The main reason some African businesses fail is not for lack of capital – it’s for lack of knowledge. Knowledge in your business – most important, how to run your business, is the most potent weapon you can have. It often means the difference between a good and a great business, as well as success and failure.
That said, one of biggest mistakes most would-be entrepreneurs make is going into business based on what they think people should buy, rather than what people really want or actually do buy.
Here is how you can use knowledge to your advantage and stay ahead of the pack:
1. Identify your customer.
You need to first of all identify who your ideal customer is going to be. Knowing your customer will tell you what to sell to them. Questions like, “Is the target male or female?”, “How old are they?”, “Are they married?” — as well as deeper questions such as, “What was their main motivation purchasing a particular product or service?” Knowing who will be buying your product or service is vital to your business success – how else will you find your customers if you don’t know who they are?
2. Test and measure demand.
As an entrepreneur, conducting a feasibility study of your new idea is very important to the survival of your business idea. What you need to do is to ask friends who are willing to tell you the truth about the product or service you are bringing on board. Big companies spend lots of resources testing ad campaigns and hiring focus groups, but you can do a lot more effective research on your own by simply starting small – then testing and measuring everything you do.
Now you have to develop a marketing strategy to make sure these potential buyers know about your great new business. With today’s internet capacity, marketing can be relatively low-cost, using online coupons and mailing lists. Brainstorm ideas with friends and family, and look at what your competitors do to get new businesses.
4. Start your list of contacts.
At this point in your start-up and planning phase, you may have a list of vendors, suppliers or even potential customers. If so, great! Keep building that list and start to develop a communication strategy to keep in contact with that list on a consistent basis. Today’s contacts may be tomorrow’s customers. More importantly, they have access to entire networks of people who may want or need your product or service. The real goal of networking is not making a sale to your direct contact. It’s about creating a relationship with that contact that leads to referrals and word-of-mouth leads down the road.
Unless you’re lucky enough to find a hole in the market, your business will have competitors. Check them out, because your future customers surely will. Competitors can be a great resource to you as a start-up; you can see how much they charge, what marketing strategy they use and the location they chose. Ask yourself, how can I do better than the competition?
Timing is crucial, especially for a start-up. Opening an ice-cream shop in January is a bad idea. Do you expect your business to be seasonal? If so, time your opening to the strongest consumer demand. You’ll come out of the gates with a flood of new customers, customers who will come back for more.
In an era where many “crazy” ideas can become viable businesses raking in reasonable revenues you may want to follow through these success tips. See you at the top.
Author: Issah Adil, Event Planner at Russell Ray Promotions.
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