Taking the decision to launch a new business is not an easy one. How do you translate the feeling that a gap in the market exists, into a proposition that is going to appeal to potential customers?
Understand the existing market and how customer needs are being served.
In order to disrupt you’ve first got to identify the status quo. A sound understanding of the market you’re entering is a must. This means looking at what customers are trying to achieve with their purchase, how incumbent suppliers attempt to satisfy this need, what distribution channels are used and what problems exist.
This understanding can give an entrepreneur intuition about what alternative would work better. Be cautious about asking customers for product development ideas directly, as many will tell you to provide what is offered today – but more of it for less money! But do ask them what their problems are. Solving problems is a great way to find a product or service that people will buy.
Find something you can sell
Anyone can build a business that is profitable if it is popular. The skill of an entrepreneur is creating demand for your service. It’s essential to have something with benefits that are easy to communicate and where there is a clear route to market. If you can’t explain easily why someone will buy it then this should tell you that your service isn’t right.
Make sure something works before spending big money on it
A common mistake that I see in my own industry is for people to spend heavily on marketing for a service that they think will work. This is a blunt tool for business growth and means you need a lot of money. I prefer a test and learn approach, whereby lots of small tests are tried with the target market and service varied to try and find the optimum approach.
Continuously improve, continuously!
Once your business is live and you’ve won those precious first customers, devour their feedback. Ask them about the service you’re delivering. Critically evaluate the entire customer journey. What efficiencies can be made throughout your business to reduce barriers and pain points? Remember, disruption occurs because innovation has stalled. Never let your business fall victim to the traps your competitors fell into.
Be prepared to work hard
Well, this sounds obvious doesn’t it? If you don’t relish being challenged, moving outside of your comfort zone, or can’t deal with the fact that people don’t necessarily want to buy your ‘killer’ product or service, then maybe this isn’t for you. You’re going to need to be resilient, learn from failure and surround yourself with people who can help you succeed.
Successful businesses don’t come easy and you’ll need to roll your sleeves up. At start-up stage you might even find yourself on the office toilet cleaning rota or sharing the lunch-making responsibilities like we did!
By Guy Myles, chief executive of Flying Colours