By Jude Obuseh
(AGENDAWATCHDOG) – Many people have erroneously fingered the lack of viable business ideas as a major challenge to becoming successful entrepreneurs. Funny enough, these people live in areas full of vast money-making opportunities that if exploited could turn their lives around, contribute to economic growth, create and distribute wealth. But due to widespread ignorance about these opportunities, they remain largely untapped.
Many aspiring entrepreneurs go into business with a lot of passion and enthusiasm, alongside a large capital cache. They pour their whole energies into their ventures, determined succeed. But within a short while these promising, well-funded ventures begin to experience hiccups and ultimately collapse.
Motivational speakers will tell you that having passion or burning desire for a business venture is all you need to succeed in business, without telling you the hard truth that skyscrapers are not built in thin air. They fail to reveal a fundamental business secret to would-be entrepreneurs without which most startups fail in the short run: Identifying a market for your product(s) or Service(s) before formally starting your business. This is the main thrust of this post.
My advice for aspiring entrepreneurs is this: Don’t rush into establishing a business you see some people excelling in without verifying market demands for your product(s) or service(s) in the environment you intend to locate your business. Because Mrs. Nwabueze is running a successful restaurant business does not mean Mrs. Njokwu can succeed in the same business. Mrs. Nwabueze might be better suited for the restaurant business due to certain factors that might not be available to Mrs Njokwu. Mrs. Nwabueze might have carried out a thorough feasibility study on the food business and discovered that there is high demand for food in her neighborhood or business location, and in turn, exploited this scarcity to her advantage. The same cannot be said of Mrs. Njokwu who might be living in an area where there are many restaurants.
Under Amour (UARM) and the McKesson Corporation, two American commercial giants, would suffice as classic cases of the successful application of this business strategy. Under Amour’s CEO, Kevin Plank, as a college football player, had the problem of always having to change out the sweat-soaked T-shirts he wore under his jersey. This led him to develop a type of moisture-wicking fabric for athletic performance, which he later turned into a sports outfit. His ability to identify a specific need and transform that idea into reality has transformed (UARM) into a multi-million dollar organization.
The McKesson Corporation is an organization founded in 1883 to import therapeutic drugs and chemicals that were very scarce during those times. This was made easier by the introduction of sea-going vessels which eased the initial limitations of transporting goods from one continent to the other. This initiative sprang from the observation of the originators of the organization on how they could easily import and distribute these drugs on wholesale basis within the United States of America (U.S.A).
Today, the McKesson Corporation, a company that began in a small shop in Manhattan has, through the creative genius of its architects, effective strategizing, and consistency, become the world’s largest wholesale distributor and the fifteenth largest company in the world, generating billions annually. The secret behind the overwhelming success of McKesson Corporation was the solid foundation on which it was built: Discovering a need and servicing that need. It set the stage for the prosperity, fame and reverence it currently enjoys.
Just like McKesson and UARM, profitable businesses, large or small scale, are built on solid ideas. Becoming a successful entrepreneur requires a lot of originality and creativity. There are so many needs that are begging to be met; so many products and services waiting to be churned out and distributed for use or consumption. Aspiring entrepreneurs who expect to succeed in their enterprises must be very innovative by looking for services that need to be met in their environments and create products and services to meet these needs. By doing this, their products and services are guaranteed already made markets.
Now, this is not saying that other considerations such as a large capital base, obsessive passion and other salient factors are not relevant in setting up a business venture. Far from it! My take is that businesses that are established without identifying potential markets for their products and services ultimately fail; that no matter the money you pump into a business venture, you need ready-made consumers to patronize you. If you can show me a successful enterprise that is thriving without a customer base, then i will completely withdraw my submissions in this piece.
In all, care should be taken to clarify your reason(s) for going into a particular kind of business: What are the prospects for your products in the market? What is your target market? Who are your competitors? Rushing into a business, without verifying the market demand for your product(s) or service(s) is a sure path to failure, even if you have billions of dollars as startup capital.
I’ll keep you posted!