How can you tell if your Startup will Succeed? Doug Richard, Founder of School for Creative Startups

by Startacus Admin

Starting a business entails a certain amount of risk. That’s something entrepreneurs take for granted, one can never be certain any undertaking will reach a successful conclusion. For most enterprising spirits, that gamble itself is part of the reward.

That said, there are questions entrepreneurs can ask themselves that will give them an early understanding of how well their enterprise is likely to do. Answering these questions before you start a business, and turning back to them whenever it is struggling, can get your business on track and keep it there as customers come and go and business climates change.

Do you know exactly who your customers are and how to reach lots of them for nothing or almost nothing?
Do you know where and how they decide to buy your product, what makes them choose one product over another, other than price, and how they like your kind of product or service delivered? If you can’t answer these questions in the affirmative, you have a serious problem. Many people start their business to create a product for people they don’t know at all. A sculptor who doesn’t know who buys sculpture, a fashion designer who doesn’t know where folks who buy their kind of fashion shop, an application developer writing accounting software when they don’t know lots of accountants ready to buy it are all going to end up developing a product they can’t sell.

Do you know how to price your product or service?
Do you know how to set a price that your customers will understand, based upon the features and advantages offered by your nearest competitors? Does your price reflect that what you’re selling is a good value? Does it leave room for you to cover your cost of production, your cost of marketing, your salary and the margin you will pay to your resellers and strategic partners? If you get pricing wrong you’ll have a serious problem on your hands.

Do you know how to sell?
To sell a product or service online you must be able to sell it face to face. You need to know your customer, your product’s benefits relative to the competition, and why your product or service is priced correctly. Once you can comfortably sell your product face to face, you can then begin to sell it online through your website, online channels and social media. You can sell it to resellers and tell them how to sell it to others. You can sell it to distributors and explain how they can sell it to resellers. You can sell it to marketing partners who can extend your visibility to customers worldwide. If you don’t know how to sell, your business will struggle.

If your answers to these questions aren’t optimal, methodically go about improving them. Figuring out how to find large numbers of customers you can reach for free, or almost free, is something any business owner with a good product can do.

Pricing your product or service is a matter of analyzing who buys the kind of thing you sell, how they shop, what product or service options they have, and how they are priced. Each of your competitors provides a “basket of benefits” for a price. Analyze what’s in the basket and figure out how to provide a value that’s better for your customers. A quick note, better doesn’t necessarily mean cheaper. A low price is just one of the benefits that may be in your basket, higher quality, easier purchase, delivered faster are other benefits.

If you don’t know how to sell, you can learn. There are hundreds of books, DVD’s and courses you can take that will give you the ability to negotiate and sell well.

I founded School for Startups in 2008, and School for Creative Startups in 2011 because I enjoy helping startups succeed. To learn more about how we do what we do, please visit School for Startups or School for Creative Startups.

Doug Richard is currently looking for 100 budding creative entrepreneurs to join the 2012 programme. Applications close on 15th August the course kicks off in September 2012.

ABOUT DOUG RICHARD

Originally from California, Doug Richard is a Cambridge-based entrepreneur and angel investor. He founded the original School for Startups in 2008 and School for Creative Startups in 2010.

Doug’s first business was a creative special effects production company Visual Software and he has since built up three decades of business experience developing, selling and investing in businesses of all shapes and sizes. Doug quickly gained a public profile in the UK as one of the infamous Dragons on the first two series of Dragons’ Den.

It has just been announced that Doug is to lead an independent review into the future of apprenticeships for the UK government, The Richard Review of Apprenticeships. Doug is committed to teaching and running his social enterprise projects. Over the years he has taught audiences ranging from prison inmates to academics to ex-soldiers. He makes business education accessible, taking an upbeat approach to a subject which can be intimidating.

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Published on: 8th August 2012