So, you’ve had a lightning bolt of inspiration for a new product or service that you think could make your customers’ lives better, cheaper, or easier. Congratulations! Deciding to start a new company is a huge and exciting step in your career. However, before you jump headlong into your new venture, you’ll want to make sure that you know how to start a small business the right way to set yourself up for future success. After all, about half of new businesses close within their first five years. The difference between those companies and the ones who stay open for years to come is preparation. According to The Hartford, you should follow the tips below to safeguard yourself against failure.
Know What Your Customer Needs
Your product should do at least one of three things:
- Solve a problem that your customer faces and make their life easier
- Save your customer money on something they already buy
- Add enjoyment to your customer’s life in a unique way that no other product can
The Hartford tells the story of the jeweler who invented a bread slicer after hearing his customer complain about the inconvenience of having to do it herself. He identified a problem that she had and dreamed up a solution to remove one of her everyday stressors.
Alternatively, if you can find a way to offer a product at a lower price point than the options currently available, customers looking for a way to save money may be interested in what you’re selling.
You can also add value by making your customer’s life more enjoyable. Some examples of this include new hobby items, stylish products such as decorations, clothing, or more aesthetically pleasing versions of everyday items (think kitchen essentials, shower products, etc.), and toys.
Know Your Customer
In order to effectively sell to your customer, you need to know a lot about them. Define your ideal buyer and conduct market research on how what that person like and dislikes, what their pain points are, and how they make their purchasing decisions. Learn how to talk to them in a way that will resonate. What is their tone like when speaking to their friends or family? What colloquialisms do they use? Help them to identify with your brand messaging and recognize your product as something that will fit into their lifestyle. Knowing who you’re marketing TO allows you to create more detailed customer segments to target in your advertising.
Do Your Research
Conduct extensive market research on the products already available in your niche and how you can improve on them. You can create a focus group with consumers who fit into your ideal customer profile and ask them what they’d like to see in a product like the one you’re creating.
Leverage Your Strengths
Think about what you already know how to do (and do well.) How can you leverage your strengths and bring transferrable skills to your new business? In the case of the inventor of sliced bread, he was able to leverage his familiarity with machinery to create a slicing mechanism that produced consistent results that aligned with the research he did after polling women on the ideal thickness for a slice of bread.
Starting a new venture can be scary, but doing your research on your ideal customer, competitors, and similar existing products can help you to build a company that will stand the test of time and prove to be a valuable addition to the market in your niche.
