Today we had an exciting meeting with a young man that started an online education platform. My friend Josh (a talented creative TV director) and I were asked to chat with him about his business.
The young man and his friend started a tutoring business online during COVID-19, and they were now looking at offering lessons to children of all ages. If you think this has nothing to do with your business, keep reading because many people make similar business mistakes. We listened to his story, and we have to give him kudos for taking it on the chin. He’s gone away, with his list of research, and soon we will mentor further. Why did we do this? Because his business model is flawed.
These are some of the lessons we shared
The business model is flawed for two reasons –
- Putting profits before the product of offering; this will set you up for failure. You should not need to give discounts or special offers if you offer something hungry for. If a consumer purchases a product or service, they will know the value.
- Understand your target audience; Taking the education model the young man was targeting parents, he should target the student. The person who will be spending the most time with your product or service is your target audience. When asking startups and small business owners to describe their target audience, they often describe themselves. This young man was asked to think back to who the worst teacher he ever had, who was the best teacher, the one that inspired him, and then look at what set them apart.
- Do your research – Before launching your business, you will need to do your due diligence and research the market that you are entering. You need to see what your competitors are doing and analyse where the gaps are. You then have to create a solution that will fill the void.
- What does your target audience want, – Consumerism is no longer what you can sell; it is about finding out what your audience needs. Take this young man, for instance; he thought he was giving parents a great deal. In the meantime, a parent is looking for a tutor that can engage with a 6-year old and they know that their 6-year old will never sit for a full hour looking at a computer screen listening to boring talk about maths.
Don’t go for the masses.
- A service for all does not work; amazon has already got this covered; 2021 will start the niche market revolution. The larger players have their place, but they will not have something a niche competitor offers — knowledge and understanding of the product they sell. Startups and small to medium-sized businesses, need to consider product development and deliver a product or service filled with knowledge this gives a more personable service. Target niche clients is becoming a long-term sustainable business solution.
- Knowing your customer’s behaviour and understanding why they seek your service or product can give you a wealth of information and help you give your company direction.
Rome was not built in a day.
- You don’t start a company in a month; Malcolm Gladwell once said to reach true success will take 10 000 working hours. If you hear about a company reaching an overnight success, talk to its owners and asked them how long they have been in the game. If you don’t start with a plan and a business model, you will begin on a shaky foundation, and the future… well we know what happened in 2020.
- Go big or go home is overrated. If one thing has come out of COVID-19, it would be the foreside of keeping a business small enough to be agile and change to market changes and big enough to get notice and built a brand. Some startups believe that they will need to have multiple products to become successful. But if you look at recognised brand names, they all started with one product, and only when they were satisfied with its success, they expanded the range.
Built a team before building the company
- Get the right team; we all believe that we can do it all. I hate to break it to you; you can’t. I nearly failed my business because I was too stubborn, thinking I could do it all. If you spend focus on one side of the company, the other side starts failing. Bring like-minded people with similar work ethics on board. By like-minded, I mean with the same goal as you, not a person who always agrees with you.
Just a final thought, If a leaf has 5-fingers and is the symbol of movements, it still takes a seed, earth, water, and love to grow the plant and to give it life. Success is not accomplished in isolation.
I hope that this has been informative and let us know if you like the article.
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