Launching a Business? Don’t Skip This One Thing
When you’re launching a new business, talking to people is an essential part of putting together your business plan. If you write your plan in a vacuum, you’ll make critical errors that could sink your business just as it’s getting started — something completely avoidable just by doing some legwork ahead of time.
Talk to people!
To get the critical real-world data needed to build a thriving business, you have to get out of your office (or home) and talk with 3 key groups of people: your potential customers, your competitors and potential suppliers. Each of these groups has valuable information that will ensure your business plan is a blueprint that’s firmly grounded in the realities of your market.
The more people you talk to, the better the information you’ll have to build the strongest possible foundation for your business — one that sets you up for success.
But first, it helps to know why you’re talking to them in the first place. Here’s what you need to know.
1. Talking to potential customers.
In order for your business to succeed, you have to have an in-depth understanding of what makes your ideal customers tick. You have to be able to know who they are, stand in their shoes and understand how they think. And there’s no better way to do this than by talking to them and hearing what they say in their own words.
a. Find out what they need.
Talking to potential customers is how you find out what they’re looking for, where they feel underserved, why they choose one company’s offerings over another and what they’re willing to spend to get what they need. It’s how you learn not only what they’re struggling with and what frustrates them, but what makes them do a happy dance. Ultimately, this is how you find out the real motivations behind why they buy (or don’t) and what influences their decisions.
b. It’s all theoretical, until you talk to them.
Until you talk to your target customers, your business plan will only be based on guesses and assumptions of what your customers are thinking and how they will behave. But when you talk to people — either by calling them on the phone or talking to them in person — you can find out for sure what they really think. You can discover market opportunities and ways to position yourself for a competitive advantage. More importantly, you can find out if your solutions have a good chance of working — or not — before your business opens its doors.
c. Observe them.
You can also get a lot of valuable information simply by observing businesses that are similar to yours. Pay attention to what their customers do and say. You can do this by visiting brick-and-mortar stores, watching people going in and out, (discreetly) listening in on customer conversations or paying attention to what they look at on the shelves versus what they actually buy. You can even walk up to them and start a conversation, either in-store or outside. Finally, you can also “observe” through social media, noting comments and feedback.
2. Talking to competitors.
Guess what? You can dial the phone right now, call your competitors and ask them questions that can help your own business-to-be. You can ask them where they source their supplies. Or how long it took them to get their business off the ground. You can even ask them who they use for payroll or for their liability insurance.
a. They’re people too.
Your competitors remember what it was like when they started. They have empathy. They were once where you are right now, facing all the hard and scary parts on their own. Surprisingly, most of them want to help. It’s easy to picture competitors as adversaries who will feel threatened by your questions, but in my experience, 9 times out of 10 that simply isn’t the case. They’re usually very generous with their time and advice.
b. Game-changing details from the trenches.
So get in touch and ask your competitors those crucial questions. Whenever I’ve advised my clients to do this, they’ve learned things that made a real difference in how they built their business. They were able to learn game-changing details on the nitty-gritty aspects of what to expect at the beginning and down the road, as well as a lot of valuable inside information on tools, resources and suppliers that are part of running their kind of business.
c. There is no downside.
Yes, it’s true that not everyone you contact will agree to answer your questions. Some competitors may refuse outright. But you’d be surprised how many will be more than happy to share their knowledge and experience with you.
And the ones who don’t? Just thank them nicely and move on. There’s really no downside. As my father always says, “You don’t ask, you don’t get.” Once you have a few helpful conversations under your belt, it doesn’t feel nearly as intimidating to reach out to other competitors.
3. Talking to suppliers.
Getting in touch with potential suppliers and vendors is just as important as talking to customers — what you learn can make a material difference in how the early stages of your business play out.
Talking to them shows you:
a. What things actually cost.
In reality, it’s hard to guess what supplies and services will actually cost. What features are included? What’s considered extra? The answers (and related costs) can vary, sometimes by a lot. The more vendors you talk to, the more your choices and the better your financial assumptions.
For example, by contacting only one internet service provider, you may be assuming that the price you’re quoted is typical. But if you call around, you might discover that other companies have better deals or are willing to price match or bundle services. The same goes for suppliers of physical goods your company might need — anything from equipment to ingredients.
When it comes to leasing physical space for your business, until you talk to leasing agents you won’t know if you’ll be responsible for additional costs like, say, garbage pickup. And you won’t know whether you’re responsible for buildout costs — your landlord may cover some of them or none of them. These little details can make the difference between accurate financial projections and, well, disaster. And running short on cash is the quickest way for your business to fail. That’s why you have to get accurate, real-world pricing on everything.
Knowledge is power.
b. Who you want to do business with.
Calling around can also give you a better idea of who you want to do business with. You might find out that one web hosting company offers technical support that’s friendly, easy to reach and easy to understand versus another that has long hold times, with people who are poorly trained and unhelpful. You can increase your chances of selecting vendors that provide great service at a fair price by doing your homework — which means investigating to multiple options and starting conversations (and building relationships!).
Speaking of relationships, never underestimate the value of a strong working relationship with a great supplier or vendor. Over time, you may develop the kind of relationship that allows you to ask for favorable payment terms, or volume discounts, or in some cases, even partnering opportunities in the future. Especially strong relationships may even lead to funding opportunities for your business! Developing those relationships now can pay big dividends down the road.
Talking to people isn’t just a good idea – it’s essential.
Your business plan is only as strong as the information it’s based on. The more people you talk to, the more invaluable details you’ll be able to incorporate into your plan.
And if you’re at all hesitant about talking to people, remember that it gets easier over time. As with anything in life, there are helpful people and not-so-helpful people; but the former far outnumber the latter.
And remember: “You don’t ask, you don’t get.”
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