Should you offer new products or services?

graphic image of a rocket that crashed

Recently, we’ve been privy to a lot of conversation from small business owners who are trying to come up with new products or services…. some even considering startups.

No surprise.  The ongoing disruption small businesses are experiencing (Thanks, Covid) has left owners looking for new income streams to replace those that haven’t come back.

An obvious example is restaurants and bars. But any business catering to a downtown corporate market…. or convention trade…. or travel and hospitality industries…. is also scrambling to replace lost income as many workers continue to work remotely.

Over the years, we’ve seen more than a few startups crash and burn before they even got started. Since offering new products or services is not all that different than starting a new business, we want to share what we’ve learned.

Why do businesses fail?

Usually, there’s a simple reason behind a business failure and it’s generally one or more of these 3 things:

You haven’t identified your target market.

I always cringe when someone tells me “everyone” is their target market. Rarely is that the case.

OK, maybe for something like toilet paper…..or water. Necessities that all humans need. And even then, the target market for pricey high-end bottled water like FIJI is not the same as that of generic brands in the flimsy plastic that you pick up in the grocery store. FIJI customers are willing to lay out far more money than someone who shops by price.

For most ventures, there’s a specific audience. Luxury products are geared to different audiences than mass market offerings. Think Versace vs Walmart or Tesla vs Ford. Whole Foods vs Aldi.

The marketing you develop to sell your products —  the language, design and messaging — will change based on who you’re marketing to. That’s why FIJI’s water is “artisan” and comes in a sleek, beautifully designed square bottle. It’s aimed at customers who are willing to pay up for a premium product, not someone looking to save money.

You haven’t verified the need for your product or service.

This reason always makes me sad because I see it far too often and it’s so easy to avoid. You come up with a “great” small business idea — an idea, not a concept because a concept usually involves significant reasoning — and an idea…..not so much.

A doomed-from-the-start startup, on the other hand, usually is the result of someone falling in love with their idea. They’re so sure that everyone will love their product that they neglect to do market research.

The most egregious example I’ve seen was someone who quit a well -paying job (with benefits) to launch a business selling something that not only did not fill a need but few people would buy.

I was astonished.

Had I been able to say something……which I couldn’t because it was a personal relationship and my feedback was not requested….. I would have opened my (rather big) mouth because it pains me to see an eager entrepreneur fail.

But I had to keep quiet while the startup launched, burned and crashed….taking thousands of dollars with it. A pricey lesson that didn’t have to happen.

You haven’t set aside a marketing budget.

We’re website design and developers. We love creating custom sites, and nothing makes us happier than happy clients. But every once in a while, we turn down a project because while the potential client might be able to pay for a custom website, they hadn’t set aside any money for marketing.

Long ago when the internet was in its infancy, you could launch a new business on a website and get away with word-of-mouth marketing or a small public relations campaign to promote your company.

But today there’s no way in hell that can happen. There’s far too much noise….. online and off. We’re bombarded with advertising from a multitude of channels.

That’s why there are influencers on TikTok and Instagram and social media experts to manage your campaigns. Add in email marketing, blogs, podcasts, newsletters, trade shows (yes, they’re coming back!) and other content development and you’re looking at a marketing campaign. And campaigns cost money!

If you stand still and stop promoting, you can be sure your competitors will be waiting in the wings to overtake you. So putting all your money into a website is a really awful idea.

Recently. we turned down a lucrative prospect for reasons 1 and 2. So even though there was a marketing budget, we just couldn’t stomach the idea of participating in a project that was doomed to fail.

Instead, we suggested that they hire us for a few hours of consulting to review their idea and see if we could help create a more feasible option. Because as much as we like making money, we also want to help our clients succeed. 

Next time a colleague or friend tells you about an idea for a new product or service and you’re feeling iffy about it, do them a favor. Share this blog post with them. They might be very grateful.

Resources

Some interesting post-Covid business opportunities.  13 Post-Pandemic Businesses You Can Start Now

Here’s a book to read for more prep work. So when you come to us to build a new website, you’ve already qualified your business concept. 5 Books to Read Before Starting Your Business by Ken Dunn.

