How Does a Business Work?

The secret to a successful business is the law of supply and demand. Never, ever, forget that.

As a business person, your job is to supply something that is in demand. That is, your job is to find something that people want and to give it to them, and then take their money. This is the heart of every business, whether it is simple or complex.

Btw, this is Part 2 of How to Start An Online Business in Kenya.

Now, I know you can get generic business advice absolutely everywhere so since I do not want to just repeat stuff and because I cannot even begin to cover this topic in totality, I will keep this article short and simple. Basically, I want to speak to that person who is very new to business in an attempt to show the reality of things while not shattering your self belief.

So as I said, doing business means supplying people with something that they need or want and then charging them. I will be straight and point out what I consider to be your biggest weakness: you! The biggest challenge that a new business faces is its founders/owners. Most new business people that I encounter can’t even see how poor of an entrepreneur they are (if you can even begin calling them that – a person with just an idea and some attempt is hardly an entrepreneur). They don’t realize what they lack or that their internal biases and opinions are creating problems in why they can or can’t succeed. My advice to you as a new business owner is try and get the most knowledge possible about running a business and about your chosen industry. Do not be complacent. Keep in mind that most new businesses fail. From Day 1 it is a full out war to make sure that your business succeeds.

Secondly, a new business is usually very short on resources. You often do not have enough money or enough time. You need more money than you have – you see all the places your business can go and you want to try and go in all directions at the same time…

Which leads to focus. New businesses usually have more time constraints than any other business – the new business needs to get its products to the market to prove its worth after all. Unfortunately, new business owners typically fail to focus on what, exactly, they want to sell and thus they therefore take the business in many directions at once – which leads to more time constraints…

Do you know that focusing on a particular niche of an industry has been proven to be more successful, on average, than trying to attack the whole market all at once? The best advice I can give you is to focus on one small part of the industry you want to do business in. You can always grow to all the rest later. This has several advantages:

  • It is cheaper
  • It is easier
  • You face less competition from other businesses
  • You have higher chances of success

Remember how Facebook started? There were already many social networks back then, including the then giant MySpace. Facebook started by focusing only on university students – there was a time you simply could not get a Facebook account unless you were in university/college. By doing this they were able to craft an niche in a huge market while at the same time sowing the seeds that would later lead them to becoming the biggest social network on the Internet.

Think big. But Start small.

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Comments

  1. kacksjeithn says:

    how does it work, what happens to a new business or a new entrepenuor

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