Excited about your business idea?
I’ve come across many passionate, gifted, and motivated people who often ask, “should I start a business?” And as always, I’d answer with “do you have any customers for your idea?” This question often stops people in their tracks and gets them thinking more deeply.
See, I had always thought, and maybe many of you have too, that if you have a good idea or want to ‘be your own boss’ then you should start a business. Well … these two desires may be enough for you to start, but not enough to grow the business…so failure would be more likely... at some point!
The failure rate of small businesses? High.
The failure rate of small businesses is not encouraging: “Statistics show that one out of five new businesses do not survive their first year, and only two-thirds make it through their second. This number decreases to only 30 percent by the 10th year” (theregister.co.nz).
That’s not good news, but that’s reality.
I know, the dream of running your own business, the “freedom” and “satisfaction” that comes with being the “Boss” is definitely alluring and attractive. We can all fall into that euphoric state. Until the bills hit us and we start to lose sleep. Until we’re stressed out from the pressure of the deep dark hungry pit of debt that we got stuck in. It’s definitely painful when this happens.
Your customers pay your bills!
That’s why you need clients/customers/readers for your idea, or the business simply won’t grow. You can try your best to create the most unique product on earth, that only you could think up of. But until you can see that people will really buy from you, you’re not there yet! Do yourself a favour and ask yourself “are there customers for this product, who are they?” Cos your customers pay you and your bills.
What’s your point of difference?
What’s your niche or point of difference? Or if you’re introducing a brand new never-been-created product, why would customers want to buy it? Do they need it? I know you love it, but will others? Emotions alone won’t make money! This is a trap many of us can fall into!
Do your research well. Maybe it’s an existing product in the marketplace, so what’s great about yours and what does your product offer that the competition’s doesn’t? Then try it out, create your product in a small quantity to test market it (so you won’t bankrupt yourself on your first attempt) and go sell it. See who buys it.
- your local weekend markets
- friends and family members, workmates – offer great opportunities to test market your product
- also your community online trade and exchange, and online selling platforms are great, cost effective places to start selling in too.
Handy hint #1 One of the easiest business ideas, is to start in an industry where there’s already strong buyer demand but there’s a need for more competition – that could be your chance to start up!
Our (my husband and I) very first business idea hatched way back in 1997, when dial up internet and faxes were in and mobile phones were non existent (so long ago!) The idea was to sell New Zealand wine into China. Did we know of anyone in China, let alone have any customers? Not a soul!
All we had was a “good idea”. It was that deadly mix of language and cultural barriers, lack of trading knowledge, and a general lack of business skills that fortunately only lost $8,000 of our precious savings. We had just been newly married too, so it wasn’t a great start to our new life together! However it was a lesson well learnt.
Our next foray into self employment was, thankfully, buying an existing franchised Courier Run. So we got something right this time – it had paying, existing customers, for which we paid for – $18,000 came with a van and regular customer pick ups.
To cut a long story short, we broke even when we re-sold the run, because of the rather strenuous work and long hours. By the way if you’re young, fit and energetic, and like driving and parcels, then a courier run might be a good idea. Otherwise, take your time to research and invest in what you can afford to lose. Note: afford to lose.
The customer is #1.
So… the all important ‘customers’. You need them. First and foremost. Don’t get into business only because you think you have a great product or idea.
Handy hint #2 you could already be employed in an industry where you see that your unique combo of personality and skills could make a difference to existing customers – don’t steal your company’s customers, never do that – but transfer your knowledge & skills into finding new ones when you start out on your own.
Are there existing customers or will there be customers for your product or service idea?