Its Your Money, Why Burn it?

I was editing one of the final chapters of the Market is Always Right this morning to get it ready for publishing and felt very inspired to ask a question in this week’s blog.

Right now more than 70% of new businesses don’t survive to their 3^rd anniversary.

We know from endless publications and pieces of research that in the main businesses simply run out of money because they can’t make the sales they need in order to survive. We also know that there is only one reason that companies don’t make sales – they are trying to sell something their market does not want to buy.

I find this surprising because when you consider starting a business, you pour in your passion, ambition, belief and your money to make it work. It takes over your life as you focus on your ambitions and your goals. All of this is brilliant and incredibly important, so why do so many fail to make the sales they need?

So here is the big question. While your ambitions and ideas are all great and I hope you achieve them all, what about the market’s needs?

Would it surprise you to know that in our experience and that of others a lot more than half of new businesses have nowhere near the level of market knowledge they need to maximize their chances of success?

This is quite surprising in some ways, because market research is incredibly inexpensive and you can do it yourself before you invest money in setting up the business and spending your savings on a business that is not fully developed and according to the stats, is therefore likely to fail – which is pretty much like burning your money you don’t need to.

This is not a negative post, in fact I hope you take it as a hint that there are some simple, low cost and very effective things you can do that will save you a lot of wasted money, time and stress simply by doing more to get to know your market as early as possible.

Tomorrow, I’ll continue this theme with some ideas you might want to consider when researching your market.

You are what the market says you are

In yesterday’s blog we mentioned that the market will categorize your business to suit it's own perceptions of what you do. You have little or no choice in the matter.

‘No way, we are totally different, unique. There is no one like us. We’re in a category of our own,’ you cry indignantly and we can understand why. But….

…unfortunately its true - the market decides not you.

There are a number of reasons for this, but for the purposes of this blog entry, we’ll just cover the one that our experience shows is the most important.

First and foremost – markets have a habit of categorizing things to make it easy to find, compare and buy what it classes as similar products. If they didn’t can you imagine how many unique categories vendors would invent to make their products special. Just think about how difficult it would be to buy something as simple as a packet of clothes washing powder, or is it liquid, or tabs, or liquitabs or whatever comes next.

See what I mean and that’s only for one tiny category.

Now for the kicker. The washing powder marketers have gone to all that effort to invent a new product category so their products are different, shiny and exciting. So what do the supermarkets do? They stack them all in the same aisle as the traditional washing powder.

Why, because that is where the washing powders and detergents all belong and where we expect them all to be, no matter how much the manufacturers and their marketing teams might complain.

If they were in a different aisle you would have to go and look for it. Have you got the time for that and can you be bothered? Me neither.

So what has this to do with Triple X or your products? Well we cover this in the book, which is just about ready to publish, but it boils down to making your products easy to find, compare and choose for your customers. 

If you don't the chances are you won't make the sales you want.

Of course you could completely ignore all of this and go down the ‘educate the market’ road but you’ll probably need some pretty deep pockets for that.

By Tim Sandford