We recently had the privilege of exhibiting at the National Small Business Chambers’ “My Business Expo” in Johannesburg. With more than 14,000 delegates attending we had the opportunity to literally speak to hundreds of entrepreneurs on the day. What an enlightening exercise that has been. We spoke to entrepreneurs from all walks of life and from so many industries. Each of them sharing their stories, successes and frustrations. Almost getting an inside view into the minds of these buzzing startups.
Throughout the day it was surprising that the same questions started to repeat themselves even though their owners were completely unrelated. There appeared to be similar challenges entrepreneurs faced and they were all so eager for some guidance or a solution, that you could feel the frustrations they felt.
I couldn’t help but bring those questions home to our own journey. I then realized that what makes our service relate-able to startups, was that we’ve been through the process ourselves – a few times in fact.
But that’s just what happens when you’re a serial entrepreneur! 🙂
It turns out, these weren’t new challenges at all. We have experienced them ourselves close to a decade ago and I’m certain, so have entrepreneurs a decade before us.
Here follows the top 5 entrepreneurial questions we were bombarded with.
1. How do I come up with a business idea?
It turns out, as I validated at a recent training event we hosted, that ideas are free of charge and can be found all around us! Every day we are faced with external challenges that has a direct/ indirect impact on our lives. Each of these challenges have potentially more than one solution.
As entrepreneurs have mindsets of problem solving, it makes absolute sense that these problems we face daily should lead to a feeding frenzy as entrepreneurs rush to see who can bring the best solution to the market first.
2. How do I market my product?
As we spoke to the delegates, it became apparent that it is not a marketing question only. Most of them that struggled with marketing their products, also had no idea of who they were marketing their product/service to. They never spent enough time identifying their target market. Without this step during your startup phase, you have no idea of who your ideal client is and where to reach them.
Once you have established this profile and you know where they look to buy, you can outline your marketing plan. Very few startups have any money available initially to spend on marketing, so organic marketing channels such as through your website and social media would be the way to start building a name for your business.
Strangely enough as we have found out ourselves, in this digital age we live in, people are really touched by businesses that also still use primary communication channels. Don’t underestimate the effectiveness of cold calling and knocking on doors during those 1st few months.
3. How do I stop living hand to mouth?
Another double edged sword. These delegates weren’t living on daily survival (when they were lucky) by chance. There isn’t enough purely because they do not have a plan in place of how much they need to earn or enough financial controls in place to make sure they reach those numbers.
At a recent training event I met up with one of the delegates again and even before she could tell me how her business was doing, I could see the stress on face. The poor woman was STRESSED! She told me how she was selling way more handbags then when I last saw her, but she was borrowing money to buy the next batch of stock.
It turns out that she gives the handbag to the customer after receiving only 50% deposit and then hardly ever sees the balance. She therefor loses money on every single sale. Never mind making profit, she was not even breaking even.
By never documenting her plan and identifying the possible financial risks associated with selling to that market, she was never able to put controls in place to mitigate those risks.
4. How do I know if my idea will work?
We’ve come across so many business owners that spend months, if not years conceptualizing and building their products/services. Now I’m all for quality and excellence and the niceties we all strive for. Unfortunately the reality of the business world is a harsh one.
The sooner you take anything you have finished – it might not be your best work or the final product yet – to market, the quicker you can start testing it against your customers’ needs and their invaluable feedback.
You can spend months developing your product based on what you think your customers want, only to find out that they are not looking to buy what you are selling. Even worse is by the time you launch something they would have bought 6 months ago, they have now moved on to the next big thing and you are sitting with massive losses tied down in a redundant product.
5. How do I price my product / service?
I know that when we started out close to a decade ago, this was one of the most difficult things for me. How do you decide on the amount you’ll be charging your customers. Truthfully speaking, for probably the 1st year it has been somewhat of a thumb suck.
Simplest way is to determine the cost of your product, add the amount of profit you want to make to it, and voila! You have your selling price.
Now it’s not to say that once you have this number you’ll have clients buying from you. You might find that once you start selling, that your products are overpriced and no one wants to buy from you. Or, you are selling a shitload of products but there is no money left after paying your suppliers. Chances are you are way under-priced!
As stated in no. 2 & 4, the more detail you have about your customer and the quicker you start measuring your results, the sooner you can make adjustments that could otherwise cost you dearly.
” some serious discussions underway with a few entrepreneurs at this years’ My Business Expo”