Learn how to avoid costly mistakes that can ruin your business.
In running a business, no amount of preparation can help you avoid all mistakes. But it’s important to at least avoid the common mistakes businesses make and save yourself some heartache.
Let me tell you about Caroline, a good friend who sent me a message one evening about how she lost most of her capital in a business she started. The irony is that Caroline is a really smart lady who believed she was doing everything right until the very end when she saw her hard work crumble before her eyes. What did she do wrong? Statistic says 8 out of 10 businesses started in Nigeria will fail. Many of the businesses fail because they do nothing to avoid some important mistakes at the initial stage of their business, then when the results of the mistakes start to show, they do nothing to correct it.
Let’s examine some of these mistakes businesses make and see how you can avoid them.
1. YOU DON’T KNOW WHO YOUR CUSTOMERS ARE
It seems very basic when you think about it. No one starts a business without thinking about customers, but you’re very hungry for customers when your business starts that you don’t care about target customers, any customer at all would do. This is a fatal mistake businesses make. As you grow it is important to define who your target customers are or should be. Think of it this way; if you know who you want to sell to, it’s easier to find them and target them with your marketing strategy. For example, if you sell baby clothes you probably don’t mind selling to anyone who wants to buy, but it would not be wise to think single people or students are a big part of your target customers. The same logic applies to sell anything, you have to know people who need your products and then target them. Your ideal customer is the person who gets exactly what he wants from you, someone who derives satisfaction from what you offer him and advertising to the wrong audience is like drumming a fine beat to a group of deaf people, If some of them should dance, they only do so to encourage you, they aren’t feeling your beat.
HOW DO YOU DEFINE YOUR CUSTOMERS?
- Make yourself your first customer. Think of what value your business adds, what problems your business solves, why people should buy from you instead of others… now ask yourself, what group of persons face the problems you want to solve? Who are the people buying from your competitors?
- Build a customer profile: A CP is a description of your ideal customer based on hobbies, location, age, occupation, economic power and any other variable that matters to your business. It takes a bit of research to do this, so talk to a group of people who are most receptive to your products/services and build a buyer persona from them. Having a customer profile makes it easier to market to the right group.
- Identify your present best customers: your best customers are the best, not only because they keep coming back, but because they are getting something from you in return – satisfaction from the services you offer. Go find people who have the same wants as your best customers, they are yours to have for keeps.
REMEMBER : Your ideal customer is the person who gets exactly what he wants from you, someone who derives satisfaction from what you offer him.
YOU SELL WHAT YOU THINK YOUR CUSTOMERS WANT, NOT WHAT THEY REALLY WANT
People don’t buy from you based on your perception of what they want, the first thing that attracts customers to you is if you have what they’re looking for. So when designing your product, don’t make it based on what you think is reasonable or what you think your customers want, make it based on what your research shows that your customers want. This advice applies to you if you sell physical wares or offer services, both goods and services are examples of products people pay good money for.
WHAT IS A PRODUCT:
A product is the solution you offer to someone who is faced with a problem.
HOW TO KNOW WHAT YOU CUSTOMERS WANT
- Ask them WHY they buy the product (know their problem and lead from there)
- Ask your customer what wish they could have: A lot of times customers don’t know exactly what they want, all they have is an idea. Yours is to work with the idea and create a product that grants their wish. How did the first automobiles come to existence? Someone simply wanted faster horses that don’t have to pass so many feces or fall sick. The “faster horse” that was needed is an automobile. Now vehicles have come a long way from that “faster horse” and what has been constant is that customers wished for more while car manufacturers granted those wishes; from more speed to more comfort to better safety features and luxury. If you can figure out what your customers wish for, you can satisfy them with a product.
- Know how your product helps your customer’s business: Your business grows when your customers’ business grows, so look out for opportunities to help your customers make more money with fewer hassles. When you do this, you grow loyal customers who will always appreciate your saving grace. An example is the RECHARGE CARD business in Nigeria. Many years ago, almost all voucher cards are hard paper cards that required extra care to scratch so you don’t scratch off the recharge PIN, but scratching off some numbers was inevitable and that proved to be a problem for recharge card sellers. The telecommunication companies started to solve the problem by introducing ordinary paper cards sealed with staple pins. The new vouchers were easy to use and gave fewer problems and that pleased the card sellers. Did MTN,GLO and Vmobile stop there? NO! they made the life of the card seller even easier by allowing them to print these vouchers themselves and that was a stroke that made the business popular. The point here is that the telecommunication companies helped their customers solve some problems, which then led to an increase in their own revenues.
