Congratulations, you’re an entrepreneur! You got passionate about something or you recognized that you have a special skill set. You printed up a business card and voila! You are small business owner. You are now a member of an awesome club. But later, you may find that you are a card-carrying member of another group: the 44% Club. This is the percentage of people who open and then close their business within the first two years.
Now, the business didn’t fail because the owner didn’t know how to produce the widget, bake the cake, or create wonderful designs. You don’t make it into the 44% Club because you don’t have the technical skills to get the job done. Quite the contrary. You are good at what you do. But in our excitement to follow our passion, we don’t honestly answer these four questions:
1. Do people need what I am selling?
When I scroll through my social media news feeds, I almost always find a post from someone complaining that people are not buying their product or service. I know when you got started your friends and family who really, really love you made up your client base. But you can’t build a sustainable business on the love and good will of friends and family. At some point, you must find other people who want what you are selling and don’t mind paying for it.
A quick google search will show that there are people who make vegetable-flavored ice cream. But after a quick trip to my local grocery store, I wasn’t able to find “Peas & Carrots Ice Cream”. Marketing research will tell you if your idea meets the needs of an untapped market just waiting to be discovered or like the “Peas & Carrots Ice Cream”, if it’s just another sneaky way to get your kids to eat their veggies.
2. Do they know that they need it?
I never knew I needed a “1,000 songs in my pocket” until Steve Jobs told me I did. But after his presentation, I did like millions of other people; I bought an iPod Shuffle. Which of course led to the purchase of more iPods and iPads. And even though I primarily use a Samsung Tablet for my business, I still keep an iPad because that’s where all my music and most of my books are stored.
A well-executed marketing plan will let potential customers know that you have exactly what they need even if they don’t realize they need it! Meeting this newly discovered need could help them discover they need your other products and service. Wouldn’t that be awesome?
3. Are they willing and able to buy it?
So you have created this amazing product or service and have convinced people that they need it. Yet you aren’t making any sales. I know, I know…we made all the motivational speeches about building better mousetraps and people beating a path to your door. But the last time you looked out your door, you didn’t see the people or the pathway. Herein lies the truth about business;
People are motivated to buy for a variety of reasons. The person who buys clothes from Walmart is not the same person who buys their clothes at Armani. When you know who your ideal client is and how they reach their buying decision, you can position your product in a way that speaks to their emotion. Good branding is crucial for every type of business from high end to high value.
4. Can I consistently deliver my brand’s promise?
My hair stylist is LaTonya, the owner of Estah Locs Hair Care. She has been my stylist for the past 10 years. And with the exception of the dryers, sitting in her salon is the perfect way to unwind after a long day of work. She has created an environment that is professional, welcoming, and inspiring. I like that! This is the exact same experience that I had the first time I went to get my hair styled. Back then, she was operating out of the garage of her home.
LaTonya set the standard for her clients early on. When she was renting a booth in someone else’s salon, you got the same experience with her. She stood out in an otherwise average location. A few years later she opened her own location. New place, same experience. There are other great stylists in Orlando, some with cheaper prices. Yet, I drive right by them on my way to Estah Locs. Consistently delivering on her brand promise has created a lifelong client and friend.
The answer to one more question can keep you out of the 44% Club. You would think it would go without saying but I will say it anyway. Can you turn a profit? I read the blog post about businesses existing to be a blessing to others and I get that. But it you can’t turn a profit, you won’t be a blessing to anyone for very long. Take an honest look at your business. Can you generate enough revenue to provide a good life for you and your family? If you can, great! If you can’t, then maybe what you have is a good idea for a great money making hobby or “side hustle”. And that’s okay, too.