Building a business is always a gamble, whether you’re still thinking about it, or you’ve already launched and you’re now trying to grow. Here’s how to conquer your fears.
How can I attract more customers?
My business has been operating for eight months and I have a good turnover, but I’m struggling to attract more clients, which I need to grow. How can I attract more customers? — Maurese
At some point, you will hit a sales plateau. Here are three ways to grow sales without dropping the operational ball:
- Bring in a partner that can either take over operations, freeing you up to sell, or sales, freeing you up to focus on operations. You can’t do everything and expect to grow past a certain point.
- Change your business model. The Holy Grail of business is ‘annuity revenue’. Instead of charging your customer R2 000 for software, once-off, charge them R180pm for 12 months. This will impact your cashflow negatively initially but over time your ongoing revenue will grow and create a buffer to fall back on every month.
- Use Facebook and Google for marketing. They are the most focused platforms for reaching your potential customers. If you don’t know how to do it, use a company like Popimedia.
If your sales stops growing, you become vulnerable to shocks. You have no choice. Keep sales growing.
Can I conduct market research without giving out samples?
In 2010 I left my job as a pilot to become a cucumber farmer. I have established a brand name and we have a turnover of R10 million. I want to expand yet still keep the core of the business as cucumbers. I thought of making some cucumber jam. How do I research the jam industry, and can I conduct market research without giving out samples? — Kobela
I have no experience selling jam, or any real-world consumer good. All I can share is the way to do things in the digital world: Research in the absence of sales is theory. In theory there is no difference between theory and practice. In practice, there is.
Forget about samples. The best research method for a start-up is to start selling. Make jam, start selling it. If people buy, make more. If they keep buying, invest in producing what the market wants.
Until you’re 100% sure people will buy, don’t invest in a factory. Make your jam as cheaply as possible. Don’t stress if it’s not a scalable process.
Start making jam in your kitchen. Build a factory later.
How do I overcome my fear of poverty?
I have a full-time job that pays the bills, but a burning vision to go into business. The fear that I won’t be able to sustain my household without my salary is holding me back. I know life is about risk and stepping out of my comfort zone to make it or break it. I know success is all about hard work, which I know I can put in. What do I do? — Terrence
You have a legitimate fear: Poverty. No matter how big your dream, it’s no fun running out of cash. Your challenge is the same for every aspiring entrepreneur trapped by a monthly pay-cheque. It’s even harder if you have a family to support.
A salary is dangerously addictive. With a salary comes a more expensive lifestyle, with higher overheads. The higher your overheads, the less financial risk you can take.
If you can’t take financial risk, you can’t start your own business. A start-up needs two years of personal runway, ie: enough money to last you two years, assuming your business makes no money.
To increase your runway, save and reduce overheads. The safest course is to live a simple life. Keep your personal overheads down.
Reduce your financial risk, increase your runway. That will take away your fear of chasing your dreams.