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The Secret to Finding A Profitable Business by Dr. Leonard A. Manion |
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How many businesses have you been involved with over the last year? Three? Four? Ten?
What seems to be the problem? Why aren't you making any money? The businesses looked good. They looked profitable. What's wrong?
Many entrepreneurs go from one business to another looking for a profitable business. They invest their hard earned dollars into one business after the other, hoping that one of them is going to be "the" business. Yet, each time, they're disappointed.
What seems to be the problem?
The problem is that most entrepreneurs choose their business in the following manner.
How should you choose your business?
1. First Choose A Market
Find a large market of people. If you don't have time to do research, call your local mailing list provider. Ask them what their biggest list is. Let's say their biggest list consists of divorced women, age 21 to 35, raising their children alone and working for minimum wage.
2. Find A Major Problem They Have In Common
In this case, their biggest problem may be with personal finances and credit. They've gone from a two income family to mom's minimum wage and occasional child support payments from dad. Creditors are calling them about bills. Banks are threatening to foreclose. Their mechanic is trying to take advantage of them and charged them $300 more than they expected for repairs on their car. They need help!
3. Find A Solution
What solution can you offer these women? They need immediate help. Need immediate relief from their problems. What product or service can you offer them? They don't have time for a business opportunity. They need immediate relief. They're in crisis!
Let's say that you've discovered some information that would take them by the hand and help them regain control over their finances. Information that would help them to have immediate relief from their problems. Or, at the very least show them the light at the end of the long dark tunnel.
4. How Much Can They Afford?
You know who your market is. You know what their problem is. You have found a solution to their problem. The next question is, can they afford your solution?
There's no point in offering someone who is experiencing financial crisis and in debt to their ears, a $599 solution. They can't afford it. However, if you could provide that solution for $9.95, depending upon how you offered it to them, they'd probably scoop it right up.
5. How Much Are Your Expenses?
Everything is in place. You know how much your market can afford. The next question is, how much can you afford? If the information cost you $8.99 to produce and sell and you're selling it at $9.95, you may not be able to afford offering this group their solution.
However, if you can get the information published, let's say on audio tape, and have it duplicated, packaged and marketed for about $1.50 per tape, then you can see a high markup that would be profitable for you.
6. Back-End Sales
Most entrepreneurs miss the boat when it comes to making their
business really profitable. They sell one item or service and that's it. Their sales are a "one shot deal". They never sell anything else to their customers.
What else could you offer our divorced woman? Discounted long distance services? Information on bi-weekly mortgages? Discounted legal services? AAA Membership? Help with credit repair?
See The Difference?
You may have been choosing a business on what you thought was a
"good idea". The product or services sounded great. So, you purchased the business and went in search of someone to sell it to.
Your business, has a higher chance at success if you first find your market and then go look for a product or service. I tell my clients, "Offer people what they want instead of what you want to offer them."
Let me give you an example...
There's a lot of people on the Internet who offer websites. The cost of websites will run anywhere from free to $5,000 or more. Most providers tell you what they will offer you and how much they will charge you.
The average website provider offers a package deal. Let's say it's 25mb storage, cgi access, unlimited hits, Front Page 98, email for $19.95 a month.
I found that most entrepreneurs didn't need all of that and very few needed 25mb when the average website is about 500k. So, I asked the entrepreneurs what they wanted and how much they wanted to pay. They told me they wanted; 1mb storage, unlimited email, spamfree email, cgi access, unlimited hits and they wanted it all for $50 a year.
I looked at my expenses and the profit margin and said, "Ok, I can live with that."
Not only did I sell a lot of web storage to the those I surveyed, they referred a lot of people they knew, who were looking for the same thing. As for back-end sales, I could offer to have one of my associates design their webpage or website for them. Or, offer them other extended services they may need, such as merchant card status.
Is it starting to make sense to you, to first find your market, ask them what they want and how much they are willing to pay for it AND then offer it to them? Can you see where you would be more successful and profitable?
Think about it, Talk to you soon....
Dr. Leonard A. Manion specializes in helping entrepreneurs to achieve the success and profits they deserve.
If you have any questions or comments about this site:
Email - Kristi Rushing