- ASK A SMALL GROUP: Did you know that many of the movies you watch actually have multiple endings? I mean that the producers actually filmed different endings and showed it to a small group so they can choose the most liked ending. Iyanya’s kukere was first played to a group of ladies in a car before being released. You get the point.
REMEMBER: IF YOUR CUSTOMERS’ BUSINESSES RUN SMOOTHLY, YOURS WILL GROW TOO. DON’T NEGLECT YOUR CUSTOMERS, INSTEAD TRY TO SOLVE SOME OF THEIR PROBLEMS. IGNORING CUSTOMERS IS ONE OF THE WORST MISTAKES BUSINESSES MAKE.
3. DON’T TRY TO CREATE THE PERFECT PRODUCT
You cannot create a perfect product. Instead, focus on creating a fabulous product and improve it as it goes. You can’t say your product is perfect until a lot of people use it and give feedback, and when that happens you’ll have a lot to improve. So don’t wait to make the perfect product, make a good one and keep it going, your customer’s behavior will help you build it. Think of all your favorite products and notice how they have consistently been improved over the years, that’s how to build a product. I rank this as of of the unforgivable mistakes businessess make because we are imperfect so no one expects a perfect product from you.
ASK YOURSELF: WHY DO APPS GET IMPROVED SO OFTEN?
Are you wondering what the other mistakes businesses make could be? Here goes the rest…
4. MAKING A PRODUCT FOR EVERYONE
If there’s a universal product, I’ve not seen it. Even if two people sell the same thing, they usually target different people with such products. Ankara fabric has grades, Peak Milk or Cowbell? Iphone or Tecno or LG? Commercial airline or private jet? Young or old? Modern or classic? Masculine or feminine? Fun or somber? Your product should have a focus, you can’t make a product for everyone. If Apple can’t, you can’t. Making a product for a group is the fastest way to even be relevant, because once people in that focus group identify you and know you, you’ve started. You agree that it’s easier to get the attention of a few people than a large group.
DID YOU KNOW? Cowbell specifically targeted poor people from the start. They did this by making milk available in powder form and in sachets so poor people could afford to buy small quantities without having to worry about preserving it in a fridge since it’s powdered milk. While peak sold to the rich, cowbell saw an untapped market in poor people and took advantage of it, they went further to use the tag “OUR MILK” which gave an identity that has permanently associated them with the majority of Nigerians
5. IGNORING YOUR COMPETITORS
Competition is the beauty of an open market, it is what gives your small business a chance and keep big businesses on their toes. You can beat your competitors or exist side by side with them, the most important thing is not to ignore them. Always strive to be better than others, add an edge to your products, innovate, do everything within the law to endure they don’t beat you, copy them if it’s legal. In business, you either go hard or go down, so do your utmost to not go down. How can you achieve this? Always give your customers what they want/need while offering your competitors’ customers what they don’t have. Here’s a list to guide you;
- Innovate: stay on your toes and constantly add new things to your business. Try to always be the first to do something spectacular.
- Meet the 4 customer needs
- Copy you competition’s ideas and make it better
- Find your competition’s secrets that gives them an advantage over you. For example, where do they get their raw materials from at a cheaper price than you? How come they deliver so fast? Who is the employee in charge of their marketing?
- Help your competitor, that way you control them indirectly.
THE 4 THINGS YOUR CUSTOMERS WANT: 1. Good service 2. Fair price 3. Show them you value them 4. Good product
5 OTHER MISTAKES BUSINESSES MAKE
- Failure to keep records
- Reluctance to create a brand
- Failure to engage professionals
- Focusing on too many things at a time
- Reluctance to spend on marketing
MISTAKES BUSINESSES MAKE: The summary
I know that running a business is a hard task and mistakes are inevitable in business, but yours shouldn’t be any of the 5 top mistakes businesses make I have outlined here. Another important mistake businesses make is not having an online presence, I’ll talk about that in my next post. Have you subscribed to be among to those to get the post first? Subscribe here, it’s free.
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