Shikhar Gosh, one of the most respected educators in Harvard’s Entrepreneurial Management Unit, has noted that only about a quarter of startups succeed. The rest either drown in the competition or disappear in the rat race for reasons that even the business owners can’t decipher.
A promising business has something beyond an insane capital and a good business name. At the onset of a business venture, you have to know that there seems to be a common denominator among businesses that last and thrive for the long haul.
Whether it’s a product or a service that you’re offering, you have to know your worth beyond cost and price tag. Examine the direct link between the features and the benefits against that of your competitor’s. The greatest value of a product or a service is to provide something that fills what the market needs. For some, their products create a need that not all consumers have realised in the past. For instance, food trucks responded to the working class’ need to save time and money on their breaks. The owner of the Tunes Hotels chain has responded to the traveller’s basic need for a good, relaxing sleep by investing in high-grade customised mattresses. His hotels don’t have gymnasiums or Jacuzzis, but he was able to fill in a certain need that the market never knew it was looking for. A value proposition is always about why they would pick you regardless of the price tag. The worth of what you offer should never be dictated nor determined by a price war.
A Good Blend of Marketing, Advertising and Visibility
Let’s face it. In the real world, the rabbit beats the turtle. From the moment you launch your business, you have to know how to stay under your market’s radar. Having a diverse channel of visibility will give you a different sense of leverage. Putting your business in the chaotic world of Yellow Pages and free online listings may not be enough to remain visible. You need to market yourself beyond free means. But in doing so, keep in mind that advertising is NOT marketing. You may allow a certain amount of print ads and other means of advertising, but you have to know that marketing works beyond advertisements. Having a good website can translate to more conversions, and hiring an SEO expert to drive quality traffic to your site can be worth the extra budget. In addition, you also need to know how to use social media platforms to promote your business. Cashing in on having a trusted name blog about you or give credit to your business will also ensure a new breed of followers. If you establish enough footprints, you can be sure that a right amount of visibility can turn into an effective marketing model that will get you more customers in the long run.
A “Familiar” Market
Even before you start a business, having a target market is always an imperative. Will your product target locals, tourists, etc. having a stronghold of your customer’s profiles will help determine the lean and peak months of your business? Knowing your market begins with asking questions: What makes them buy, what makes them come back, what age bracket would most likely patronise you, is there an ambience that they’re looking for, and the list goes on. Most startups thrive because they treat their customers beyond commercial value. Notice how Starbucks employees were trained to remember the names of their frequent customers, or how that local produce storeowner has mastered the kind of products that you want on your salad. The added value of knowing your market beyond Ma’am or Sir will reap benefits if you genuinely show them that you look at them beyond just walking dollar signs.
Location. Location. Location.
More often than not, your location can make or break the fate of your business. The location includes knowing the demographics of the people around you, the political climate, the foot traffic, and everything in between. If you are planning to sell food products, you may want to know if the neighbourhood has a big chunk of the Muslim population, or if your local market can be capable of providing your key ingredients all year round. Your location is also a good determinant of price. A luxury goods store may not fare well in a neighbourhood of people with hand-to-mouth income brackets; the same way that a high-end neighbourhood would not patronise products that are otherwise at par with their high requirements for quality and prestige.
Get a Dream Team
Given the fact that partnerships and joint ventures can get messy; this is still not a good excuse not to have other “investors”. The kind of work that people put in on your new business can spell success or disaster. A good advice is to have key people invest either their money or their reputation on your brand. Whether we like it or not, fear can be a good motivation factor. Working with people who have invested in your business will mean that they, too, will work hard for its success because they don’t want to live in fear of either losing their money or losing their reputation. Another alternative is to offer an incentive plan to your pioneering workers. If the business reaches a certain profit margin, you can offer them a percentage of the profit share. If they see that business profitability is working both ways, you can be sure that they will put in every effort to help your brand succeed. After all, they’re not mere employees or outsiders anymore. To some degree, you have made them your “shareholders.”