We’ve recently been approached by a number of startups keen to launch and get busy making the mucho dinaro.
We’ve only converted a handful to clients because they’re the ones that would listen to our message: do your homework first.
Take the latest: a successful businesswoman who owns a property development business. Her new business idea: online sale of vitamin supplements and alternate therapy products. No industry relation at all… She uses them, so surely there’s a market opportunity to exploit?
How much to build the ecommerce website, launch it and promote it? Wait, how about we spend some time analysing the market opportunity and looking at how to enter the market, what we might need to spend to make a dent in it and what our breakeven point is, in terms of product sales? Perhaps let’s find out if launching with both vitamins and alternate therapy lines is a good idea, or maybe just one of those is a better approach?
Would she be willing to invest $10,000 to give her next $100,000 the best chance at delivering back a win?
“No thanks, I’m looking for a company that can just help me begin”. And on she goes until she finds someone willing to give her what she wants, not what she needs.
If you’re a start-up and you don’t have a business plan and you haven’t stopped to spend some time doing market and competitor research in order to determine the likelihood that you’re going to make money back, then that’s what we’re going to recommend, every time. Because that’s what you need.
Think of it like insurance. You’re spending a little money to protect the large amount that you’re soon going to spend on infrastructure (website or premises), marketing, assets (stock or furniture) and assorted expenses.
Normally, the result will be a plan that shows you how to approach your market in the way that is likely to deliver the best return on your investment, shortcutting the time it takes to be profitable.
Occasionally, we’ll conclude that your idea isn’t great and that it stands a good chance of wasting your money.
Both are preferable to the alternative.
In fact, you should realise that if you choose to view the boring, seemingly expensive planning process as an unnecessary slog that’s just getting in the way of your unbridled success you will still be doing the market research component.
The problem is, you’ll be doing it after you’re fully committed to your idea and you’ll either waste a lot of your money learning the hard way how to adapt to your market, or worse, you’ll lose all the money you could have put towards a better, more successful idea.
Start-ups: do your homework first. It will make you more profit, faster.