A young entrepreneur who is starting a business in the IT project management market is experiencing difficulty getting his business off the ground. He has not been able to attract clients and senses that this may be due to his marketing strategy or market research.
This is a very common problem. Many professionals, often in IT, accounting, HR or marketing, would like to open their own businesses rather than work for big companies.
The questioner thinks that his market research or marketing strategy may be at fault and he is probably right. Many people in his position ask friends and contacts to consider using their services if they start their own business, and they get positive answers. But this is no guarantee that there will be enough work from this source when they do take the plunge.
In classic marketing theory, the questioner needs to identify unmet needs, and then provide products and services to meet those needs. So instead of asking colleagues if they will support him, he should ask them what they are not getting from their current suppliers, and then plan to plug those gaps. This also tells him where his target markets could be, such as organisations like those his contacts work for, where there are unsatisfied needs.
His initial customers will be whoever will buy from him, because the business needs an income. But, getting out of the survival phase will mean going after the customers most likely to require his services. That implies identifying the target markets and then developing promotional plans to make them aware of his company and inviting them to do business.
Marketing promotions need not be expensive. His best opportunities will come from networking with people in his target markets, both in person and on the Internet, using forums like LinkedIn and other social media. He needs a well written profile, a web site and business cards, and he should take every opportunity to talk to groups of people – giving them free advice when he does so.
He needs to consider that there are thousands of IT companies, and most of them offer similar products and services. He must differentiate his business from competitors, and I suggest he does not simply say that he will give better service than others, because everyone claims that – it is not a differentiator.
He can set himself apart with unique products and services or by superior customer relationships and I suggest this is the area he should focus on. Most start-up businesses will rely on the technical expertise of the founder, hoping to grow by gaining business through word of mouth. A better plan is to learn the skills he will need to identify, sell to and retain customers. Yes, I am suggesting that this professional takes a sales course or buys some good books on sales and account management.
He needs to learn how to find prospects to talk to, how to make an approach, write a proposal, present his value proposition, uncover unmet needs, close a deal and all the other techniques of a skilled salesperson. Then he needs to learn about account management and customer relationships – it may sound like heresy to him right now but these may be more important skills for his business than his technical expertise in his field.
At some point he will be confronted by the awkward question of whether to go it alone immediately or build up his business part-time while remaining employed. If he decides to dive right in he should make sure he has a lean lifestyle or a big savings account to cater for the bad months. Get rid of the gas guzzler with the expensive repayments, pay off debt and pay the mortgage bond in advance. There will be tough times ahead.
If, on the other hand, he decides to start gradually, I suggest he should discuss it with his employers. This is not how most people would work, but it usually pays to be honest. He will have to make sure that his work for the employer is not affected by his start-up; by contrast he should redouble his efforts on behalf of his employer so that he becomes even more valuable. Then, when he does leave, the employer will give good references, and possibly even become a customer. Lastly, I would urge him to take this plunge. The world of entrepreneurship is uniquely exciting, challenging, scary and fulfilling, and he will only experience this wonderful feeling by joining in!