So you have started your new business venture and you are excited as hell. Or perhaps you're just thinking of starting out. But where would you focus on first?
Prioritising the tasks that matter and focusing in the things that produce the most significant outcomes is often hard for new entrepreneurs. Setting up your blog, choosing your logo color and similar tasks might be fun to spend your time on, but have you heard of the 20/80 principle? What are the 20% of your actions that lead to 80% of the results? What does really move your company forward? It sure is not the logo or another blog post.
There are 3 crucial things that Silicon Valley start-ups are focusing on to dramatically increase revenue. And without optimizing these 3 things in your business, it will be very hard to impossible to scale up your sales and revenue. In this article, I will focus on the fundamental areas of your business that you need to figure out and polish before spending hours on choosing your logo color.
1. Understanding your customer segments (customer archetypes)
You have thought of an innovative product that will disrupt industry x, or you're just starting out your online business in a well established niche. You think you know who your customers are or how they prefer to be solving a particular problem. Think again. What is the evidence that says your assumptions are right? How many potential customers you have actually asked about their preferences, their habits, their burning desires and the way they want a solution served to them?
Often, a company starts optimizing their product with a specific customer in mind. What usually happens when you do intelligent market research though is might discover that your solution is desirable by multiple customer segments, that are hungry for your product or different variations of it.
Example: Let's say you are a life coach focusing on women and how to improve their lives. You have experience in both business and relationship coaching and you are wondering what it the direction you want to take your business to. Post a poll on social media asking women what do they struggle with. If you were thinking about going towards the business coaching but 80% of women replied they are struggling more with finding a significant other instead of building a side hustle, this is the market telling you that your initial hypothesis was wrong.
2. Optimizing your product according to what the customers want (and need)
So let's say you've asked tens or hundreds of potential customers about their pain points, the ideal solution to their problem and the way that would be convenient for them to implement such solution. Now you need to iterate and adjust the business idea in your head to what the market is telling you. To what the market actually needs. This is all about making the customer experience as comfortable and fun as possible. And providing a great value. Value that your competitors don't provide.
Another point is the optimization of the way you are selling. Customers NEED long term solutions but often WANT short term gratification.
Example: You want to sell a product or service that might not work wonders overnight, but will produce sustainable results for the customer in the long term. However, this is not a "sexy" enough description of your product. If you present specific metrics such as "get a cleaner skin in x days", instead of "learn how to nurture your skin on a daily basis", your client is presented with a time dependent argument that will resolve their problem, instead of a vague solution with no light at the end of the tunnel.
3. Driving traffic in a permanent manner
Now that you know exactly who to target and you've optimised your product + product description, you need to have more eyeballs on your product. For this, you need to have a permanent display of your product in multiple locations.
Just because your shopify store went live, doesn't mean the traffic will magically appear by itself. If you already have a strong personal brand in one or more social medial platform with thousands of followers, your brand could definitely benefit from the exposure. If not, you need someone else's audience to promote your brand.
Example: Affiliate partnerships with YouTube channels and blogs in your niche. Most influencers are happy to promote products in their niche, as long as there is a mutually beneficial collaboration in place. This would be considered a "free" channel as there are no upfront costs and the only costs you will have to bear are the affiliate commissions, something that pays for itself as you are making sales.
Another way to go about it would be of course to pay for ads, but before exploring this option, you'll have to explore all the free available routes to maximize your revenue.
Think of these 3 aspects as an algorithm that needs to be place in order for your business to take off. By fine-tuning each parameter and iterating as you go according to what he market tells you, you basically become an evidence-based entrepreneur.
You gather evidence about what the market wants at each step of the way and you pivot according to what's the fastest way to generate & increase revenue. Entrepreneurs that fail and pivot fast are the ones that eventually become successful, recession proof and profitable, being able to scale up their business and bootstrap the next entrepreneurial idea.
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As a serial entrepreneur, a start-up co-founder and a PhD candidate, Elena Seranova offers 1:1 mentroship on business development to help you scale up your business or side hustle by optimizing time and money management, your decision making skills and leveraging the evidence-based entrepreneurship principles to bootstrap your next success story. Book your FREE, no obligation, 30 min strategy call here.