Tuesday, 17 July 2007

Sell or Fail

New research by NatWest has revealed that Reality TV shows such as Dragons' Den and The Apprentice are inspiring millions of new business start ups. Apparantly 17 million have considered an idea to create a business, with 30% intending to make their dreams a reality.

That's 5.1 million new businesses coming your way soon!

While on the one hand it is brilliant that so many are now being inspired to go into business, without wishing to sound like a pariah of doom, the sad fact is that within 2 years around two thirds of those new businesses will have failed. That's c3.4 million people dealing with the fallout of business failure and all that goes with it - piles of unsold stock in the garage, boxes of unused brochures/leaflets/letterhead, and in the worst cases bankruptcy proceedings and even marriage breakdown.

I know, not just because I have been there myself, but also because I receive a lot of emails from people who are in that early stage 'Pit' - where all the initial enthusiasm has evaporated, all the money has gone, nothing is working - and they are desperate for help.

The problem with most of these businesses is that they simply have no SALES.

You can have the best business idea in the world; the smartest office; the best website; the flashiest brochures - but without SALES you do not have a business. Yet so many businesses fail to put Sales as their Number 1 daily priority above all else that may be going on - tinkering around the edges of their business instead of going out there and getting deals.

This is the big myth of business - write your business plan, raise capital, put your product or service into production, then go out there and the money will just start pouring in. Personally I think it should be done the other way round - create your product or service in the smallest most inexpensive prototype form; go out to the market and test the reaction (even if that is a last minute cheap stall at an exhibition or a couple of meetings with retail buyers), and SEE IF IT SELLS.

Even if it doesn't, the feedback you will have gained will be invaluable in honing your product. Too big? Too small? Too expensive? Too cheap? Wrong Colour? Too fast? Too slow? Too sweet? Too salt? Badly packaged?

Using realtime customer feedback as your market research is the best way to protect your business from failure - so keep nimble and keep testing until you hit the magic formula.

And only then launch your business in a big way.

Good Luck!


1 comment:

Business Ideas said...

Great post, sadly so true, if only more people would prove their is a market for their product/service before spending their life savings.