The worst mistake I’ve made – and now see others make – is to think that if I build it (a great product, web service etc…) that the customers will come.
They will not.
Okay, Google is an exception – but do you really want to play 1/1000 kind of odds?
The most common reason why a business doesn’t take off or move forward is because of a lack of sales.
Yes, some will say it is the lack of funding and it is true that the funding will run out – but only because the money spent so far has failed to generate sufficient revenue to either make the business break even, nor, to persuade investors to keep funding the business in the hope of future revenues.
To often a business has a great idea or piece of research, but is not making enough sales or is not engaging with its market early enough..
If, having built your splendid product or service, you expect buyers to flock towards it then you are make the classic error of engagement with the market at the END of the product / service development cycle – instead of DURING the product development phase.
Above and beyond the ability to recruit great people to support your business, this failure to engage with your potential customers DURING the product development or research phase is the principal reason that businesses fail.
Note, the harsh truth here – businesses do not fail because they lack funding – there is plenty of money available to back great ideas and strong entrepreneurial teams. No, instead, entrepreneurial businesses close because they lack either the right team to commercialise their business or fail to engage with the market soon enough.
Or, to put it another way, the money runs out before the ‘great’ idea is adopted and bought by the market.
Hence, the issue with standard business plans
Too many biz plans make the assumption that you begin by hiring senior marketing or sales director. Of course, this is a 3 month search and then you need to allow them to give notice too. That makes it a minimum of 6 months before any real work gets done.
And, following the same pattern, you can not hire a marketing manager, web manager, account managers, SEO managers etc…. until you have your sales or marketing director in place. So, recruiting a team might take a year.
Can early stage businesses afford to wait a year before it starts to market? No!
This corporate recruitment approach has shocking outcomes for early stage businesses…
1. One year of time required to build a sales and marketing team
2. Significant costs are incurred both in the recruitment costs AND also the cost of running the rest of the business whilst you wait for your sales and marketing to *finally* get going.
But it can get worse – you might hire the wrong person and you might only discover this when you review the quality of middle management that he or she hires.
Or, that you don’t need a super salesman – what you may need is a super digital and new media team.
In this case, you’ve wasted 6 to 12 months, tens of thousands of pounds and now have to unravel your mistake before you can begin a second 6 month process of recruiting the right team. In the meantime, your competitors are on your trail and you’ve burnt through your funding with precious little to show your investors to support an additional round of funding.
Okay, okay, you can see – this isn’t going to work. We can not simply build great products and services and then hope we can find a place in the market.
You see, smart VCs and Business Angels will not fund businesses with this kind of plan.
Instead, VCs – especially in this current environment – want to invest in business that have ALREADY delivered sales. And, have built product and service innovation into the DNA of the business. That is, that they are responding to market needs and developing products – or accurately forecasting where those needs are moving.
The circular argument to avoid is this: You can’t get funding without sales, you can’t hire without funding, exactly what is he to do?
Well, the answer is to forget the idea of hiring a senior marketing or sales director.
Instead, hire a freelance or contract team to deliver a short term project – quickly – and use the results and insights to improve your products and services and/ or change and adjust your marketing strategy.
So, put together a small team of key individuals – all working freelancers or from small key agencies – and give them a fixed budget and objective to deliver.
This approach will allow you to test your market early-on DURING your product development and to use the customer insights / preferences and behaviour to create better products that meet customer needs more directly.
What is the benefit of this freelance approach?
The benefits are simple
1. Your products and services can get to market in a matter of weeks instead of months and years
2. You will know almost instantly if your products and services will succeed, and if not, you can quickly stop your marketing spending and avoid very costly product / service development mistakes
This will then allow you to go back to the drawing board and improve your products / services or adjust your marketing strategy until you can sell profitably.
3. This approach will massively appeal to investors and hence, by demonstrating that you are able to find a far cheaper and lower risk way of taking your products and services to market, you massively increase your appeal to investors.
To sum this up, the freelance / project approach is faster, cheaper and you are more likely to succeed and get funding.
Okay, convinced? Then how to do you do it?
How do you implement a freelance approach to sales and marketing?
You now have two choices.
1.) You can either build a contact list of freelance marketing, sales, IT, PR, writing, design and sales people – such that you can quickly build teams to deliver your marketing projects
2.) You can hire someone else to run the project and recruit the freelance team for you.
If you want to go down the DIY route – then sign up to the next Enterprise Freelance Fair in Liverpool on the 16th March or Cheshire/ Daresbury on 31st March – where you can meet a wide range of freelancers from many different walks of life who can help deliver your marketing and sales projects
or… if you don’t want to engage with freelancers directly, and have the money to do so, then hire Project2Sell to put the team together for you and project manage the piece of work.
Regardless of which path you choose to take (and you may choose to do both – ie. directly recruit key freelance talent whilst outsourcing certain projects) you no longer have the excuse for your business not getting into its market place.
Now, no one can guarantee that when you take your products to market that the customers will want them, but, even if this is the case, you can find this out early (before investing your entire life savings) and either adapt your products/ services or start with an entirely new idea.
Either way, your chances of success in your current or future business will be massively increased.
That’s why ‘HOW’ you engage with your marketing and sales effort is such a key determinant of whether you will succeed or not. It is also why lack of funding is not a good enough excuse anymore.
So, don’t believe in the myth of ‘build it and they will come’ – instead make your engagement with the market an interative process that feeds and supports both the development of your product / strategic AND your marketing strategy at the same time.
If you can achieve this – and this is no mean feat – then you are far more likely to succeed and to be able to raise any additional funds that you might need.