Direct Marketing Article
Mistake-Proofing Your Start-Up Business
By Jay Arthur
With so many people out of work during this recession, it should come as no
surprise that many are thinking about starting their own businesses. And
with so many jobs moving offshore, even people who are still employed might
consider starting a business as a back-up plan. Even if you're the owner of
a successful start-up, the recession might have you worried. So how can
long-standing business owners and first-time entrepreneurs survive these
tough times? There's an easy way to mistake-proof any business - all it
takes is a little time using free online tools and search engine research
Mistake 1: Not Listening to the Voice of the Customer
Most entrepreneurs become enchanted with an idea and pursue it without
thinking it through. They end up with a garage filled with unsalable
merchandise and wonder what went wrong. Others open a store and name it
something cute, like a hair salon named Curl Up And Dye. Or they start an
Internet business but don't bother to understand what customers really want.
Why do they fail? The answer is simple; they didn't understand the "voice of
the customer." Businesses large and small can collect and analyze the voice
of the customer to understand what customers want and how to deliver it.
Toyota uses this to design better cars, and you can use it to design a
better product or service.
First, figure out where the crowds of customers are going and then get in
front of the crowd. In the old days, this would involve lots of market
research, focus groups and money. Today, these answers can be easily found
on the Internet for free with Google's key word tool:
Let's say you want to start a pet food bakery that makes healthy treats for
dogs and cats. Just search Google's keyword tool for “pet bakery" and "pet
food." You'll quickly discover that there are over 500,000 searches a month
for "pet food" but only 8,000 a month for "pet bakery."
There are also 33,000 searches a month for "wellness pet food." From this
one might conclude that "pet food" is too broad and would have to compete
with the big chains; "pet bakery" is too narrow; but "wellness pet food"
might be just the niche to explore because these customers are probably
willing to pay a premium.
Mistake 2: Not Speaking Your Customer's Language
As learned from Mistake 1, customer language can differ from our own. Based
on the search terms above, it might be smarter to name your store "Wellness
Pet Food" (customer language) instead of "Bow Wow Biscuits" (your language)
because that's what the crowd wants. Don't paraphrase (using healthy instead
of wellness); use the customer's exact words. Then check domain name
availability for "wellness-pet-food.com" or "wellness_pet_food.com." If it's
available, register it (try a site such as www.GoDaddy.com); if not, try
adding other key words likely to attract customers such as your location.
Be aware that Google cannot identify compound words, so registering a site
like "WellnessPetFood.com" won't be as effective as "Wellness_Pet_Food.com."
Separate the words with a dash or underscore to improve the site's search
This "get in front of the crowd" strategy also works for service businesses.
Let's say you are a hypnotherapist in Denver with "HypnoDenver.com" as your
site. Many other hypnotherapists in town also have hypnosomething.com as
their site name. What are prospects searching for? They don't want
"hypnosis;" they want to "stop smoking" or "lose weight." Domain names like
"Stop-Smoking-Denver.com" and "Lose-Weight-Denver.com" would be a great
With more than 100 million Internet users in the U.S. and billions of
Internet-capable cell phones, no business can afford to ignore the power of
the web. Even if you don't plan on having a Web site, you will want to own
the domain name to prevent others from using it. And if the business
succeeds locally, having the domain name will make it easy to expand into a
regional, national or global Internet business.
Mistake 3: Not Making Your Product or Service Better, Faster and Cheaper
Too many entrepreneurs try to enter an already crowded market. Search the
Internet for your product or service to find out how many competitors are
out there. When searching for the key words, "pet food Denver," Google finds
726,000 results. "Wellness pet food Denver" yields 149,000 results. If
Google reveals too many competitors, consider another line of business. If
Google reveals no competitors, that can be just as bad. Someone, somewhere
should be offering a similar product or service. If not, there are no
"Pet food" for example, is crowded with low cost super chains. From the
voice of the customer perspective, customers want you to be better, faster
and cheaper than the competition. Are you more innovative? Do you provide
better customer service? Are you more effective and efficient? When
customers can't distinguish one business from another, they default to the
familiar or low cost one. If you're not sure what customers want in a
particular product or service, start by asking your friends, family,
neighbors, and even people on the street. Capture their responses. In
general, are they saying:
"I want better ___(e.g., pet food)."
"I want cheaper ___ (e.g., cell phone service)."
"I want faster ___ (e.g., healthcare, service, delivery, repair, etc.)
Then ask: "What is the competition offering (better, faster or cheaper)?
What can we do differently?" If you can't answer these questions, neither
can your customers.
Mistake 4: Not Testing the Business Concept
Once Google has revealed what customers want (in their language, not yours)
and you've identified a unique value proposition from the voice of the
customer (better, faster or cheaper), it's time to test the concept. For
this, Google offers another powerful tool: Adwords (adwords.google.com).
Google makes its money by putting ads around its search results. Many
entrepreneurs use Adwords to test business and marketing concepts before
they throw a lot of money at it.
Tim Ferriss, bestselling author of "The 4-Hour Workweek," used Adwords to
test various titles for his new book. He bought pay-per-click ads using
various titles (Adwords will alternate them for you) and each ad took the
Internet user to a different Web page about the book. Ferriss let the
"wisdom of crowds" choose the best title for him.
All of this research might take a few weeks and a few hundred dollars, but
it's a lot cheaper than wasting your hard-earned money on a doomed startup.
Mistake 5: Not Bootstrapping the Business
Most people start looking for a "business loan" (3,350,000 Google searches)
before they think about a "business plan" (1,500,000 searches).
Entrepreneurs don't always need a lot of money to get started. If Mrs. Robin
Andrew's third grade class at Pelham Elementary School in Pelham NH can
start The Bow Wow Biscuit Company (www.bowwowbiscuits.org), you can too.
If the business is a product, don't make 10,000 of them. Put up a Web site;
bake a few in your kitchen and sell them online or give away free samples to
test the response. Or make a prototype and get people to try it and provide
feedback. Post-it notes are a classic example of this and look at how
successful they are. When customers start clamoring to buy your products,
then get money to do a production run.
If the business idea is a service, print some business cards (carefully
crafted with the crowd's keywords and phrases) and pass them out at local
This is how entrepreneurs bootstrap businesses that grow. It's also how they
avoid sinking huge sums of money into bad ideas. This "crawl-walk-run"
strategy works as well for new businesses as it does for new babies.
If the first business idea doesn't click, try another one. Walt Disney went
bankrupt several times before succeeding... but then again, he didn't have
Google. Good luck with your start-up!
About the Author:
Jay Arthur, the KnowWare Man, works with companies to fire up their profits
with Lean Six Sigma. Jay is author of "Double Your Profits: Plug the Leaks
in Your Cash Flow." He spent the last 20 years helping organizations
maximize revenue through the "Lean Six Sigma System," a collection of audio,
video, books and software. Jay is also the author of "Lean Six Sigma
Demystified" and the "QI Macros SPC Software" for Excel. To plug the leaks
in your cash flow, sign up for free Lean Six Sigma lessons online at:
http://www.qimacros.com/freestuff.html or call (888) 468-1537.