In business, not every good idea succeeds. The economic downturns have shown us that even if you get millions to fund your business, your business could still fail if all the elements for success are not present. Even if your business has been successful in the beginning, there’s no guarantee that it will continue to succeed especially if you do not keep up with the changes.
So what do you need to do to successfully jumpstart a new business? Here are six steps to launch a new business successfully.
1. Provide a benefit.
A new business stands a greater chance at success if it is responding to a need of a consumer. Your potential customers will buy your products or service if they see that it provides some benefits to them. You must be able to respond to their “what is it for me” question.
As a new business owner, your main task is to understand the difference between the features of your business and the benefits it provides. For example, if you are in the business of selling baby gift boxes, the feature and benefits are:
Feature: Baby toys, books, CDs and videos not found in department stores Benefit: The customer will be able to conveniently find in one location the baby gift items she or he wants.
Remember, customers buy on the basis of the benefits, and not the features of your products. This is what you are going to use as your main selling proposition, or what you will highlight to convince people to buy your products and services. By understanding the business and its benefit to consumers, entrepreneurs can differentiate their business and create niches in the market where they can enter and survive long enough to build.
2. Determine the fit with your market.
Before you can start marketing your new business, you first need to determine your target market. That’s right: not everyone is your customer. Some people erroneously think that they should sell to everybody, and that targeting will limit the scope of their pool of potential customers. Wrong! The purpose of defining your market is to make your life easier and increase the effectiveness of your promotional activities. You can’t strike anywhere: you need to focus your energy and money.
To identify your market, you need to look at your market data and personality attributes of those whom you think would most likely buy your products. Aside from the demographics of your potential customers (age, gender, income level, geographic location, etc.), you also need to determine lifestyle factors. Are there any special interest activities that they belong to? Are there any social factors and cultural involvement that govern your customers? How do you think your market will use your products or services?
3. Right timing is everything.
Some new businesses are way ahead of their times. You may have a brilliant idea, but if the market is not ready for your products, the venture will fall by the wayside.
If you have a product that is so new in the market, be prepared to take on the cost of informing the buyers. Since they are not familiar with your products, show them how it will benefit their lives and demonstrate how they can use it. Infomercials, while costly, are very good vehicles for very new products.
4. Be ready to support your business.
One business reality is that you need money to earn more money. You need resources to allow you to buy equipment, supplies, procure or manufacture products, package your products well and market it. Will your existing capital allow you to buy all the assets that you need in your business? How are you going to finance your inventory? If you are starting an online business, do you have the resources to create your site and pay for its upkeep? If your business does not show a profit within the year, do you have the money to support yourself?
When starting a new business, you need to consider three major expenses and plan for them accordingly: your living expenses, direct costs and overhead. Living expenses is the “salary” you must produce to support yourself and your family. Direct costs include supplies, materials, and others that you need to produce your product or deliver your service. Overhead is the cost of running a business, and it covers marketing, utilities, office furniture and equipment.
Sure, you can start a business even with little cash, but you need to be extremely creative in stretching your money and be prepared to compromise the growth of your business. You will have no choice except to build your business gradually.
However, having money is not enough to assure success. The dot-com woes, especially, showed that you can burn millions and millions of dollars only to end up a failure. Digital Convergence, for example, got $250 million of funding for investors to distribute Cue Cats barcode readers for free yet laid-off most of their staffs after their business model showed to be unsustainable. The key is to use whatever money you have– smartly.
5. Develop a blueprint for success.
You cannot go into a business unprepared. It is important to have a plan. Think of going to business like going to war: you need to develop strategies to help you overcome your enemies. Without thinking through what you want to achieve and how to get there, you are a sitting duck waiting to be clobbered.
Starting a new business entails a thorough and objective analysis of both your personal abilities and the business requirements. You need to have a clear strategy for marketing and the production aspects of your business. If you are a retail store, you need to have a plan in terms of procurement and sourcing. For all the excitement of a new business, you need to know where and how you will get the funds to finance your business. Do you have the available resources to make this business a success? And a million other details.
A business plan is essential. Even if you do not want to write it all down (especially if you do not have investors), the process of preparing a business plan allows you to think through of every aspect of your business. It makes you think about the viability of your business and helps you avoid costly mistakes. When starting a business, you base your projected performance on a set of assumptions. If you have a plan, you will be able to test your planning assumptions and create fall-back measures in the event that real life proves to be vastly different from your initial visions.
If you think through your business well, you can discover problem areas early on and initiate efforts to correct the problem. Remember, the business owner with a realistic plan has the best chances for success.
6. Market, market, market.
In this world dominated by hype, you must be prepared to publicize the business or its chance for success will be slim. Unless you are a nationally known name with built-in clientele or your business is located in a prime location, you need to promote customer awareness for your business. If you’re on the Web, you cannot expect to just sit in a corner and expect people to stumble on your site.
Your marketing plan should revolve around three goals. The first is to inform customers what you have. You can do this by letting customers know what you have for sale, either through press releases for possible publication in print and TV media, brochures for your customers and leaflets distributed in your neighborhood.
The second goal is to persuade potential customers to do what you want them to do – buy from you. If you’re in e-business, you do this by writing a very good sales copy on your site including testimonials from satisfied clients. If you have sales representatives, they could do the persuading in your behalf.
The third function of marketing your business is to remind existing customers to come and buy again. If you are a Web marketer, you do this by sending a regular product updates, special offers and promos to customers’ emails. As a smart marketer, you know that you need to hold on to your existing customer base as it is much harder (and more expensive) to get a new customer than to sell to someone who already knows your product and the quality of your customer service.
Recommended Books on How to Launch a New Business Successfully:
- The Accidental Entrepreneur: The 50 Things I Wish Someone Had Told Me About Starting a Business
- The Six-Figure Second Income: How To Start and Grow A Successful Online Business Without Quitting Your Day Job
- Start Your Own Business, Fifth Edition: The Only Start-Up Book You’ll Ever Need
- Become Your Own Boss in 12 Months: A Month-by-Month Guide to a Business that Works
- So, You Want to Start a Business?: 8 Steps to Take Before Making the Leap