How to identify your business target audience in 5 easy steps

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Attracting customers is critical to success, especially in the early stages of starting a business. Sadly, even for owners with a solid business plan, truly understanding whom they serve often takes a back seat to developing their product or service.

Ironically, the two go hand in hand: having something truly exceptional to sell and knowing exactly to whom it should be sold.

Clearly identifying your target audience—sometimes called customer persona modeling or customer journey mapping—enables you to assess demand and modify to better meet customer needs. You can then design a marketing campaign that “speaks to” the right people, using the tone and language most likely to appeal to them. In this article, we’ll discuss why it’s so important to identify your target audience and how to do it in five simple steps.


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What is a target audience?

A target audience is a specific group of consumers that is most likely to be receptive to your marketing campaigns. A business might have different target audiences for different products or services. Each target audience has specific needs, and business owners usually devise a specific marketing plan to attract them.

Why you need to identify a target audience

If you are a business owner looking to build an effective marketing plan, identifying and understanding your target audience is the first step. But why is it important to know your target audience?

In general, targeting the right audience ensures your marketing efforts perform better and lead to higher sales or conversions. Let’s take a look at a few additional benefits.

Target market versus target audience

You’re probably familiar with the term “target market.” A target market and target audience are similar but not interchangeable. A target market refers to a group of people with common characteristics and behaviors that business owners target in their marketing strategy.

A target audience, on the other hand, is a subset of the larger target market and consists of a specific group of consumers within the larger group. The first step in finding the right audience to market your business is to identify your target market. This lays the groundwork for where to focus your efforts.

Finding the right target market can be challenging for a new business. Here are some quick tips to help you find your target market:

  • Review your competitors to see who they’re targeting
  • Look for common behaviors among your customers
  • Use audience data to see demographic information about your customers

More information about your target market will be revealed as you pinpoint your target audiences.

Segmenting your target market

After pinpointing your target market, it’s time to refine your strategy. This is where target market segmentation comes into play. The purpose of market segmentation is to deliver more specific marketing content to specific groups within your target market. The four common types of segmentation are:

  • Demographic: This means segmenting your audience based on demographic information, including age, gender, income level, relationship status, and more. Take a look at your customer data and see if you notice any patterns. For example, your customers might be mostly women with disposable income.
  • Psychographic: This segments your audience based on psychological factors like lifestyle, social status, activities, opinions, and interests. For example, if you know your customers tend to be big sports fans, you can target your advertising around game day.
  • Geographic: This segment focuses on targeting people based on where they live. Common geographic segments are local, state, region, and country. For example, if the majority of your customers live in California, marketing winter-gear to this audience might not be the right call.
  • Behavioral: This type of segmentation creates audiences based on a user’s interactions with your brand. For example, if you run an e-commerce business, you can create a segment of users who haven’t made a purchase in 60 days and target them with an email campaign to try to win them back.

Segmenting your target market allows for effective marketing with efficient spending and improved customer retention. With segmentation, you are exclusively sending relevant information to audiences that are specifically interested in it. If you send all of your content to the entirety of your contact list, your subscribers will tire of receiving material that isn’t useful to them.

Efficient budget use

Not defining your target audience can cost you money, literally.

This is because digital marketing in the form of ads requires some amount of capital. And this money is wasted if the marketing content reaches an audience that isn’t interested in what you’re selling. Targeted marketing helps you make better returns on your investment by being smarter about your advertising. It’s important to identify your target audience to refine your marketing strategy in a way that saves you money and helps generate new leads.

Build stronger customer relationships

With targeted marketing, you can reach the right target audience that’s responsive to your marketing strategies. Researching your target audience allows you to offer solutions to their problems. This increases the chances of them engaging with your business.

Reaching out to your customers with personalized content makes you stand out from your competitors. For example, if a customer buys a certain product from your online store, you can create an email campaign to target that customer when similar products are added or go on sale. This type of personalization helps your target audience relate to your business on a personal level, helping your brand establish stronger customer relationships.

How to identify target audiences

Now that you understand the benefits of defining your target audience and how to segment your target market, it’s time to get to work. Here are five steps to help you identify your target customers.

1. Create an ideal customer profile

The people who are most likely to buy your products or services share certain characteristics. The first step toward identifying these prospects is putting together an ideal customer profile, sometimes called a buyer persona. This is essentially a detailed description of your target demographic that includes the following characteristics.


Do your potential customers mostly fit in a millennial age bracket, or are they more often middle-aged? This is important to understand because customers in different age groups will respond differently to how your product is designed and marketed.


