One of my teachers in primary school used to say that her greatest moment in life was when she met one of her successful pupils.
Such is the joy I had last week when I met a man who praised me for helping him turn-around his business some years ago.
In fact, I did not even recall meeting him before until he reminded me that a few years ago we met at a Barclays Bank business club seminar where I was one of the facilitators.
I then remembered him. He came to me after the presentation and narrated how his business had been struggling for three years and he felt like giving up and looking for a job.
Pressed by time, I curtly gave him five questions, told him to answer them and look for me later.
He did not look for me and I did not follow-up on his case since he did not look like a potential client.
The five questions were: Is your marketing right? Do your products meet a specific need? Is your target market large enough? Is your pricing right? Are you in the right business?
Well, from my vast experience most struggling businesses have a root problem in one or some of these areas.
First, having great products does not guarantee you success unless you market and promote them well. There are several firms that are struggling due to weak marketing.
Second, find out if your product is meeting a specific need in the market. You cannot create a need through marketing. The objective of marketing is to identify a need or a problem and solve it. Once you have what customers need, selling becomes easy. Third, establish whether the target market is large enough for you to sell sufficient units profitably?
This is very important because you could have a good product that meets a need and market it well but the market is too small.
To succeed in business you must have enough customers who are willing and able to buy at a sustainable price.
Fourth, look at your pricing and margins. If you overprice your products in a market where competitors and substitute products are not in short supply, you will always struggle. If you under price you may be always busy and working hard but struggling to make ends meet.
Always remember that customers are attracted by value and not price. Value is mostly a perception. If you offer a product with a low perceived value, people will never pay a high price. You must always highlight value as a selling point.
Finally, some people struggle because they are in the wrong business. You could be struggling selling cars whereas your strength and expertise is in selling clothes. Many people have made fortunes by simply changing their business line.