Page 10 - How To Avoid Going Bust In Business

3: The solution. How will your product or service solve the customers’ problem?

For instance:

Problem: Many tourists want to avoid doing the standard mass-production “touristy”
things at a destination.

Solution: I’ll take them on personalised tours that show them the way a local sees
the place.

4: The path to the market. When I was running a tour business I would often have
hopefuls come and talk to me about their great idea for a tourist attraction.

One of the first questions I put to them was: “What’s the path to the market?” In

other words, who are your customers and how will you reach them?

Marketing is a massive subject – whole books have been written on nothing else –
and it is beyond the scope of this book.
Your business plan should, however, have a clear vision as to its target consumers,
and the plan to reach and attract them.

5: The competition. It’s a (sad) fact of business that there is always competition.
Competition for the customers’ time, attention and especially their money.

Who will be your competitors? What advantages do they have over you? How do
their products/services differ from yours? What is your Outstanding Point of
Difference? In other words, why should I buy from you instead of one of your
competitors?

It’s not always about price. If it was, Mercedes would never sell a car. The pointy end
of the plane would always be empty.

It’s about perceived value. And that’s not necessarily actual value. Why else do
people pay $2000 – and a great deal more - for a watch that gives them no more
accuracy than my $20 timepiece?

More and more these days it’s about convenience. When I have to refuel my car I
could save 5c a litre by driving an extra couple of kilometres. So on a typical 45l fill
I’d save $2.25. Yeah. Nah. Not worth the time.

It could be about a higher standard of service.

The business I currently run is based on the realisation, having used my competitors’
services earlier, that their service levels were rubbish. They gave me the impression
they really couldn’t care whether I bought from them, or not.

They looked like easy-beats and they were.

I now have a million dollar-plus a year business in that field and all they can do is
whimper. (That, by the way is turnover, not profit. I wish.). I did it by offering my
customers outstanding levels of service. Nothing is too much trouble. Sometimes I
even take a loss on a transaction because I stuffed up in some way, but I want my
customer to get what they expected.