When I was in secondary school, my economics teacher used to say that the number one reason why most small businesses fail is because of lack of adequate capital. I believed my teacher like most of us did. Why not? He was my teacher and he knew it all. There was no way I could…
Question His Authority.
What I have found out over the years since I’ve been in business is that while having adequate capital is vital and essential, it is not the biggest reason why most people do not make money with their businesses. I’ve come across a lot of business owners that had access to a lot of money but their businesses still struggled in the market place.
So, was my economics teacher lying to us?
I won’t go that far. He was innocently passing across what some other people passed across to him. He had never done any kind of business so all he taught us were mere theories.
From my experience in business and consulting for other small business owners, I’ve since discovered that the reason why most businesses do not make money and fail at the end of the day is simply because…
They Do Not Sell What People Want To Buy!
Are you surprised? Don’t be. You see, the truth about business success is that once you offer people what they WANT to buy, your business will make you more money than you can ever spend. Lack of adequate capital will not be an issue as customers and investors will literately beg you to take their money.
Before you launch out with any kind of business, you must ask yourself: do people really want my product or service? If you cannot answer that question with a straight face, then do not bother to start the business.
Do not make mediocre assumptions like most people do.
Assumptions like “Every human being must eat so I will sell food” or “every human being must drink water so I will sell water”, or “every human being must wear clothes so I will sell clothes”.
Yada. Yada. Yada.
Don’t get me wrong.
I’m not saying food, water and clothes will not make you money. What I’m saying is that you should not follow general assumptions. Have you asked yourself if people actually WANT the kinds of food you want to sell? If you have not, you must have a rethink.
I remember a lady telling me years back that because we must all use salt to cook, she would make millions selling salt. I laughed really hard because I do not know the volume of salt she would sell in her shop to make millions. Come to think of it. If you organize a big party, you cannot finish a bag of salt!
If you want to make a lot of money, you should sell what people WANT to buy and not what people NEED to buy. Products people need to buy will make you decent money but products people want to buy will fly off the shelves…
Faster Than a Texas Tornado.
For those that are wondering what the difference between a product people NEED to buy and a product people WANT to buy is, kindly give me an opportunity to explain. There is a colossal difference between the two and I will explain with an illustration.
Let’s assume you’re a mobile book seller and you have just taken stock of two new books. One of them is titled “How to easily pass WAEC and JAMB” and the second is titled “How to inexpensively relocate to Canada”. Let’s also assume you are about to market the books to group of secondary school leavers.
Before we go any further, let me ask you this: if you have a son that has just completed his secondary school education, what will you advise him to do at that stage in his life? Pass JAMB and go for his university education or travel abroad to work? The obvious answer is to pass JAMB and go to a university because that is what he NEEDS at that stage of his life.
I want you to imagine a situation where you can gather 100 teenagers that have just completed their secondary school education. Ask them what they will prefer. To pass JAMB and go to a university of to travel abroad? I can guarantee it that 90% of them will choose to travel abroad. Why?
Because that is what they WANT!
Are you getting the picture? You have a bigger chance of success when you sell wants. When it comes to wants, human beings do not make their buying decisions based on common sense. We tend to buy emotionally.
Why do you think sports newspapers sell more than business newspapers? We NEED business news, but what we WANT is sports news. We don’t care that these footballers we religiously follow their careers are already multi millionaires.
The lesson is simple: before you start that business, make sure the product or service you want to offer the public is what the really want and not what they need!