target market:

  1. The U.S. Census website provides a wealth of population statistics.

  2. If your business involves pets, check out the online home of the American Veterinary Medicine Association. It offers market research tools and, like the census, provides statistics. It also provides helpful formulas for estimating market size.

  3. CitySearch Middlesex
    Provides information about local businesses.

  4. The New Jersey Association of County Tax Boards provides property value and tax information.

Publications the Target Market Reads

  • 201 Magazine

  • The Jewish Standard

  • The New York Times

  • Bergen Health & Life

  • Contemporary Bride-Bergen County

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1 Comment »

  1. transport@wellknown.kawecki” rel=”nofollow”>.…

    tnx for info!!…

    Trackback by luke — July 31, 2014 @ 9:09 am

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