The error most would-be entrepreneurs make is going into business based on what they think people should buy, rather than what people really want or actually do buy.
How can you avoid this trap in your own start up?
Here are four simple and inexpensive things you can do before you get into business to make sure there is a viable, sustainable and growing market for your business.
Identify your market.
How big in terms of dollars, is the current market for your product or service? Is it a new or mature market? Are you in a new or mature category? A lot of these questions can be answered with a few hours of online research or offline research in your library. Or go to an industry association and get your hands and mind around the numbers of your market and your category.
Another good tactic is to go to a trade show or exhibition and look at your prospects as well as your competition. What does your potential customer really want? Who are they? What is your competition selling and at what price point? Can you deliver the same at a lower price, or can you add value and charge a premium? Is the sales cycle long or short? Is the exhibitors' list growing or declining from year to year?
Answers to these types of questions will give you a big advantage in getting a handle on the opportunities within a marketplace, and if your initial assumptions about your product or service really hold true.
Identify your customer.
One of my CEOs used to work in advertising, and she and her teams would develop lists to help profile the "perfect customer" for the product or service they were trying to sell. Her original list consisted of 53 questions and included questions such as “Is the target male or female?” “How old are they?” “Are they married?” as well as deeper questions such as “What was their main motivation purchasing a particular product or service?”
Why is this so important?
Because this knowledge will give you additional insight into how your own sales process should be structured. It will also help you operationally tailor your product or service offering to better fit your audience.
For example, if you are looking at a dry cleaning business, you may discover there is a want or need for a higher end delivery service to professionals in your area. Given that, you might be able to reorient your distribution and delivery systems to meet an unmet demand.
Test and measure demand.
Big companies spend lots of resources testing ad campaigns and hiring focus groups, but you can do a lot more effective research on your own by simply starting small then testing and measuring everything you do.
We've talked about consignment arrangements, farmers markets and local markets before, but don't forget trade shows, expos and industry meet and greets as opportunities to meet industry players, network, make contacts and get feedback on your product or service. All of these are relatively inexpensive ways (in many cases less than $1,000 for some type of sponsorship) to test the waters.
And if you think that is expensive for little or no return, just imagine spending 10 to 100 times that amount without generating any sales or revenue, simply because you are selling something no one or very few people wants to buy.
Start your list of contacts.
At this point in your start up and planning phase, you may have a list of vendors, suppliers or even potential customers. If so, great. Keep building that list and start to develop a communication strategy to keep in contact with that list on a consistent basis. Today's contacts may be tomorrow's customers. More importantly, they have access to entire networks of people who may want or need your product or service.
The real goal of networking is not making a sale to your direct contact. It's about creating a relationship with that contact that leads to referrals and word-of mouth leads down the road. Whatever you do and however you keep track of your list make sure you protect it and treat it like gold. For most businesses, your contacts database often becomes the most valuable asset you own.
In the end, there is no fail-safe formula for business success, although people are always trying to find one. The best indicator is a proven market with room for growth, populated by people willing and able to pay for something unique or different that helps them make their lives better, easier or happier in some way. It's the business that does the usual in an unusual, unique or different way that wins customers and keeps them coming back for more.
Running a home based business is the ideal situation for many people: There's no boss breathing down your neck, no boring meetings to attend and no 45-minute drives in rush hour traffic. Working from home can be a rewarding experience, but it's easy to forget the basic rules of running a successful business when it's 10 hours of just you, your computer and the distractions of home.
Here are some helpful tips for keeping your home based business running smoothly:
Structure your day.
The problem a lot of home based business owners have is that they no longer have a boss standing over them making sure they get their work done, or a tangible start and end of each workday. It's easy to let time slip by as you head to the refrigerator, catch a few minutes of TV, or dive into a project first thing in the morning, neglecting the other tasks you need to perform to keep your business running smoothly.
Create a structure that mimics what you had in the workplace. Structure your day so you have a start and finish time, with certain hours set aside for specific activities. A general rule is to spend the first hour of the day prospecting for new clients. Send your emails, write your letters and make your phone calls first thing so you don't forget to do it later.
Use Outlook or some sort of contact management software to serve as a visual reminder of what you need to accomplish that day. Live and die by your to-do-list. Try to have everything crossed off by the end of the day. Even my own children know that if they want me to do something for them during working hours, they have to put it on my to-do-list or it will never get done.
