How to start your own profitable business

Do you want a sure-fire way of creating an ongoing, profitable business?

Conventional wisdom, taught in business classes and business schools, is to create your product or service first then look for the target market you can sell it to.

At Business School doing my MBA I was taught “Find a need and fill it”. The idea is that if you can identify that customers have a particular need, you can satisfy their need and charge them for it.

So most business owners set out with an idea, create their product or service then start looking for customers to sell it to.

But that’s the wrong way of doing it. Instead, let me change your thinking a bit.

A business person asked two guys: “If you were to start a new restaurant, and you could have the ultimate advantage over the rest of your competitors, what would you choose?”

The first one said: “Location, Location, Location – you have to have a location with a lot of traffic coming past your door so everybody can see where your restaurant is.”

The second one said “People, People, People – without the right chefs and staff the restaurant will get a bad name and fail”.

They were both wrong.

The shrewd business person’s answer was: “Hey, location counts for a lot – with the right location you’ll get a lot of potential customers walking past. With the right people it doesn’t matter where you are – many customers will travel far to come to you.”

“But, the ultimate advantage is to have a starving crowd right outside your door. If you have a starving crowd it doesn’t how good or poor the food is, it doesn’t matter how many people walk past that may or may not be hungry. With a starving crowd you’ll sell any food at any price.”

YOUR first step is to find a STARVING crowd!

If you don’t have a crowd starving for your product or service, you’ll find it very difficult to sell.

Satisfy wants not needs!

Everybody can find needs – but your critical task is to find out what your customers actually WANTS.

I’ll give you an example.

Nobody needed to have music with them wherever they went – but everybody wanted a walkman. It sold like crazy. Today MP3 players provide more convenience than ever before – but are very expensive. Who needs one? You can use tapes or CD players. Yet many, many people want one and spend lots of money on them…

Why do people buy Mercedes and BMW? They might need transportation; they might need a way of quickly getting from A to B in a safe and fast manner. So why not buy a Volvo? People buy a Mercedes or BMW because they want it, because of the status, feeling and identity it gives them.

Not because they need one.

So be careful – do your research and find out what the market wants, not needs!

You’ve found a market that has a “want” – your next step is to develop or find a product or service for this market.

Remember: you are selling to a starving crowd. Sell food, not pots and pans. They haven’t got the time to learn how to cook, prepare and dish up. They want to eat right now. They might need to learn how to cook to feed themselves next time, but right now they want food. Sell them what they want, not what they need!

Now you are getting ready to start selling. Create a compelling sales letter listing all the benefits of your product or service. You might not show it to anyone, but it’s extremely useful to have it for yourself.

And if you can’t write a compelling letter with all the benefits, it might not be the right product or service for your market.

After all, if you can’t sell it to yourself, how will you be able to sell it to your customers?

This also becomes your “Cheat Sheet” when you create adverts, posters, banners, leaflets and other marketing material.

Most people don’t know where to start when they sit down to create an ad – with a cheat sheet like that you’ll be able to pick and choose what you want in the ad, and your chances of selling go way up.

As you’re launching a new product or service, this cheat sheet also becomes the basis for a press release. All papers are hungry for local news – and new business initiatives are always welcome.

The next step is to test your idea.

Testing is critical. If you don’t, you may spend a lot of money on building stock and promoting your product or service. If it doesn’t work, you can lose everything you’ve spent so far.

You should make it a limited test initially – small enough to prove that your product or service sells, but not so large it commits you before it’s proven.

History is littered with people who bet everything they had on an idea that didn’t work. Warehouses full of products that couldn’t be sold.

Indeed, just spend an evening watching Dragon’s Den and you’ll see harebrained ideas that don’t work, can’t work, where people have mortgaged their house and spent years developing their idea.

All for nothing.

Remember, when you test your idea there are many reasons it might fail.

It could fail because your target market isn’t seeing your marketing and promotions; you could be selling it in a boring way that makes your target market switch off and move on; the idea just didn’t work; it’s a great idea but the market just isn’t buying into it; it’s the wrong season, or many other reasons.

The key is to make it a limited test so you only risk a little money. At the end of the day – if you can’t make a limited test work, you won’t make it work when you roll it out to everybody.

If you truly believe in the idea, and you didn’t make it work – try again but with a different approach. Try different advertising, for instance radio instead of newspaper. Try posters instead of leaflets.

If it doesn’t work – go back to the beginning. Or develop a different product or service. If you keep trying you’ll eventually find a winner.

And if it works? Roll it out. Repeat the testing, but with a larger budget. Increase ad sizes, increase your marketing budget, and sell more. If you reach a plateau, be careful, but if it continues to work, then continue to spread the words.

This formula is powerful. It’s proven. And it works.

Ignore these simple steps and you’ll find your path to success becomes much more of a struggle.

If you’d like some more ideas, or affordable help to develop your own business, call 902 789 660 for an informal chat or visit EMTenerife.com!

Leave a Reply