5 Things You Can Do Right Now to Help Your Clients.

Read this if  you’re already in failing mode. 5 Tough Steps to Save Your Failing Business by Doug and Polly White.

And if you’ve had to close up shop. Before you beat yourself up, see  what good company you’re in.

One failure does not make you a failure.  It makes you a little bit wiser for the next opportunity. Just ask Mark Cuban.  13 Business Leaders Who Failed Before They Succeeded by Lynn Truong.

If you’ve been mulling over starting a new business or launching a new product and having second thoughts, call us. We’re happy to brainstorm with you. Maybe we can save you some money. And grief.

 

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Supporting Our Small Business Colleagues & Friends

Every once in a while, I like to look back to what we were doing a year ago.

In July 2019, life was radically different. We were busily blogging about branding. We also  roamed freely in our cities and networked face-to-face. Summer was filled with beach time,  boat rides, biking and concerts and festivals. A typical wonderful Chicago summer.

A lot has happened in this year. A lot of really difficult days as small business owners struggle  to survive…..or just to not have to shut down.

More than ever, we need to support one another. Our business community is stronger when  it’s healthy. So we’ve come up with something called Small Business Shoutouts. We want to  help our small business colleagues, clients and friends who are facing huge challenges. We  want to celebrate the grit, hard work and determination it takes to start a business and stick  with it through difficult times. Like now.

The goal of Small Business Shoutouts is to spread the word. Maybe you don’t know these  businesses or organizations. Maybe they offer something you’d love or a friend or colleague  would love. We’d love if you could share them with friends. Because we think that’s what a  healthy small business community does.

Here’s who we’re shouting out this month:

Shoutout #1 goes to Free Spirit Yacht Cruises, a family-owned private luxury yacht charter  Owners Angela and Joe Donofrio operate two of the most inviting private yachts on Lake  Michigan. Many of their corporate and private clients come back year after year to entertain  and celebrate happy occasions. But this year has been rough with almost three months lost  due to COVID-19. When your season is only six months long, it’s devastating to lose half of it.

free spirit private yachtA private yacht offers excellent entertaining opportunities despite the virus. And it definitely is  a spirit booster. You’re outside in fresh air and the yachts are large enough for easy social  distancing. You can still enjoy great food and drinks. The yachts are spotless and every  precaution is taken to keep you and your guests safe. So if you’re looking for a way to  celebrate summer, a private yacht charter might be just what you need. The season doesn’t  end till early October. Just sayin……

Full disclosure: I worked with Free Spirit on their marketing and PR from the time they first  bought the company ten years ago until 2018. We also designed several website iterations  (although not the current one).

Shoutout #2  is for 360 Chicago, the observation deck at the top of 875 N. Michigan Ave  (formerly called the John Hancock Building).
360 CHICAGO
Another near casualty of the virus, it just  reopened on July 1st and offers one of our town’s most amazing views. Whether you’re up for Tilt, billed as Chicago’s highest thrill ride, or just want to experience the oohs and ahs of our  city 94 floors below, it’s a treat for the whole family. They’ve taken all sorts of COVID-related  safety precautions? so you can feel perfectly comfortable visiting.  Full disclosure: Iris does their  graphic design branding work.

Shoutout #3 is not a small business but an organization that advocates for small businesses  in Illinois. The SBAC (Small Business Advocacy Council) is a non-partisan, member-driven  organization that promotes the success of small business through political advocacy, support  services and educational programs.

the sbac website home pageIf your small business has benefited from Illinois’s reduced LLC filing fees or from bills that make it  easier for small businesses to compete with large companies in the same arena, you can thank the  SBAC. Aside from advocacy, it offers a wealth of resources including educational programs and  networking opportunities to all its members. We are active members.

We are also active in the SBAC Women In Business Group. And Iris is on the board of SBAC  Empower, an SBAC affiliate which promotes entrepreneurship and small business development in  economically-challenged communities with education and mentorship. Full disclosure: we did the  SBAC Empower website.

If you know of a Chicago area small business that could use a Shoutout, leave a comment and tell  us why. In the meantime, stay safe and enjoy the summer we’ve been dealt. It beats Chicago winter,  right?

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