Will your great new idea succeed in this slow economy? With many existing SMEs struggling to survive due to a lack of affordable finance, slow demand and an unfavourable business environment of high tariffs, intermittent utilities supply and competition from cheap Chinese and South African imports, is there a way of knowing if your new business can grow and be profitable?
Some may think “you will never know until you try”, so you should just go ahead and do it. But there are some ways to prepare yourself before actually launching a new business. Here are six things that if you do, will enhance the chances of your new business succeeding.
Understand your industry
The first thing to do when thinking of starting a business is to get to know your industry. Or, if you haven’t yet decided on a specific idea, you should find an industry that fits your talents, knowledge and skills. Our research entitled The Hottest Businesses You Can Start in Zimbabwe Right Now , which appears in part on my blog (http://chichonip.wordpress.com) and also on the SME Business Link February CD, shows that there are a lot of industries with great potential for new businesses, including technology, innovative selling and personal services. There is no shortage of opportunities in Zimbabwe, even for people with a small capital budget.
When focusing on your chosen industry, be sure to research it. Talk to industry veterans, read industry journals, seek information from industry associations and business experts. You might also make valuable contacts while doing the research. With adequate knowledge, you will reduce surprises that can sink your new venture.
Understand the competition
One of the mistakes new entrepreneurs make is to under-estimate the competition. The truth is, there is no profitable business that does not have competition. Study the competition, visit their businesses and their websites, examine their products and services. To succeed in business, you must have a strategy amidst the competition. For example, you could differentiate your offering and make your business unique, or offer better value or unbeatable service.
Have a plan
You definitely need a plan, because failing to plan is planning to fail. A business plan will provide guidance on where you want to go with your business and how you plan to get there. It will also provide milestones or targets to help you stay on the critical path to your goals. Without a plan, you will be groping in the dark and you will greatly disadvantage yourself. Business planning resources are available for downloading on my blog. We also hold regular business plan writing classes for those who wish to learn how to do it themselves. A business plan will also help when you need to raise finance, attract investors or even attract key staff or directors for your growing business.
Understand the importance of marketing
Most entrepreneurs, especially those from a technical background, do not understand the importance of marketing. Some assume that because their product or service is so good, people will naturally queue up to buy it. In real life, many firms with excellent goods and services have failed because of a poor marketing strategy.
An entrepreneur must understand marketing and selling. One piece of advice I like is from the book Cold Calling Is A Waste Of Time: Sales Success In The Information Age by Frank Rambauskas. He says to “never waste time with a prospect who has no need for your product; cannot afford your product; has just bought from the competition or will only buy in the distant future.” Knowing such rules of marketing will help you exert your efforts on strategies that work.
Seek advice from friends and mentors
The key skills of business are not written in books and cannot be learned in a class. They are imparted, person to person, by those who have done it and succeeded in the field. A mentor is someone who will help you with expertise and business advice, motivate you, help you bolster your networking efforts or help you balance your work and life relationship. You can look for mentors among family, friends, the business community, the academic community or people from your church. Because he has already experienced the challenges facing businesses, a mentor will impart such knowledge to you so that you do not necessarily have to learn from the school of hard-knocks, that is, personal experience. Pick a mentor that you are comfortable working with, and who is accessible and approachable when needed.
Do a test run
Testing your product or service is a good way to learn if customers want it. Their feedback will help you improve your offering and meet their needs more closely. The idea is to get to know your customers more intimately so as to be able to thoroughly satisfy their needs. You could start by testing your product among family, friends and acquaintances. That way you can make necessary corrections and adjustments before your product reaches the general public.
About the Author
Phillip Chichoni is a business planning consultant who works with SMEs and entrepreneurs. His e-mail address is email@example.com.