Carry an organizer wherever you go. If you're still using a day planner or similar dinosaur, consider upgrading to a Blackberry or other high-tech gadget. You don't need to go crazy and spend a lot of money, but invest wisely in something that will hold everything you need and allow you to instantly access it on the go. Another good idea is to not keep all of your information in one location, such as the hard drive of your home computer. Keep your data hosted on a virtual exchange server so you can access it anywhere that has an Internet connection. A big misconception about home based business owners is that they stay at home all day, everyday. And as you know, that's just not always true.
Organize your family time.
Once your professional life is organized, you may need to consider organizing your personal life. Maybe you noticed right away, or maybe it's just becoming apparent, that you tend to work around the schedule of your family members. This is especially true if you have children. A lot of people, especially young moms, decide that they're going to quit their jobs in corporate America and work from home in order to care for their children and save on daycare expenses. But in reality, if you're serious about running a home based business and earning a decent income, you're going to have to make arrangements for childcare in or outside the home. Otherwise it becomes too distracting. Consider hiring a babysitter so you're guaranteed five to six solid hours to get your work done.
Sit down and set some goals for yourself. You no longer have quarterly reviews or progress reports, so it's important to keep track of whether or not you're making progress in your business. It's one thing to set small goals like completing your to-do-list--you also have to set goals to motivate yourself to succeed. Hopefully by now you're making as much, if not more, money at your home based business than you were at your former job. If you aren't, begin by setting a goal to bring in the same amount of income you were, and slowly raise the bar to increase your income by a couple of thousand a month. Once you've met a goal, make time to reward yourself by doing something fun, which brings us to the next tip.
Take time out for good behavior.
It's not uncommon to find yourself working 60- to 70-hour weeks. But the good thing is, if you want to sneak out and see a movie at two in the afternoon, nobody's going to tell you not to do it. You have that freedom and flexibility as a home business owner. It can be tempting to work all the time when you start seeing how successful your business has become, but know when to relax. You've already established a smooth-running business. Take a break every now and then so you don't get burned out.
Be a Jack-of-all-trades.
There are a lot of roles you play as a home based business owner: You're the CEO, president, secretary, office manager and tech support. Learn the basic skills of running an office, including how to troubleshoot some rudimentary technical problems. You don't need to become an expert, but make sure you have a basic understanding of tech support issues, bookkeeping, etc. Otherwise it will become too expensive to have to pay someone to do everything for you.
Network with other home based business owners in either a formal or informal setting. This is a good way to find service providers, leads and potential clients. Surrounding yourself with people who also work from home will give you the support you need, and refer you to people who can help you grow your business.
If appropriate consider moving out of your home.
For a lot of people, working from home is a launching pad. In the beginning, many business owners work from home in order to keep overhead low. If you have more than one person with different roles working from your home office, you should ideally be working in separate rooms. It can be difficult having two people work side by side, even if those two people are spouses and love each other very much. It's distracting for anyone to have someone three feet away from you talking on the phone. Be prepared for expansion. At the point when your business becomes so successful that you cannot efficiently work close together, start considering moving your office outside the home
First, an entrepreneurial mindset will not guarantee success but a wrong and unhealthy or unrealistic mindset will most assuredly guarantee failure. So the right mind set is the first corner stone that must be laid upon which a successful business can be constructed.
So the question now is, how in the world are you going to learn the entrepreneurial mindset?
Here are a few steps to follow:
Always keep the end results in mind.
In order to achieve any meaningful level of success, you must have a plan, an objective of what you are working towards – you do not need to know how you are going to get there, just what it is you want to achieve!
Influence the subconscious mind by writing down your vision.
Bring it to life by meditating on it daily, look at it, act as if it is in the present, instead of as if it’s to come. Think it, write it, believe it, go for it & get it!
Surround yourself with like-minded individuals.
People who share your vision, who have successfully done what you are trying to achieve, people that will inspire & empower you to go after your dreams. Listen to them; see how they think, how they operate, how they conduct business, what strategies they use, how they visualize situations.
Have a positive attitude.
Without this you will miss out on key opportunities. A positive attitude will set you apart and position you for success in all areas of your life. Perspective is everything, there is always something positive in every given situation, it just depends on what angle you’re viewing it from!
It takes time; be patient, persistent, be consistent through the process.
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