Making Your First Million.pdf - Association of Net Entrepreneurs and ...

Making Your First Million
Chapter 9 - How Do I Move On From
Here?
Okay, you've made up your mind what you're going to do. Where do you start? At this
point most proud new venturers look for premises, plant and stock. Stop! Don't do it.
You're way too far ahead of yourself. Come back to earth. The prime, and essentially
only consideration for your new business is making sales. You know what you're going to
sell, be it goods or services, but have you identified who's going to buy? Most novices at
this point shrug their shoulders and offer vague optimistic blustering. "Of course people
will buy. The product is so fantastic it'll sell itself. All I need to do is advertise and
customers will fall over themselves to push cash into my hand." Maybe. But you might
do worse than test the market first.
Ten years ago at the peak of my business infallibility, Howard Rose offered me a job lot
of computer security alarms he'd acquired in a contra deal with Brad Cooper. These were
movement sensors that alarmed if the computer was moved and the power turned off.
After a little casual negotiation in $10,000 increments (rather than decrements) I bought a
truckload of 7000 units for $50,000. I was convinced these would sell like Mars Bars
over the back fence of a fat farm and devised a full-page ad touting the benefits at $59
each. I sold 3. Notwithstanding, figuring I was making nearly 90% profit I repeated the
$1000 ad. I sold 4. Something was drastically wrong. No matter what I tried, price
reductions, heavy advertising, buy one get one free, 70% off sale, buy 2 get 10 free, I
couldn't shift them. After 7 years of hard slog I finally shifted the last of them back to one
of Brad's original customers. The mistake cost me dearly. Not only was I stuck with a
painfully unsaleable item (There was nothing wrong with the product. It was a great
alarm. It's just that nobody wanted it.), but I was also stuck with the effort and expense of
shifting it, to the detriment of my other stock lines. Look before you leap.
If I have learnt anything in 20 years it's "Test everything". Just because I like something
doesn't mean my customers will. Bullying and blustering, riding over the top of their
sensibilities and insisting this is the greatest thing since skateboards with trainer wheels
won't work. (Now there's an idea. Add a small sail and some brakes . . .) I know. I've
been guilty of it often enough. I've had to learn the humility to be teachable and turn my
whole business focus around from what I want, to what my customers want. And if you
want to avoid the expense of making big mistakes, my advice to you is test the water
first.
Take the product or service you want to sell, and before you launch yourself body and
soul into it, take the time to test market it. This is such an elementary thing to do that
most business owners make the elementary mistake of not doing it. The day that Jurassic
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