You may have business cards and a storeroom full of products, but you're not really in business until you have customers.
Your first buyers may not be your ideal customers or your biggest accounts, but they do validate that your fledgling company is real. Fortunately, new entrepreneurs have dozens of ways to capture that first sale. In fact, many have customers before they open their companies' doors.
"It's rare that someone starts a business without talking with anyone about it,' says Louise Kahler, regional director of the Connecticut Small Business Development Center at the University of Connecticut in Groton. "It's important to ask people if they would buy what you're selling and what they would pay. Typically, those people become your first customers.'
Here are 15 ways to find your first customers:
1. Referrals. When Tammy Hendrix started a part-time desktop publishing firm called Tammy Hendrix Business Services in Albany, Oregon, she was still working at a law office. "I gained one of my first clients when my boss referred [a client] to me,' Hendrix says.
2. Requests. Stuart Cotton, owner of Cotton Consulting Inc. in Kailua, Hawaii, used to run a business disposing of waste from petroleum storage tanks. Customers of that business asked him to sell and service the machinery used to wash parts in machine shops. "I went into [the second] business because of customer requests,' Cotton says.
3. Knock on doors. Cotton couldn't launch his new venture with customers from his first company alone. "I did a lot of cold calling,' he says, "and [my second] business grew very fast.'
4. Buy an existing business. One of the fastest ways to find customers is to buy them. Purchase an existing business, and you gain a set of loyal customers before you've even started running things.
5. Buy a franchise. A franchise enjoys some of the "instant customer' appeal of an existing business, especially if the franchisor is an established company, says Lee Quarterman, director of the Small Business Development Center at Georgia State University in Atlanta.
6. Choose the right location. A good site attracts customers who are passing by. Choose a location near where your customers are likely to congregate.
7. Target friends and acquaintances. "Many entrepreneurs get their start because a family member or friend says `Gee, you should sell this,' ' says Kahler. "Or they [perform a service] free for relatives and finally realize they're good enough at it to make money.'
8. Network. Networking is one of the best approaches to finding your first customers, says Quarterman. Attend trade shows, conferences or other events where potential customers are likely to be. Use networking to develop relationships, because people do business with people they know.
9. Speak up. Rives Hassell-Corbiell found the first clients for her corporate training and consulting company, The Learning Edge, in Kihei, Hawaii, when she gave free speeches at professional conferences. "Someone in the audience said, `I'd like to have you talk to my company,' and it resulted in a big contract,' she says.
10. Offer seminars. Entrepreneurs who are good at public speaking can present seminars on topics related to their businesses. Seminars attract people who are already interested in your products and services.
11. Target clients from a previous job. Taking your clients with you when you leave your job is expected in some industries and frowned upon in others. (If you've signed a noncompete contract with your employer, it may even be illegal.) Another option: Your former employer can become a valuable client.
12. Start a database. Before you launch a business, survey potential customers to gauge their interest. Keep those names in a computer database so you can contact them when you're ready to open your business.
13. Advertise. Run ads in publications most likely to be read by potential customers. "The more [narrowly] you target, the better,' Quarterman says. "Specialty magazines are more likely to target people interested in your product.'
14. Buy a mailing list. An even more precise way to target potential customers is with a mailing list. If you want to sell to other businesses, companies such as Dun & Bradstreet Information Services can provide lists of companies in different industries.
15. Develop an online presence. If you don't have the time or money to set up your own Web site, post information in newsgroups or on related sites.
Once you've found your first customers, don't stop there. Work to keep them--and to build your customer base even bigger. No matter how long you've been in business, you'll always be looking for new customers.
Getting your first customer is easier if you know what you're looking for. Here are some tips for clarifying your target market:
1. Realize you don't sell to everyone.
2. Describe what you sell. Emphasize what the product or service does to benefit customers, not what it is.
3. Identify why customers need your product or service.
4. Match your product or service with the customers most likely to buy them.
5. Among the most likely customers, look for those who are willing to pay.
6. Analyze where these target customers are, what they read and what events or trade shows they attend. Go there; advertise there.
Jan Norman has been writing about small-business issues since 1988. She can be reached via e-mail at firstname.lastname@example.org
- Connecticut Small Business Development Center, University of Connecticut, Administration Bldg., Rm. 300, 1084 Shennecosset Rd., Groton, CT 06340-6097, Louise@ct.sbdc.uconn.edu
- Cotton Consulting Inc., (808) 494-6000, fax: (808) 262-2479
- Georgia Small Business Development Center, Georgia State University, University Plaza, Atlanta, GA 30303-3083, fax: (404) 651-1035
- The Learning Edge, 140 Uwapo Rd., #1-203, Kihei, HI 96753, email@example.com
- Tammy Hendrix Business Services, 2616 Prairie Pl. S.E., Albany, OR 97321, firstname.lastname@example.org