Depending on the types of products you sell, gender can play a role in how your audience reacts to your messaging. Generally speaking, the needs and goals of specific genders are often strikingly different. If you promote your business in a way that fails to address these differences, you could end up reducing the effectiveness of your campaigns.

Income level

Knowing how much disposable income your customers possess should directly influence your marketing strategies. Low-income families may be drawn to products or services that help save them money. Customers in higher-income brackets, on the other hand, may respond more favorably to marketing that emphasizes luxury and exclusivity.


Broadly speaking, the buying habits of urban residents often differ from those of people living in rural areas. Where people reside and the types of communities they live in influence their purchasing preferences.

Other key characteristics include marital status, occupation or industry, families with (or without) children, ethnic groups, hobbies, and interests. Use your own financial and business data to determine who your ideal customers might be. Then use market research to see how your actual customers measure up.

2. Conduct market research

You can learn about your target audience through primary and secondary market research. Primary research involves learning about customers’ buying habits through direct contact, such as:


Distribute surveys to potential customers via paper, email, or web-based services. Surveys help you gather useful data directly from your customers. You can ask them questions outright about what previous services and strategies they liked, then take that feedback into account for your next marketing campaign.


Talk to people you trust and whose purchasing habits dovetail with your small business. This approach is a bit more traditional and direct than a survey and provides you with candid responses for your marketing campaigns.

Focus groups

Get feedback from small groups who fit your customer profile through Q&A sessions and discussions.

Of course, you should never overlook current customers as a source of insight. When applied to clients, the same three methods not only help you better understand your target audience but can also guide you into better service skills.

Do you ever ask customers to fill out forms or leave reviews when they purchase your product or service? If so, they may be open to answering questions about their age, where they live, and their purchasing preferences. Invite them to share information voluntarily.

3. Reassess your offerings

With a comprehensive customer profile in place, the next step is to look at your products or services in a fresh light. Given what you know about the target audience, ask yourself:

  • Which features and benefits are most likely to attract new business?
  • Which may be of less interest or even discourage new customers?
  • Which should I place front and center in my marketing and paid advertising?
  • Which current customers, images, and copywriting should shape my messaging?

This analysis can lead to valuable modifications to your offering and yield new leads.

You’ll also want to reassess your target audience periodically. Every six months or once a year, do some additional primary research and refine your customer profile accordingly. As the marketplace shifts and evolves, your ideal clientele may change with it. Get ahead of the curve, and you’ll also be one step ahead of your competition.

4. Research your competitors

As a marketer, one effective way to learn about what areas to focus on and which strategies to employ is by observing your competitors. This way, you can find out what strategies are already effective in your niche and how you can incorporate those into your marketing plan. Here are a few things to consider:

Which social networks are they using?

Social media marketing has been a game-changer for e-commerce brands and business-to-business companies. Researching your competitor’s social media will allow you to look for the content that receives the most engagement. The common channels to review include Facebook, Instagram, Twitter, LinkedIn, TikTok, and Snapchat.

Research how often they post, what they post, the influencers they tend to work with, and so on. Such research will also identify the most suitable social media platforms with an already existing target audience base. You can target the same audience with your content, knowing they are already interested in that niche.

For example, if your target audience regularly interacts with your competitors’ posts on TikTok, it might be time to jump on the bandwagon.

What are their customers’ pain points?

Pain points are the problems your target customers are already facing and looking to solve. Identifying your audience’s pain points lets you present your products as viable solutions in a targeted way. You and your competitors probably try to solve the same pain points for your customers. While researching your competitors, identify where their approach is lacking and try to better address solutions in those areas with your marketing plan.

5. Leverage existing customer data

While devising your marketing plan, make use of the insights you have already gathered from existing customer records. Identifying patterns in this data and properly using them in your plan will help you build a more effective marketing strategy.

Use Google Analytics data

Google Analytics is a great resource to identify patterns among your target audience. Google’s demographic information gives you insight into the age and gender of your audience. This data is broken down into affinity markets and in-market segments and gives valuable audience insights. These analytics allow you to know your audience better and create more relevant content for them, which will be more effective in generating sales for your business.

Review customer relationship management data

A customer relationship management (CRM) system is software that allows companies to manage their interactions with potential customers. Customer data like name, age, contact information, certain behavior (like items viewed and previously purchased), and other engagement data is stored neatly in this software. CRM analytics show you more about your customers and your target audience at a glance.

This software can also give valuable insights you can use to identify patterns for different purchases, helping you segment your audience. Common patterns to look for include:

  • How did they find your site for the first time?
  • How many interactions did it take to complete a purchase?
  • Did they use coupons?
  • Are they typically on mobile or desktop devices?

Which social media platforms do they use?

