Keep It Simple
An aspiring businessman once came to me for advice about a
planned new business venture that involved importing products
into the United States via American Indian reservations, thereby
giving the products a duty advantage. He explained the concept
but glossed over the fact that in addition to the usual start-up
challenges, the venture would also require a waiver from Congress.
Now if AT&T or General Motors wants to pursue a new
line of business that requires congressional approval, that approval
may not be an insurmountable obstacle. For a lone entrepreneur,
however, a business requiring congressional approval is
probably too complex or at least too costly and time consuming
to pursue.
Many small businesses fail to get off the ground because they
are also too complex or too ambitious. Entrepreneurs (in this
instance I make no distinction between traditional and lifestyle
entrepreneurs) tend to brush aside obstacles that can impede a
f ledgling business. You should be able to see a clear path from
where you are to where you can sell your product or service and
make money. The fewer obstacles and blind spots in that path,
the better. Or as someone once said (though I confess, I don’t
know who), “If it doesn’t work on the back of an envelope, it ain’t
gonna work.”
Two questions you should ask yourself:
1. Who are your target customers? If you can’t identify the
group or groups that will consider buying your product,
you have a major problem with the concept. You should
understand the people who make up your target market—
their needs, buying habits, perceptions, and the like. At
the very least, be sure that they exist and that you know
who they are.
2. How can you reach your customers? You need a way (preferably
several ways) to reach your prospective customers with
your message. You don’t have to reach every single possible
prospect, but you do have to reach enough of them to
give yourself a fair chance of making enough sales to make
money. What’s more, you have to be able to reach your
prospects cheaply enough to pay your marketing costs out
of sales and still have money left over to pay your expenses
(and I hope more than that).
Suppose you’re a teacher with a great method to help children
who are performing poorly in geometry, and you want to offer
your services privately. You need a way to find parents of
students with that problem—and who also perceive it as a problem
in need of a solution. There is probably no publication dedicated
to poor math students (or their parents), and schools won’t
sell lists of all students who scored below a C in geometry class.
Sure, you can pay for broad advertising on radio or TV, reasoning
that some percentage of those reached will need your
services. But the name of the game in small business is niche marketing.
Paying for broad-based advertising for a niche service like
this one is unlikely to be economical. Because of the tremendous
reach of broadcast TV, rates are set for those selling products
with mass appeal. Lots of people buy beer and deodorants, so
the cost of mass advertising those products is justified.
Email:
info@walmartcom.net
