In order to succeed in any business, it’s critical to map out needs and wants of customers and prospects in order develop a business focused on meeting the customer experience expectations of its audience.
The biggest problem with starting a new business is that, by definition, it is new. An entrepreneur venturing into a new industry cannot know what is around every dark corner, especially if these shadows have never been explored. To steer away from mistakes that can derail a great business idea, follow a few tried and true suggestions.
Learn to Sell to the Right Customers
American businessman James Cash Penney claimed that a human’s very existence is selling, that we are all salespeople. No matter what type of company you are starting, whether it is cookies or writing services, you will need to wear the hat of a salesperson. Before you launch into your one great passion, takes some baby steps. Use a simple business model like Amway to test your metal in a mini-venture. Use this platform to hone your skills and make your mistakes. When you are comfortable in the role of a salesperson, then you can move on to your new business.
The art of selling means understanding the essential needs and wants of your customers and being able to carefully plan and pitch your offerings and services in a way that is meaningful and attractive to potential customers. Effective customer experience only happens when you understand the right sales process that will attract customers.
Have a Customer-Focused Business Plan
To give concrete form to an intangible desire, author Napoleon Hill recommends reducing your plans to writing. This is done with a business plan. In all honesty, you may never look at your plan again, but the simple act of going through the process takes your concept and makes it into something real. It allows you to visualize potential pitfalls and place safeguards to avoid them.
The Small Business Administration has a wealth of information on business planning, including templates for easy creation. As part of the business plan, you should create a marketing plan that helps guide you and your business in developing lasting relationships with customers.
Use the Right Metrics
The business and marketing plans have estimates on budget and advertising penetration. To test the success of these approximations, you need to have testable metrics for marketing and industry-established ratios for financials. Google Analytics offers a robust package for measuring web presence in advertising. This tool lets you know how many times a person looked at your web portals, like your site or Facebook page, as well as how long they read and where they ended up.
Know Your Ratios
Financial ratios are specific percentages that help assess the health of the business. There are more than a dozen ratios that are commonly used. Typically liquidity ratios are some of the most telling, since they show how much in assets the business has to cover the liabilities. Other ratio categories include turnover, profitability and leverage, which are important for companies with inventory, net profits and level of debt, respectively.
Create Customer-Positive Debt
Debt is not bad and, in many cases, can be good. Marketing and customer service are often areas that are underfunded in a new business. While often seen as just a cost of doing business, some business costs are critical to enhancing your ability to effectively connect with customers and deliver on the needs and wants of your customer base. The investment in these customer-affecting areas are really customer-positive debt that businesses takes on. Without it, your ability to create and keep customers is greatly hampered.
As your business grows, use the assets that you develop as leverage to expand these customer-positive areas. It is important to maintain money in the bank to keep your liquidity ratios high and have enough cash flow to keep the business going. Leveraged debt is easier on your cash flow and better for the overall health of the company. Use a return on investment ratio to analyze how well your debt is working for you.