Archives for December 2010

Many people often have an idea of a business that they may be interested in starting. The next step should be to then do some initial research on that business and find out whether it is worth doing. If you have picked a good niche market or industry, it should have the following characteristics already:

• A Market that Can Pay for Your Product
• The Product You Offer is Valuable to Them
• There are opportunities for recurring revenue
• The Market is Big Enough to Support Your Product

Steps to Research Your Niche Industry

1. Do some competitive research – What are your competitors doing for this niche industry. Hopefully there aren’t many in your niche industry yet but if they are there, try to find out what works for them. If no one is offerring the same product or service, try to find out what other companies who sell to the same niche are doing for their product or service. (Note: Keep note of these companies as they may be able to help resell your your product.)
2. Find Out What Marketing Works Best for Them – Some niche industries are most effectively marketed to through referrals, while others can be reached most effectively through direct response in related publications, and still others might respond to more mass media like TV or radio. Once you know this, you can start researching those media for ads that have worked well for other companies. Ads that have run for long periods of times are often ones that are the most successful.
3. Understand the Economics of the Industry – In an industry like dentistry, there are some interesting economics going on. Preventive dentistry is far less profitable than elective procedures like cosmetic dentistry. Therefore, most dental practices are more interested in increasing their cosmetic cases. If you know this, you can focus your product and advertising more on cosmetic dentistry and get a higher response on your marketing, provide more value for your clients, and gain more profit per unit sold.
4. Is Your Product a Good Fit? – Play devil’s advocate here. If your product doesn’t exist yet, is there a reason why? Have other’s tried it and failed already? Maybe you have a great idea of how to reach potential new car buyers through the newspaper but your target market (high end car dealers) prefers for a little more high-end marketing?

Doing the Research of your Niche Industry is one of the more “abstract” steps in starting a business. There is not as much of an end goal like creating a piece of advertising or testing out your product. It’s tough to know what to look for when doing your research but the more you know about the industry that you’re targeting and the state of your potential competitors, the more successful you will be in targeting that niche market.

“The Termite Effect” refers to the impact that many common business mistakes have on businesses, entrepreneurial ventures, management teams and on the careers of sales professionals.

As a business coach, I noticed that the damage done by many of my clients’ mistakes were going unseen for months or even years… just like the effects termites can have on your home. After all, termites never sleep, they just keep eating. Similarly, until corrective action is taken, the deleterious effects of the most common business mistakes on your business never stop. In both cases, at first the harm is not noticeable but over time as the damage grows more and more extensive, the foundation of your home or your business begins to collapse.

Termites live in subterranean environments because they do not like being exposed to light. Many of the most common business mistakes such as poor organization or resistance to change are often ignored or hidden, however, exposing them to the light (recognizing that they exist) is the first step toward avoiding them in the future or repairing those that you have already made.

Some of the other common business mistakes that I have noticed include:

• Lack of understanding your company’s financial statements – Think of your financial statements as the blood work of your business. They can tell you a lot about what is going on below the surface.
• Inability to identify what success looks like – In order to consider yourself a “success”, can you articulate where you want your business to be one, three or five years from now? Many business owners and entrepreneurs struggle with this question.
• Living a reactive existence rather than a proactive one – How much time do you spend planning? Without it, you invariably will “just go with the flow”. You cannot survive long in a reactive environment.
• Lack of measuring results – What do you measure in your business? If you cannot rattle off 3-5 key performance indicators off the top of your head, you are destined for failure. Remember: “what you measure will improve” and vice versa, “what you do NOT measure will….. “
• Not generating enough leads – Marketing is to your business what petrol is to your car; neither can run without it. Do not neglect your marketing efforts.
• Poor work/life balance – This mistake plagues most business owners regardless of how good their intentions are. They must make a concerted effort to work less and/or say “no” more to the multitude of responsibilities that their business thrusts at them, otherwise, they will risk burnout.
• Not understanding your strengths or weaknesses – If you do not know yourself, you will struggle when it comes time to run your own business. You goal should be to spend the majority of your working hours performing those task and activities that you are uniquely gifted in and enjoy doing. Surround yourself with people whose unique gifts are performing those tasks in which you either hate doing or are terrible at.
• Lack of delegation. This is a critical mistake for most entrepreneurs because they have a difficult time giving up control. After all, no one is going to perform the tasks as well as them. Delegation is a requirement of all successful entrepreneurs for sanity and efficiency purposes.