Be lean, get a good grip on you cashflow cycle (what’s going in and out and at what proportion and timeframe) and test, test, test your idea in the market – without a product-market fit you ain’t got s#@t!
One of the things I have observed working with hundreds of small businesses over the last few years is that there can be a tendency to focus on tactical elements as the expense of the strategic.
“I must get a website and sort my socials, I’ll just build my Facebook funnel and create a video campaign and those prospects will be beating my door down.”
“I’ma hustling bro, look at me go man! I have totally got this entrepreneurship lark.” “I’m executing, moving the dial and getting it done.”
Before you know it, you are $10k out (with nothing in) and more bills to pay.
What went wrong?
You know these days entrepreneurship, and being your own boss, is much easier than it’s ever been. The entry barrier to becoming “an entrepreneur” has never been as low as it is today. But that doesn’t mean that being your own boss and running a business is easy!
So, what to do?
Go back and re-read the first paragraph.
So, what do I mean by a product-market fit? Is there a market for your service? Does the market want what you are creating?
Are you solving a problem? Who are you helping? How is your product relevant right now and why are you better than the others? Sometimes this can be complex to determine and if it’s wrong, well things can get ugly!
I have seen businesses that have spent tens of thousands marketing a product that does not have a solid value proposition. Or the other thing I see happening a lot is a value being marketed but not delivered on. Does your offering live up to the marketing message and promise?
You can have the most advanced copy, beautiful imagery and finely targeted Facebook campaign. But, if your “product offering,” the value you bring to the customer, is not right, your campaign is not likely to be successful and your business will flounder. The business model is flawed if you cannot make a profit (including enough to build a rainy day buffer) if you cannot and do not identify:
Who you are
What you are doing
For whom you are doing it
Who else is doing it
Why what you are doing is valuable
Whether someone will pay for it
And pay enough that you can build a buffer for rainy days, reinvest and take a wage (eventually).
As a business advisor and marketing coach, I am just coming up from a couple of the most difficult weeks in my three-decade long career, where I have worked day and night to assist businesses to digitally transform at lightning speed to meet the head spinning-rapidly changing needs of the new and ever-evolving market place. We are all there, small business owners, standing shoulder to shoulder right now – all in this together (there is some comfort in that right?)
But there is one thing, one small thing that I can tell you about my last 2 weeks and that is in a climate where you cannot see past your own bloomin’ nose, what you need to do is keep moving. The other thing I know right now is we are in the midst of a ‘capitalist sorting mechanism’ (credit to the Economist) which is revealing weak business models and stretched balance sheets.