Social media has proven its mettle when it comes to audience analytics and related tools. Knowing which social media platforms your audience uses can help you decide what analytic tools to invest in.

Facebook allows you access to the demographics of your audience and their interests through Facebook analytics. Similarly, Twitter provides ad accounts with a follower dashboard that tells you more about the interests of your followers. These analytics can help you identify your target audience and also help you create proper strategies for maximum content engagement.

Start building your target audience

Finding the right audience is crucial for the effectiveness of your marketing campaign. Not everyone is interested in what you’re selling or what you have to say, so you need to identify whom to focus your efforts on.

Target audience analysis allows you to make personalized content for your customers that complies with their user persona. This allows you to solve and address their pain points and build long-term relationships with your customer base. Finding your target audience helps you build a more cost-efficient marketing strategy and saves valuable time and resources. It also encourages a great return on investment and helps your business grow sustainably.

Take the time to identify your target audience and the problems they face. Then, build your marketing strategy in a way that addresses their pain points and provides your audience with useful solutions.


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This article originally appeared on The QuickBooks Resource Center and was syndicated by


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Home business tax deductions to take as a small business owner


Small business owners take on a considerable amount of responsibility. Beyond serving clients, they must also take care of all the minutiae of running a business, including keeping track of expenses they can deduct as a small business owner.

Fortunately, small business owners and entrepreneurs who use their home for work can benefit from various home business tax deductions that help them reduce their taxable business income. Common deductions include office supplies, software and internet access, but deductions can vary widely depending on the type of home business you run.

  • Who qualifies for home business tax deductions?
  • 25 home business tax deductions for your small business
  • How to write off home business expenses




If you run your business out of your home, you may be able to deduct expenses for the use of your residence on your taxes for your small business. The home office deduction can be utilized by homeowners and renters, and any type of residence can qualify (single-family home, condominium, manufactured housing, etc.).

To qualify for the home office deduction, your home business activities must meet the following criteria:

  • Regular and exclusive use. According to the IRS, you must “regularly use part of your home exclusively for conducting business.” In other words, you must have a space in your home that you use only for business purposes, such as a home office or extra room that is used only for business and never for personal use.
  • Principal place of business. To qualify for the home office deduction, your home also must be the principal place your business operates from, although there are exceptions. The IRS reported that you may qualify for the home office deduction if you also have a business location outside of your home, provided you use your home for a substantial component of your business. For instance, if you conduct business in another location but have meetings with clients or patients in your home, the IRS allows you to deduct expenses for the part of your home that you use “exclusively and regularly” for business purposes.

There are some exceptions to these rules, including for those who run a home daycare. If your small business involves watching children in your home, then it would be impossible to meet the “exclusive use” criteria if you’re watching children in your own living area. To qualify for this exception to the exclusive use rule, you must provide daycare for children, persons age 65 or older or persons who are unable to care for themselves. Additionally, you must have “applied for, been granted or be exempt from having a license, certification, registration or approval as a daycare center or as a family or group daycare home under state law,” noted the IRS.




If you’re eager to reduce your taxable income this year, figuring out which home business tax deductions you can take is a smart first step. Here are 25 common deductions you may be able to qualify for.




Business supplies and office expenses, such as office furniture, printer paper, pens, calculators and business cards, are deductible provided they are for business use. According to the IRS, business expenses must be both ordinary and necessary, meaning they are “common and accepted in your trade” and “helpful and appropriate,” though not necessarily indispensable.




Small business computers and software you need to purchase for your business, including small business accounting software, should be tax-deductible business expenses provided these purchases are ordinary and necessary for your business to remain in operation.




You may also be able to deduct home repairs and maintenance performed on your place of residence, but only for the part of your residence that is used exclusively for business purposes. According to the IRS, an example could include “painting or repairs only in the area used for business,” like a new coat of paint or replacement flooring in your home office.




You can deduct the business portion of your rent as an expense if the property you rent is for use in your trade or business. However, you cannot deduct rent as a business expense if you have or will receive equity in or a title to said property. Per the IRS, rent is defined as “any amount you pay for the use of property you do not own.”

In terms of depreciation, the IRS said that you can typically deduct depreciation on the business use portion of your home as well, in an amount up to the gross income limitation over a 39-year period.




If you have a home office, your house utilities will also be required for your business. As a result, you can deduct a portion of your utility bills, such as gas and electric bills. However, you can only deduct a portion of these expenses since, obviously, part of your utility bills are for personal use.




If you use your car for business purposes, you can deduct auto-related expenses for the business use of a car. The IRS also reported that, if you use your car for both personal and business use, you must divide your car expenses based on the mileage you drive for personal and business purposes.




