Welcome to part 2 of “8 Things to Consider Before Starting your Business.”
Parts 1 talks about the lifestyle change you should expect and what your start-up costs may look like.
3. Is There A Market For Your Business?
This question may be silly but you’ll be surprised at how many companies fail because the founders didn’t ask themselves this question before hitting the ground running. Yes, the ultimate reason for why startups fail is due to running out of money, but a major factor for running out of money is that consumers don’t have an interest or need in your product.
CB Insights’s study of hundreds of company Post-Mortems, a letter from the company about why they are shutting down, concluded that the number one self-identified reason for failure, ranking above running out of money, was a lack of market need for their product. In 42% of cases, the startups tackled an interesting problem that didn’t really have a market need. When determining if there is a need for your product, take the following steps:
- Conduct market research – There is so much information readily available on the internet. View this step as an investment in the future of your company. Great market research will give you an idea of the health of your industry, helps shape your product based on the segment of the market you are targeting and it will give your company an identity.
- Talk to your prospective clients – Markets are conversations and dialogue is key. One of the worst things you can do when getting an idea is running into a cave and work on your product in a rush to get it to market. Why? Because you need to really understand your clients and their needs. No, you can’t just send out a tweet or a quick poll, you actually need to sit down and have real and deep conversations. Your targeted customers will tell you what they want or don’t want in a product. Would you rather talk to them now and adjust your platform as needed or would you rather talk to them 6 months from now when you’ve already put in thousands of dollars and hundreds of hours into a misaligned product?
- Ask an Expert: If you’re fortunate to have some sort of mentor or know someone personally that is already in a similar field, reach out! You truly can’t do enough research before starting your business so reach out to anyone you know who can give you any information.
4. How to Reach your Customers
You also need to begin thinking about how you plan on reaching your customers and informing them that not only that you have have a product to cell, but also on why they need it. Business that start off with a lot of money can usually hire a marketing manager or marketing team to take care of their brand awareness and customer acquisition. However, if you are keen on doing this yourself, you need to consider how you plan on reaching your customers. The decision you make will impact the time and capital you allocate to your marketing strategy. Here are some strategies to get your company to the forefront of your customer’s mind:
- Email Lists: Email lists have been around for a long time and can be effective if done right. You can either buy an email list or rent one, meaning you won’t know what specific emails are, from multiple services. However, the best strategy is to build your own and here’s why. Building your own email list may take a little bit of work, but you will know that the emails you send out will go directly to customers who actually want to receive an email from your business. Buying an email list or renting one doesn’t guarantee that those who receive your email even are in the market for your service or product.
- Start a Blog: One way to help out your marketing is to start a blog that informs and educates your target audience. By consistently posting relevant information, you are building trust with your target audience. You are exhibiting expertise in your area and your audience will value that. Moreover, you also have the chance of bringing in customers who you weren’t even targeting. Lastly, search engines are constantly grading your website and generating traffic, whether through a blog or by direct search, will only grow your online presence and visibility.
- Encourage Reviews: If you have satisfied customers, you should definitely be asking for reviews on any major platform. And there is definitely a ways to encourage your customers to take the extra time to leave a review on not just popular sites like Google and Yelp, but also on industry specific sites. Also, it’s important that you also manage your reviews and address any negative reviews you may have gotten.
- Host a Contest: This may seem silly at first, but hosting a social media or online contest can help spread brand awareness while simultaneously gaining rich data on your customers. Social platforms like Twitter of Facebook have built in analytics tool to help you analyze your followers and those who have entered your contests and giveaways. This can give you insightful data on who your marketing is reaching and who is interested in your product.