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Entrepreneurship is filled with great moments and low moments. One moment, you may believe you have figured it out and the next moment, you may be wondering how you missed a new trend or, worse, how you lost your customers. Prospering as a business against all odds is a very intentional process, and there are certain steps you have to take to prosper. Let me share some I have learned from my experience and years of research:
Build Great Products That Customers Love
In my book, Make What Customers Want, I explained how to make products customers want to buy. As inflation kicks hard, consumer disposable income won’t be able to buy as much as it could in the past. This means people will focus on what they really need and what they want. Many entrepreneurs focus on products they personally love, not what customers want. For example, you’d be surprised that some customers will still spend money on cigarettes over vegetables and fruits. It’s naive to assume that because your product is healthier for the client, they will pick your product. Customers buy what they really need and/or want. In this example above, the customers will always buy food because it’s a necessity but they may not buy fruits.
Now, this doesn’t mean there is no market for fruits and vegetables. In fact, some customers may buy both cigarettes and fruits. However, it’s inappropriate to expect customers to make rational choices or think like you. The true needs and wants of the customer should determine the products you create. After ascertaining these needs and wants, create the best possible product to meet them.
Don’t Be Afraid to Increase Your Price
With rising costs and inflation, customers understand the need for fair price increases. However, it’s risky not to increase prices when customer sentiment understands price increases, only to increase it when the inflation storm is over. For example, your competitors increased their price to stay afloat but you played the wrong card and swallowed the losses until you couldn’t anymore. Months after some customers stayed with you mainly because of the low price, you increased your price, at that moment, the customer sentiment for the price increase is gone. They will assume you are increasing your price unfairly since you survived even when inflation was high. It’s important to understand times and seasons.
Focus on Profitable Products
Some entrepreneurs choose to keep unprofitable products because they have some attachment to them or they think shutting down the product means they have given up or failed. This is because many entrepreneurs have forgotten that they are in a for-profit venture. Revenue doesn’t always mean profit. A product may bring revenue and remain unprofitable. Unless it’s a strategy to complement another product that is profitable, it’s a mistake to keep unprofitable products. The resources invested in unprofitable products are a waste. If customers truly love your product, they will be willing to pay at a price that keeps you profitable. Sometimes, the product needs to be rested while you invest in new technology that makes production cheaper, thereby making the product profitable.
As an entrepreneur, you must remember that 50% of all businesses will fail. To ensure you’re among the 50% of businesses that survive and thrive, you must take intentional steps that ensure you stay profitable and loved by customers in good and tough times.
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Feature image by Andrea Piacquadio from Pexels
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