When I conduct trainings on enterprise or business development, there is one question I love to ask. It is the WHY question. I usually request a few participants to tell me, and by extension the class, why they want to go into business (for aspiring entrepreneurs) or why they are in business. The answers are mostly centred around the benefits they intend to get from doing business. These include being able to make enough money afford the life of their dreams, being able to put food on the table, need to get out of the job market, earning social respect, among others.
Summarized, all these boil down to one desire. The desire to make profit. You can see jaws drop when I tell them that none of these reasons, good and lofty as they may be, can sustain them in business even if it appears that they get some head start because NONE of those reasons is a compelling reason for enterprise that will endure. I then go on to tell them that what they were focusing on were the rewards of good business that is fulfilling its purpose. But none is the purpose. Too many people chase the consequence or effect rather than the cause.
Business “purposology”, no matter how crafted must be geared towards only ONE thing; making and sustaining paying customers. The first motive of a genuine entrepreneur is to solve a significant problem or set of problems for people. It is when this problem is significantly solved for a significant number of people in a significant manner that makes them willing to significantly reward you with what you call profit. In other words, the bridge between your enterprise and your loftiest dream of a good life is ONE bridge called PEOPLE; known in the language of the marketplace as customers! You can literally see “aha” faces, like light bulbs coming on after a long interregnum of darkness, as people come to that epiphany or “eureka” moment!
The most vital ingredient for the success of any business is therefore not technical knowhow or skill. It is not finance. Not location. Not competitive advantage. Not in deep-pocket investors. It is paying customers!
How does a budding entrepreneur know what business idea to pursue? Simply find out what customers need and are willing to pay for. Business opportunities are always located inside paying customers’ need. It is however important to have a good idea of how significant the number of potential paying customers is. This is because one or few customers willing to pay for a service or product isn’t necessarily a sign that you have a good business. Very often, budding entrepreneurs get carried away by the encouragement they get when they initially discuss their business idea with a friend or two who assure them that they would be willing to buy. By the time they wake up to the reality of the fact that those friends might not even number among the first one hundred customers they have when the business eventually takes off, the train has left the station!
You need a significant number of paying customers who can patronize your service within a reasonably short period to give your business a good turnover. Thereafter, do a survey to determine where they are located, how much they would be willing to pay for the product or service you have to offer. It’s a daunting task. but a price worth paying at the onset of business to ensure that you don’t become another statistic on the list of businesses that fail within the first two years of take-off. You will need to hit the streets of where your potential customers are and connect with them. Open your mouth and talk. I have had budding entrepreneurs tell me how squeamish they are about talking to people. But if you want to do meaningful business, you must train your vocal chords to connect with people. Ask value questions. Help them to codify the problem that they have and to which you are proposing a solution. Then propose the solution and push the frontiers further by asking how much they would be willing to pay to get that problem solved. Move around with a notebook. Write things down. Record conversations on audio or even video where you can. Listen to or watch the conversation over and over again. Take pre-orders where possible. Offer samples of the product for free. Do trial runs. But don’t just throw products into a market like one dumping garbage into a dustbin. Take feedback. Ask for areas where they would need for you to improve on your proffered solution. Make use of the internet. Google is your friend. Watch online videos on previous modes of presentation of your value proposition.
Find out if your solution is an innovation serving a virgin market or if it is just another alternative to what already obtains in that market. If the latter is the case, think of how will you devise a unique way of presenting it in a way that makes it a preferred option. Attend networking events that allow you to present your idea to people and get their opinion. Use the information you get to build a product or service that the customer cannot resist. That will be your payoff for doing your homework well!
Being buried in a compulsive obsession with customer needs and behavior will however not totally guarantee market success. Through your market segmentation exercise described above, you are able to know your potential customers, their likes, dislikes, financial capacity and possibilities in the market. But that is only a prerequisite.
You need to go further and determine how, based on information at your disposal, you can match your passion, determination, goals and aspirations with the requirements of your market segment. This may involve the identification of new skills, soft and hard, that can effectively position you to have a firm place in the heart of your customers. But much more importantly, you must know what current skills are and how they can best serve the customer. If you are not very good at selling but you know that you have a surefire product, you may need to focus your attention on making the product while you engage others can best handle the marketing aspect. Get another to handle the product presentation and promotion. If your strength is in marketing, you may want to outsource manufacturing to people who are better equipped to do it while you concentrate on direct interface with the customer.
The synergy will drive distribution and market penetration if everyone understands their role and plays it well. This is one aspect of business operations that many startups neglect. They therefore want to be manufacturer, marketer, promoter, accountant and manager at the same time. This may work for a while but you will soon be stretched thin and fagged out!
Once you can achieve the critical marriage between your potential market with your skills, you are ready to roll out your product to a good start… continued.
Remember, the sky is not your limit, God is!