GET CLEAR IN YOUR BUSINESS
By Rod Alan Richardson
After watching the development of a number of emerging companies, I’ve observed a core issue that holds an entrepreneur hostage in the proverbial fog. The problem is simply the clarification of direction. Not being clear results in a number of issues that range from investors not understanding what you do to customers not “getting” what you offer.
To develop business clarity, you must focus on and internalize the answers to the five following questions. Not knowing the answer to these questions will cause sales to suffer and the over all operation to not progress.
- What is the problem you want to be the solution to? Notice that I did not say, “What is the problem you are the solution to.” Always begin with asking yourself, “What do I want to be the solution to?” This question seems basic enough; however, you would be surprised how many people in business cannot answer this question and how many are not serving a market they want to serve. Not knowing the answer means that your customers and investors will not understand what you do. If you are launching a new company, or product, this question should be the starting point and not the ending point. How many times have you seen someone build a new product only to say, “We have the widget of all widgets; Now, let’s figure out if someone actually has this problem—and do they care enough to buy a product from me?”
- Who has the problem? When launching a new business or product, be sure you know who is going to buy your goods. Looking for a market after the fact is a risky path. A successful friend of mine once said, “If I was a farmer, I would not put a seed in the ground without knowing who was going to buy the finished crop.” I don’t think it is a coincidence that he always makes money off nearly every business he starts. Consider doing surveys to understand the interest level of your proposed audience.
- How many people have this problem? I have consulted a number of companies that really had no idea concerning the size of their market. This is especially evident in small businesses. Most people launching small businesses in local markets do not put forth the effort to plan properly to understand the market they wish to approach. Take the time to find out how many people have the problem you wish to solve.
- How much can your market afford to pay? It isn’t enough to just have a solution to a problem that a lot of people have. They must be able to afford your solution. Price resistance will stagnate sales and leave you wondering why no one seems to care about your offer. Pricing strategies vary depending on the market you are approaching. If, for example, you are selling a consumer product, and you are dealing with middle-class America in a mass market, your solution may have to be between $10 for no resistance to $100 for moderate spending resistance. Above $100 and you will begin to affect the household monthly budget. Any time you put your customer in a position that they must make a ‘serious’ financial decision, you increase the level of skill required to sell your product and lengthen the selling process—sometimes to the death of your business.
- What is your solution? The product offering is the moment of truth. It should be correctly positioned to answer the previous questions. Don’t be afraid to modify your offering to develop a suitable solution. Most of us act like parents when it comes to decisions about our products. Act like an investor. Build a solution that will sell, provide a strong value to the purchaser and make you an honest profit in the process. Don’t be so attached to your products that you fear radically modifying your offering to meet the needs of your market.
Now that you know what problem you want to solve; who has the problem; how many people have the problem; how much your market is willing to pay for a solution, and you have created an optimal solution, you are ready to take on the task of really building your business on purpose. As you follow this pattern of building a business you will meet with a higher level of success. You will be able to craft more concise and direct marketing messages and achieve your ultimate goals through business ownership.
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