How can I attract more customers?
My business has been operating for eight months and I have a good turnover, but I’m struggling to attract more clients, which I need to grow. How can I attract more customers? — Maurese
At some point, you will hit a sales plateau. Here are three ways to grow sales without dropping the operational ball:
- Bring in a partner that can either take over operations, freeing you up to sell, or sales, freeing you up to focus on operations. You can’t do everything and expect to grow past a certain point.
- Change your business model. The Holy Grail of business is ‘annuity revenue’. Instead of charging your customer R2 000 for software, once-off, charge them R180pm for 12 months. This will impact your cashflow negatively initially but over time your ongoing revenue will grow and create a buffer to fall back on every month.
- Use Facebook and Google for marketing. They are the most focused platforms for reaching your potential customers. If you don’t know how to do it, use a company like Popimedia.
If your sales stops growing, you become vulnerable to shocks. You have no choice. Keep sales growing.
Can I conduct market research without giving out samples?
In 2010 I left my job as a pilot to become a cucumber farmer. I have established a brand name and we have a turnover of R10 million. I want to expand yet still keep the core of the business as cucumbers. I thought of making some cucumber jam. How do I research the jam industry, and can I conduct market research without giving out samples? — Kobela
I have no experience selling jam, or any real-world consumer good. All I can share is the way to do things in the digital world: Research in the absence of sales is theory. In theory there is no difference between theory and practice. In practice, there is.
Forget about samples. The best research method for a start-up is to start selling. Make jam, start selling it. If people buy, make more. If they keep buying, invest in producing what the market wants.
Until you’re 100% sure people will buy, don’t invest in a factory. Make your jam as cheaply as possible. Don’t stress if it’s not a scalable process.
Start making jam in your kitchen. Build a factory later.
How do I overcome my fear of poverty?
I have a full-time job that pays the bills, but a burning vision to go into business. The fear that I won’t be able to sustain my household without my salary is holding me back. I know life is about risk and stepping out of my comfort zone to make it or break it. I know success is all about hard work, which I know I can put in. What do I do? — Terrence
You have a legitimate fear: Poverty. No matter how big your dream, it’s no fun running out of cash. Your challenge is the same for every aspiring entrepreneur trapped by a monthly pay-cheque. It’s even harder if you have a family to support.
A salary is dangerously addictive. With a salary comes a more expensive lifestyle, with higher overheads. The higher your overheads, the less financial risk you can take.
If you can’t take financial risk, you can’t start your own business. A start-up needs two years of personal runway, ie: enough money to last you two years, assuming your business makes no money.
To increase your runway, save and reduce overheads. The safest course is to live a simple life. Keep your personal overheads down.
Reduce your financial risk, increase your runway. That will take away your fear of chasing your dreams.
Listen to this
Alan’s audible book Be a Hero: Make Life an Adventure is now available on Amazon.com and Audible.com. Read by Alan himself, Be a Hero, is a collection of stories on how to make your life an adventure by changing your mindset ad tackling adversity. Go to Amazon.com or Audible.com to download your copy.
Do you have a burning start-up question?