Many times, young start-ups complain that the biggest issue they have is getting financing for their businesses. However, when looked at critically, this may not always be the case. Often, the actual problem is finding customers.
Why is this?
Well, the money that start-ups require is often used in advertising the young business to get customers. This means that a business that can easily get customers would not have too much of a problem starting out.
Get the Customers Before You Start Your Business
Now that you've realized your problem is actually getting customers rather than having capital, why not seek them out first even before you start your business.
Is that even possible? Yes it is.
1. Strategic Use of Online Platforms
The advent of online platforms, particularly social media sites, has created a new and incredibly huge opportunity for start-ups to gain traction and become established remarkably fast. However, many entrepreneurs still hold on to old methods of doing business; hence, they fail to take full advantage of the new opportunities right before their eyes.
In the old way of doing business, you would first establish your business, then start marketing it through online and offline platforms. However, due to the incredibly easily accessible online platforms, smart entrepreneurs have learned that they can actually create a huge following in online sites which would make it so much easier to sell when they do launch their businesses.
Online platforms, such as social networking sites, forums and websites/ blogs, are excellent tools.
i. No guesswork or paying for costly surveys - direct access to potential clients
Social networking sites like Facebook, Twitter and LinkedIn give you direct access to the people who you wish to sell to. Apart from identifying their needs and wants through interactions with them, you would also have the opportunity for closer engagement with them.
Facebook, in particular, is an awesome site through which you can actually identify people who need exactly what you have to sell. This will prove useful even after you’ve started your business. Here’s a strategy you can use to achieve such an objective:
- Facebook has countless groups solely dedicated to business interactions, trade and networking (in Kenya, many such groups have the tag “soko”, meaning market).
- As you scroll through the posts in such business groups, you’ll notice that a good number of people will post their interest to buy certain items, apart from the business people trying to sell their wares. The customers are literally begging to buy, but unfortunately their posts often go unnoticed because very few people get notifications of what members are posting in such groups.
- So, if you haven’t already started your business, or you already have, you need to find these customers who are asking to buy. All you have to do is, go to each business group you have joined and click on the “notifications” tab at the top-right part on the group. Then click on “all posts” to get notifications of everything that gets posted on the group.
- The only drawback in getting notifications from many groups is that you’ll be getting pop-up notifications on the left side of your screen. You can get rid of this pop-ups by installing a browser extension called FB Purity.
- Now that you're getting notifications of what people are looking for, you can easily tell what people want. If you haven’t yet decided on what it is you want to sell, you can just as easily start selling the products that people have been inquiring about. That means, you’ll have a ready pool of customers just waiting for what you have.
ii. Create a group/ community with a common goal related to your business
Even if you have no idea about what type of business you would want to start, you can just start an online community based on the type of work you’re currently doing, or whatever else you might think of. You can easily do this through social media, forums or blogs.
With the right strategy, you can generate a large following through these online platforms and establish yourself as an authority in your particular field.
Even if not everyone in the community does buy from you, the large numbers will help create a buzz around your product. They might even promote you, depending on the cohesiveness and engagement you create in such a community.
Moreover, who said you have to wait until you start your business before starting a blog/ website? Why not develop your blog way before you launch your business and build a huge subscriber list from which you’re sure to get paying clients.
Online platforms aren’t the only way to get clients even before you start your business.
2. Crowdfund It - Turn the Concept of Business on Its Head
Well, that’s what happened before crowdfunding came into the picture.
i. You're marketing and selling nothing, but getting everything
The traditional concept of doing business would always end with the customer paying for a product that the businessman has spent tones of cash producing. The Crowdfund concept ends with the businessman producing a product that the customer paid for even before it was ever produced.
Just by this simple inverted process, you would have solved the key problem faced by many businesses: getting a firm commitment from prospective clients.
When you visit sites like Kickstarter, GoFundMe, Indiegogo, among others, you see businesses that are literally turning the concept of doing business on it’s head.
If you aren’t sure about how to select the best crowdfunding site, you can make use of this wonderful cheat-sheet.
ii. Proving the viability of your business, beforehand
There’s only one catch: your business idea has to be powerful enough to elicit commitment from your target clientèle. This isn't such a bad thing, since it will force you to critically evaluate the viability of your ideas (if you’ve been in business for a while, you know too well that entrepreneurs can fall in love with their ideas, which prevents them from seeing so many obvious flaws).
Even established companies consider it an important component in establishing the viability of upcoming products. This is because, regardless of the number of marketing experts and consultants they have, nothing can ever replace the customers’ decision.
Moreover, if you carried out a survey to get your target market's opinions concerning an upcoming product, you can get a positive feedback that never actually translates to real, tangible profits. What you need, instead, is customers putting their money where their mouth is: crowdfund it. This will automatically lock in your first group of clients.
iii. Failure in crowdfunding is still success
This concept has made the business setup process so revolutionary that you would even consider a failed crowdfund project a success. If you thought you could never have your pie and eat it, then you haven’t seen anything yet.
How can crowdfunding failure be viewed as a success?
Well, if you spend millions of dollars developing a product that completely flops, you would have failed big time. But then, if you started a crowdfunding project without spending all those millions of dollars and it failed, you would have prevented a huge financial loss. That's definitely a success.
4. Create a Source of Income for Potential Clients
Your potential market might not be in a position to afford what you intend to sell. Therefore, you can device a plan to help them make money from their businesses, so they can have cash to buy what you sell.
For instance, you might be selling animal feeds, but farmers don’t have cash because they can't sell their milk. Therefore, you can help them find a market for their produce, while selling your feeds to them (perhaps, set up an arrangement to get a commission on the sales they make through your assistance).
5. Start a Transition Business
This is a very simple strategy that many people have utilized in employment. You simply start off with a lower grade job or a job in a smaller company, which will give you entry into your target career/ company, or at least pay your bills as you try to get into your chosen career.
So, why not apply the same strategy in business?
You might find that the business venture you wish to start would require substantial capital, or a level of expertise that’s beyond your capacity. Most of all, you might not even have access to your target clientèle, who might be extremely picky in the type of businesses they chose to work with.
To counter these huge barriers to entry, you can opt for a transition business.
You can start a business closely related to your intended venture – but one that’s much easier to start and run – as you work on actualizing your end goal. Indeed, you can even begin with just any easy-to-start business that will help pay your bills during that transition period.
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