Changing the Odds – 95% Failure to 95% Success!
I know you’ve heard all the horror stories about how most businesses fail.
With internet businesses coming of age, we’re hearing how most of them are failing too. I’ve heard figures as high as 95% are failures. Yikes! Those kind of figures make the bad job market look like a gold mine.
I don’t know how accurate those figures really are. What I do know is that way too many people are starting businesses with fairy dust in their eyes.
The progression usually goes something like this…some event, product or service impacts their life in a personal way and they want to share it with others so they decide to build a business around it. That’s how I got into hospice work and grief counseling, and it’s not necessarily a bad thing to do.
The problem with this approach is it doesn’t take into account what people really want and what they’re willing to pay for, and without a strong customer base your business cannot possibly succeed. Period. No market. No sales. No profit. No business.
I see so many people starting a business without any real sense of what the market is like or whether there even is a market. They start with all of their hopes and dreams tied up in an idea that is doomed to failure no matter what they do to market it.
Most of these people aren’t business people by training. Most of them aren’t natural marketers. Many find the idea of sales abhorrent. As unskilled as many of these folks are, their lack of skill is not the reason they fail.
The skills of business, marketing and sales can be learned and/or outsourced. There is no reason for a business to fail because of a lack of skill. Most of these folks know that so they spend a ton of money on developing their skills or hiring people to do the work for them.
And their businesses still fail.
Why? Because they’re in a bad market. Through all that learning and coaching and hiring, nobody ever tells them, they’re just in a bad market. I hate telling people they’re in a bad market too, but really it’s the kinder and more ethical thing to do, don’t you think?
And that is why market research is the most important data you can ever collect. In the entire life of your business, it is the single most important thing you will ever do.
With good research you eliminate the dud markets and identify ones that may have potential. Follow up on the good potential markets with some down and dirty testing, and you can identify a niche market in which you are very likely to succeed.
By doing good research and testing, you can pretty much flip that 95% failure rate on it’s head, turning it into a 95% chance for success.
Personally, I hate taking risks, but those kind of odds I can live with. How about you?
Next up…what information you need in order to differentiate a good market from a bad market.