Write Your Business Plan

Who Is Your Ideal Customer? 4 Questions to Ask Yourself. Uncovering your target audience's wants and needs can set your business apart.

Opinions expressed by Entrepreneur contributors are their own.

This is part 4 / 9 of Write Your Business Plan: Section 4: Marketing Your Business Plan series.

Understanding your customers' needs, preferences, and pain points allows you to tailor your products or services to meet their expectations. But many entrepreneurs overlook or undervalue this essential step.

"When starting a business, getting to know your customers is one of the most important things you need to do," says Noah Parsons, COO of Palo Alto Software. "If you don't understand your customer, you don't know how you can help solve their problems. You don't know what kind of marketing messages and advertising will work. You don't know if your product or service is actually something your customers will spend money on."

Related: 5 Must-Answer Questions to Succeed Targeting Your Customer Base

The basic questions you'll try to answer about your customers include:

Who are they? Describe them in terms of age, occupation, income, lifestyle, educational attainment, etc.

Also include some information on their psychographics, which classify customers according to their activities, interests, and opinions. Although an imperfect science, a psychographic analysis of your marketplace can yield essential marketing insights.

What do they buy now? Describe their buying habits relating to your product or service, including how much they buy, their favored suppliers, the most popular features, and the predominant price points.

Why do they buy? This is the tricky one, attempting as it does to delve into consumers' heads. Answers will depend on the product and its uses. Cookware buyers may buy the products that offer the most effective nonstick surfaces, or those that give the most pans in a package for a given amount of money, or those that come in the most decorative colors.

Related: How to Identify and Research Your Competition

What will make them buy from you? Understanding the reasons behind your customer's purchasing decisions allows you to create targeted marketing campaigns and adapt your product to their needs. The key question to ask yourself here is: What specifically will make them buy from you and not others? What is your main point of difference?

Although some of these questions may seem difficult, you'd be surprised at the available detailed information about markets, sales figures, and consumer buying motivations, especially if you are patient while searching the web. Tapping these information sources to provide the answers to as many questions as you can will make your plan more convincing and your odds of success higher.

Related: 4 Steps to Creating Buzz on a Shoestring Budget

    Eric Butow

    Entrepreneur Leadership Network® VIP

    Owner of Butow Communications Group

    Eric Butow is the owner of Butow Communications Group (BCG) in Jackson, California. Eric has authored or co-authored 48 books, including "Write Your Business Plan: A Step-By-Step Guide to Build Your Business," "Grow Your Business and Ultimate Guide to Influencer Marketing."

    Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

    Business News

    Here's How Much a Typical Google Employee Makes in a Year

    Compensation for the median Google employee was up 5% in 2024 compared to 2023, according to a new U.S. Securities and Exchange Commission filing.

    Business Ideas

    70 Small Business Ideas to Start in 2025

    We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

    Business News

    Jeff Bezos Launches a Tesla-Rival That's 'Affordable' and Customizable. Here's What the EV Truck Looks Like.

    Slate Auto has launched its reservation site, where truck buyers can create a vehicle with a spate of customizations.

    Growing a Business

    7 AI Tools That Help You Build a One-Person Business — and Make Money While You Sleep

    Who needs a team? These seven AI tools let you automate everything, scale like a beast and reclaim your time.

    Leadership

    This Overlooked Leadership Skill Will Help You Build Trust, Influence Teams and Thrive Under Pressure. Here's How to Develop It.

    Executive presence is a critical but underrated leadership skill in 2025. Here are the steps you can take to develop it.

    Leadership

    What Makes You a Unicorn in Your Industry? Start by Mastering These 4 Pillars

    We all want to achieve elusive unicorn status. But how do you attain such a lofty goal among stiff competition, all vying for the same thing?