You can also deduct mileage for all travel related to business. The IRS offers a table of standard mileage rates and mileage deduction rules you can refer to for the last several years, including mileage expenses for 2020.




You can also write off employees’ pay as a small business owner. This is true even if you operate your business out of a home office.




You can also deduct contributions to retirement plans, including tax-advantaged retirement plans for the self-employed or small business owners, such as an SEP IRA or a solo 401(k).




If your business is paying interest on a credit card or loan that you borrowed for business activities, you should also be able to deduct this interest as a business expense.




According to the IRS, you may be able to deduct various federal, state, local or foreign taxes that are directly related to your trade or business.




You can typically deduct the cost of business-related insurance products you pay for, provided they are applicable to your trade or profession.




If your business creates products or purchases them for resale, you can typically deduct the cost of these products or the costs involved in manufacturing them. This can include the cost of raw materials, freight, shipping, storage, direct labor and more.




Thanks to the Tax Cuts and Jobs Act of 2017, you may be able to deduct up to 20% of your qualified business income on your taxes. This deduction does have limitations based on your trade or business as well as how much you earn, however. Specifically, joint tax filers with incomes below $315,000 and other filers with incomes below $157,000 can claim this deduction in full provided they work in a qualifying industry. For 2018, joint tax filers with incomes between $315,000 and $415,000 and individuals with incomes between $157,000 and $207,500 were subject to phase-outs.


Jelena Danilovic/istockphoto


If you use your home for business purposes, you can generally deduct cleaning services and supplies that you purchase for the business-related portion of your home.




If you own your home and have a home mortgage, you can deduct a portion of your mortgage interest on your business taxes. Deductions are based on the percentage of your home that you use for your business. If your lender requires mortgage insurance, part of that can be deducted as well.




Business-related travel expenses can also be taken as a business expense. This could include travel to meet with clients or to professional education or training events.




If you pay for professional services, such as legal advice or tax preparation, these expenses can be deducted as business expenses.


Jacob Ammentorp Lund/istockphoto


If you pay for marketing help or a business coach, these expenses can be deductible from your business income.




If you ship items for business purposes, shipping costs can be deductible on your taxes. The same is true for postage when used for business purposes.




A security system that protects the doors and windows in your home from intruders can also be partially deductible as a business expense, provided part of your home is used for business purposes.




Professional memberships you pay for and subscriptions to business-related publications can also be tax-deductible.




The IRS said that while the first local telephone landline in your home is not a deductible business expense, “charges for business long-distance phone calls on that line, as well as the cost of a second line into your home used exclusively for business, are deductible business expenses.”




Health insurance for yourself and your family is deductible as a business expense when you’re self-employed, although you do not have to have a home office to qualify for this deduction.




If you pay for or reimburse education expenses for an employee, you can deduct the expenses if they are part of a qualified educational assistance program, per IRS rules.




If you’re feeling overwhelmed by all of the home office business expenses you might have to keep track of, you should know that the IRS also offers a standardized home office deduction that requires less legwork upfront. Here are the two options you have when it comes to how to write off home office business expenses this year:

  • Simplified home office deduction: Since the 2013 tax year, taxpayers have been able to access a simplified option for computing the home office deduction. This option lets you determine a standard deduction based on the square footage of your home office space, thus letting you avoid tracking and reporting all of your individual home office expenses. Of course, the simplified method isn’t perfect since you can’t take some deductions like depreciation. You also cannot carry over a loss from a previous year, which is a departure from the regular method.
  • Regular method: If you keep excellent records and prefer to deduct business expenses the old-fashioned way, you are still able to do so. With this method, you would need to keep detailed records of all your actual expenses for your home office including mortgage interest, utilities, depreciation and more. From there, your deduction will still be determined based on the percentage of your home used for business purposes.

If you’re using the regular method, you should plan on using IRS Form 8829 for certain business-related tax deductions when you file your taxes. But be aware that some business expenses don’t fall under the home office deduction, so they would be deductible within other areas of your taxes, such as Schedule C or F. Examples include telephone expenses, dues and salaries.

Also note that if you use the simplified method and itemize deductions, you can deduct some expenses for your home that are otherwise deductible, including mortgage interest and property taxes, as itemized deductions using Form 1040 or 1040-SR, Schedule A.

When choosing which method to use for your home office deduction, keep in mind that both options have pros and cons. The regular method requires a lot more work, but you have the potential for a larger deduction if you have a lot of qualified expenses within a year. The simplified method is easier, but not necessarily ideal if you want to recapture depreciation when you sell your home, or if you want to be able to carry over losses. Make sure you understand each method and its limitations so you can make an informed decision.

This article originally appeared on and was syndicated by


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