“If 90% of startups fail, what’s the first step you have to take to make sure your startup will work?”
You’ve got a product you love, a brand you want to launch, and now you’re eager to get this startup going. But according to Forbes magazine, nine out of ten startups fail! No worries! This is your challenge to work smarter and do what needs to be done: research!
Research is more than going to your local boutique and checking their wares, or asking a friend if she likes your design – it’s the due diligence that provides you with comprehensive information regarding demographics (who, where), psychographics (likes, loves, the emotional rationale behind why people purchase), overall consumer spending and shopping behavior (online or not) so that your startup reduces the risk of failure and thrives.
1. IS THERE A MARKET FOR MY PRODUCTS?
One reason that startups fail is they make products that no-one wants and that are not needed. If you’re going to spend your time and money developing and manufacturing a product, then spend your time making sure it’s the right product for the right market. Your research tools: focus groups (it’s okay to start with friends and family, just make sure they are being honest and objective). Also employ buyer/consumer interviews, questionnaires, and surveys. Shopping is also research. Check out the stores or online brands that are competing. What’s moving. What’s being discounted. Social media is also revealing. What’s generating love on IG? Snooping around can reveal a lot!
2. STEP BY STEP: RESEARCH IT RIGHT
The success of your product depends on its relevancy in the market; the number of competitors, retail distribution, consumer profiles, and its point of difference. Good research will tell you all!
a) YOUR CUSTOMER:
Who is going to sell your product? Bricks and mortar boutiques, online…Talk to the buyers. You’ll discover their preferences, and the issues they deal with (i.e. late shipping, wrong price point, product positioning) – and that information can help you create a better product and business plan. If your product is unique or stand-out enough, and you have a sample, you might even get some pre-orders.
b) YOUR COMPETITION:
Surprise! Even when you think your product is one-of-a-kind, you have competition. Knowing WHO your competitors are, and WHY your product differs from theirs is crucial. Also, where are they selling? Through this research, you can discover new places to sell your products, and on which social media channel the brand is finding the most traction.
c) YOUR PRICE APPEAL
By looking at your product and production costs early on, research can help you establish your eventual price point which in turn provides info on where best to market it. High end, low end, there is no end of options. The research will reveal how to price it right so you are covering costs and making money.
3) GET A MODEL… A BUSINESS MODEL
A business model is your blueprint. It’s where you define revenue sources, finances, right down to brand identity and marketing potential. Before you start, pick a brand you admire and that’s doing well and do a thorough analysis of their business model/structure. You don’t need to copy it, but basing your own business model on a success story points you in the right direction.
4) MONEY MATTERS
Financing your dream product may be the last thing you want to think about, but it’s also the first. Having startup capital is a must. To know how much, research the financial needs for a whole year. How much will you need to put aside to manufacture, ship, pay duties, etc? How small/big is the profit margin? Don’t forget that unless you have a side gig or a sizeable amount of capital you will need money to pay rent
5) WHAT’S MY POINT OF DIFFERENCE
However cool, fun or functional, chances are there a product out there that is somewhat similar. So – what’s it’s appeal, usage, relevancy and how will it stand out? Review your product, its design, packaging, and shelf appeal and if it’s not differentiating itself substantially from the competition, go back to the drawing board.
DON’T LOSE HEART
Startups are fueled by passion but they also need determination. If at the first setback you start to lose focus on your goals or feel like giving up, then remember – and refresh – that “do it” spirit you had in the first place. And remember, nothing succeeds without hard work and perseverance.
Need some moral support, or some answers to questions? Find someone in the biz you admire and/or who has succeeded and who has time to give you. Better still: connect with Source My Garment. Our Coaching Package No. 1 is the ideal go-to for advice you can work through – plus you access one-to-one help and advice through the complimentary Dee Time (that’s me!).
Now that we’ve gone over some of the traps startups fall into, as you get going, ensure that none of them apply to you.