As a marketing professional, I work with brands and products at various stages of their life cycle. In recent years, I have concentrated on helping start-up businesses. Interestingly, I have learned many of the questions you must answer to get a business off the ground are the same questions you should be asking as your business transitions through growth phases. But for this blog, I’ll concentrate on start-ups as the early days of a brand can be especially tricky to navigate.
Research first then product development
Depending on the model you use, and the size of your vision, the start-up phase will either be at the very beginning or come soon after the seed phase. At this stage you are likely to have underestimated the finance required and the time it will take to get your product to market, but you will (should) also be continually checking on the validity of your product offer and ensuring your product or service has a large enough market with a very real demand.
Too often I have seen companies develop products or services first and then determine if there is a market for them. Of course, this is all completely back to front, and unless you have a golden touch and/or a whole lot of luck, your business is likely to fail even if you have access some cash reserves.
Starting a start-up business
Importantly, if you are in start-up mode you should be in close contact with your potential and current customers to ensure you can answer the following questions. Ideally these would have been answered before you opened your doors, but if not, don’t put off this work another minute.
1. Are you offering the right product or service mix?
Look at what you’re proposing to sell. Has it been sold before, and do you have experience dealing with the target market. Some industries don’t want to talk to outsiders, so you may have to review the contacts and capability of your team. It’s very difficult when you are starting from scratch in a new market, so you may need to hire someone with connections who can help you navigate your way through the new industry.
The other important aspect is your capability of delivering the product and/or service. You do not want to over promise and underdeliver. Be very careful when you are starting out not to oversell your offer. Although I don’t believe you should ever sell on price alone, sometimes you need to offer a more basic product to begin with until you can provide a sales history and prove your value.
2. How do your products stack up against your competitors?
The first thing to do is a full competitor analysis – this includes how they position themselves and the products and services they are offering, including price, packaging and all the add-ons. Some products require relationship selling and others can be sold sight unseen with almost no lead time at all. Determine where you fit and see how your offer compares.
Determining your value really needs to be a formal process by working through your value proposition. I would highly recommend hiring a professional in to help steer you through this process. Not only will they be objective and keep you honest, but they’ll also be able to provide valuable information which will help you clarify how you differ from your competitors. If through this process you discover you’re not offering anything different, then either your price or service is going to have to beat your competition or you’ll just have to offer more value adds. If nothing sets you apart, that is you don’t have a Unique Selling Proposition (USP), you’ll struggle to gain market share.
3. Have you defined your target market and how to get to them?
As a follow on to the first question, you need to evaluate your potential customers and their demographics to find some similarities. It’s so much better to segment your market and target them in groups. For example, if you’re selling coffee cups, you may want to segment your market into geographic regions and target them region at a time.
It’s so much easier to be strategic instead of scattergun. The last thing you want is to have lone customers scattered in geographically different places as it becomes very difficult to service these customers and increases your costs for sales and distribution. Take the time to plan how and when you are going to target your potential customers and ensure your sales people follow this plan to the letter. Obviously, you won’t turn away business if leads come direct to you, no matter where they are positioned, but please ensure all your potential customers will end up being profitable, even if you need them to get some initial logos under your belt to show a service history.
4. Is your potential market going to provide the growth and return you will need to be profitable?
Although a fortune teller would come in handy, there are some specific industry economic forecasts you can access. Look at sector growth over the past few years. You don’t want to be late to the party like the investors who bought Bitcoin in the last year or so. They came way too late and there were issues with access and really the world had already moved onto another crypto currency.
Another important consideration is to determine the market share your competitors hold. Is there room for you and is there opportunity for the market to increase? New technology, disruption and alternative services provide growth potential, you just need to ensure your value proposition is strong and you are going to deliver great product and services to your customers.
5. Have you positioned your company (brand) as a real contender?
Assuming you have been able to successfully address all the other questions, you need to ensure your brand has been set up to support your success. Your brand encapsulates every touchpoint for your business including your digital and physical presence. Your website, emails, staff uniforms, office fit out, telephone answering – the whole box and dice. You must ensure everyone knows what your brand stands for and the part they play in your business.
Again, I would recommend you get some expert help in this area. Every company should have a Brand DNA and a brand blueprint which sets the tone for all their messaging and approach to their marketing. When you need to set up your company structure and trademarks, you go to a specialist lawyer, and similarly when you are setting up your company’s brand, you need to go to someone who is an expert. The unfortunate thing about marketing is that everyone thinks they know how to do it. But if everyone really did have the expertise, we wouldn’t have such a high number of failed businesses.
Don’t underestimate the power of business planning
It is likely you have underestimated the time and resources you need, and you are unlikely to be seeing any return yet. Although you might think the main challenge when starting is not to burn through what little cash you have, unless you do this vital work now, you are going to regret it in the future. Regardless of how far you’ve come already, you need to continue checking your progress to see if your business is on the right track and or if you need to pivot. The work you put in will benefit you in the long run.
Rhonda Locke is a highly experience marketer and brand champion and is the Founder and Director of Unlocke Creative.