Here we’re going to look at why you should examine your business processes in a new business idea before you go spending money on a website and other things associated with your marketing.
TRANSCRIPT
The inspiration for this talk came about as a result of a conversation I had with my friend Mark on the weekend. Mark is quite a capable photographer and his idea was to perhaps start selling printed goods with the photographs that he takes. So he takes a photograph, and people buy mugs and t-shirts and mouse mats, and all sorts of other bits and pieces with his photographs on them.
Now, ordinarily, that’s not necessarily a bad idea. But he was there talking to me about a website before he’d really thought about how the business was going to function, or even how it was going to turn over some money. For example, he had no idea as to how to go about getting customers and how to reach his audience through marketing, and PR, and advertising techniques.
But the crux of it was this. When I asked him how he was going to do all of this, he didn’t have any kit to be able to print all of this stuff. He doesn’t have any mug-printing machinery or something like that. So he’s going to have to spend some money on that. But the key thing is this; he was there asking me about the price of a website long before he’d even worked out whether he was actually going to be able to make any money doing this stuff.
Examine your business processes before you start your new business idea and you’ll improve your chances of success
I’m not saying there isn’t a market for it. There is and there’s plenty of companies out there who are doing this stuff, so it must be profitable. But from his point of view, he came to me looking to get a marketing channel up and running before he’d even looked at the back-end business process. Having said that, in my view, you should examine your business processes regularly anyway.
And this kind of issue is actually quite common. Mark knows there’s a market but he has no idea how he’s going to sell it. He has no idea how he’s going to produce all of these goods. He has no idea how much margin he’s going to make on a per-product basis and, as a result, he has no idea how many products he’s going to need to sell to turn that idea into a living, and maybe even making some money.
And, so, it kind of reminded me of a time when I was running a training business, well over a decade ago. I developed a training product which I thought was fantastic. I thought yeah, if I sold this, I would buy it. So I spent loads of time, days and days, putting together this package, emailed out to my database, and nobody even expressed an interest. Not a single taker.
The point was, I hadn’t even done some real research into whether the product was really needed. I just thought it was a good idea. Mark is kind of similar in that he thinks it’s a good idea, he knows there’s a market. And, so, he’s already one step ahead of where I was. The problem is; he hasn’t even thought about how his business is going to work. And unless he understands that, he could go launching a website, he might even pick up some customers, but he hasn’t really got that back end, that business process, worked out.
But it doesn’t end there: when you’re an entrepreneur, you come up with ideas for stuff all the time, and it can be a bit of a curse. It can be quite frustrating at times because you don’t know what to do with all these ideas. Some of them are good ideas. To be honest, most of them probably aren’t.
But the key is this; if you’re going to spend some money on developing a new business idea, do your research first.
Make sure that you can actually make some money doing this. Make sure, especially, that there is a market for what it is you’re trying to sell. And make sure that you’ve got the processes in place for when you open up shop. You’ve got everything you need to do to fulfill the orders, and you’ve got everything you need to do to go out and get some customers.
Don’t make the mistake that Mark is making. I think I might have stunned him a bit when I started asking in a bit more detail about his business idea and how it was going to work. But that’s fine, I’d rather him avoid making an expensive mistake than see him waste his money and not intervene to try to help him. Yes, of course, I’m going to help him; he’s a friend. But I don’t want him to waste his time, effort, and money on something which he’s not going to be able to make work. And, likewise, with my training idea, I don’t want people to spend time and money and effort on something which they can’t sell.
So think about this. If you’ve got a business idea, look at how the process is going to work. How are you going to produce and deliver? And, more importantly, how are you going to get and keep customers?
I really hope that it’s useful. We’d love to hear your feedback and your questions on this. Just let us know in the comments below.