A Few Tips to Start up Small Businesses
I have been coming across a few solid products unfortunately not taking off due to a few basic marketing challenges. Thought I would pen these down for anyone interested as I have been working in marketing for almost a decade now and here are a few learnings.
- Costing – get your basic costing structure right. Your price should be marked as a percentage above your costing taking into account your overheads, salaries and an amount for profit and discounts. If your business is volume driven you can opt for a lower margin. If it is value driven, then opt for a higher margin. Having said this, you have to be practical. You can’t put insanely expensive ingredients into something and sell it at a ridiculous price out of your backyard. Branding and marketing matter. Hence why you will pay 50 bucks for coffee in a saivara kade and 600 at a café.
- Budgets and targets. Any company has a targeted budget and an actual and these are monitored almost weekly, some daily if their targets are daily targets. No matter how small you are, do a monthly budget so that you know how much you need to keep your business afloat and profitable. Monitor it daily at first and then weekly as you grow. If you are faltering in your targets, you need to think of ways to up your sales. Ask any Sales team, the lengths they go to, to meet their targets. I am not talking the underhanded stuff. But how they devise ways and methods.
- Put your earnings into a separate account. The minute your money is in your personal account, the temptation to spend it is great. Don’t mix business with pleasure. Give yourself a realistic salary and take only that. Keep the business dealings separate. Speak to your bank and build a relationship with them so that if required in the future, you can look at loan facilities.
- Any successful business is founded on solid relationships between suppliers, distributors, marketers etc. It is a network built on trust and mutual respect. These keep you going and are your support system when the shit hits the fan. Even if it’s the grocery kade mudalali (you have no idea how powerful they are – ask any FMCG Sales person) or a small distributor, the connections you build up, matter. So you can work on credit periods with them for slower months and ensure your supply chain is running.
- Your customer. You have to know your customers. Talk to them, connect with them. And ask what THEY want. Your target market is decided by the ones who eventually keep your sales going. Don’t be stuck trying to feed them what you think is best. If you are selling cake and they want chocolate and not salted caramel, listen to them. You can introduce new flavours but they may not be a best seller. At a stage when you have grown, perhaps you can expand and experiment. But initially focus on giving what customers want. And be out there with your customer. Especially if you don’t have a physical store, you need to connect with them physically or via personal messages. These go a long way.
- Stop listening to your friends only. Your close friends are NOT your customers. They are going to buy your products to support you and may or may not like them. Getting their feedback is one thing (unless they are professionals in the field you are selling). But strangers will give you far more accurate and honest opinions. Stop massaging your ego and go out there and meet the people who buy your products coz they choose to, not coz they know you.
- Play to your strengths. If you are a finance person, then focus on that area and let someone else handle the more creative part. Where a lot of people go wrong is where the top dog is trying to be the creative director coz of power play. Know your weaknesses and let competent people handle those areas. A company is only as successful as its team work.
- Keep dangling carrots. Consumers are suckers for new stuff, promotions, discounts, packaging etc. Ever wonder why the supermarkets keep offering deals? Coz they are pulling you into a trap. Not coz they love you. Keep customers titillated. Introduce seasonal products. Do limited edition products. Package things differently and offer combo deals. Depending on how you position yourself, you need to decide which route you will take – discount route or value added route. No one expects a high end brand to be discounted. But a value added combo deal- that would work.
- Packaging matters. Your customer’s first encounter with your product is the packaging. If it’s shoddy and non existent, it won’t create anything. Colours you use matter. It doesn’t need to be fancy or elaborate. Just something simple and even personalized notes make a world of difference (you can print a generic message and address it).
- Be consistent. Your quality must never waver. People will pay more for something that is of good quality. But if you start cutting corners they will switch to another product.
- Build a brand, not a product. Customers are loyal to brands and will seek certain products. They connect with stories and with a face to the name. No matter how good your product is, if someone comes with a better product, you are out. But if they know your brand, they will associate it with that product and keep looking for it. It’s like how we want Elephant House Lingus, Lindt Chocolate and Anchor Butter.
- Digital is your window to your market and to the world. Spend on strategic brand awareness and push where your customers are. Don’t dismiss the online sphere as that is where everyone is moving to. No point doing newspaper articles only if you are dead online. And social media is just one tiny aspect of digital so don’t assume Instagram and Facebook is the only way to go.
- Look for investment partners. One of the ways to grow is to have strategic investment partnerships that can help you grow your brand. Don’t be scared that you will lose control. You can tailor your agreement to not compromise fundamentals you believe in. But if you don’t get a boost, it’s very difficult to grow.
- Keep learning. You will only get better as you keep learning and growing. Mistakes will happen but what is important is to learn from the mistake.
- BHAG – have Big Hairy Ambitious Goals. You can’t aim for the stars if you are looking at the trees. People who are big today are people who believed they could be that. Work towards a bigger picture but make sure all your actions align that way. If you don’t believe in yourself, no one else will 🙂