WHY your new business isn’t making money

It all comes down to 3 simple reasons…(which are built upon many more complicated reasons).

But let’s keep it simple, shall we?

1. You started the business before having customers.

It sounds like backwards talk, but I’m serious. This is probably the most common idiot mistake #1. People starting new businesses before having the customers for them.

Do you want a guaranteed successful launch? Then don’t start your business until you have the customers! Don’t put any money down for the logo. Don’t build the website. Don’t get the loan.

“But how do I get customers without a business?”

Ha! Easy peezy. Ask around. See who’s willing to buy. And I don’t mean in a silly “market research” way. I meant like really asking people and seeing who’s down to buy.

And if you need ideas…(ughh)

• Somebody already trying to hire you to do a certain task?
• You already have clients from another business and now want to meet their other needs with another business?
• You already have contacts with clients and buyers from your existing job?

Having customers BEFORE you start a business is absolutely key not only for having a starting cashflow but for knowing that you have a consumer group that sees you as an authority figure AND that you’re actually in touch with client needs. It’s so often that I see people starting new businesses without actually being in touch with customer needs. Even worse…they don’t even know where to find them! (ARGHHHH!)

2. You don’t know how to find customers.

Another simple (but critical) mistake. It’s bad enough that you didn’t have customers to start with…but even worse when you don’t know how to find them.

OUCH! OUCH! OUCH!

Most successful long-running businesses I see have a solid marketing formula already. They already get a regular stream of customers through word-of-mouth and referral…and/or…they know how to find new ones very easily.

• They know where to advertise.
• They know which demographics to target.
• They know which promotions to run.
• They’ve already done the test work themselves…or copied from their competitors/old-jobs.
• ….this makes their marketing ROI extremely effective!

Now what do the “don’t-know-how” people do?

• Blow tons of money on random advertising campaigns.
• Blow tons of money on SEO and social media efforts.
• Get more desperate with each attempt and make even more mistakes.
• ….if they ever figure it out at all, they’ve already ran out of budget once they do.

Oh great. No customers, and no budget for marketing. Then comes the next mistake…decreasing pricing and throwing endless sales…further devaluing the product. You almost get the feeling they’re TRYING to fail!

3. You decreased prices on a non-selling product.

Fawken horrible mistake! ARGHHHHHH! Don’t do this! It communicates the worst things about your brand/company:

1. That it isn’t worth what you’re asking for.
2. That you might have more discounts in the future (decreasing urgency).
3. That you might not even stay in business for long.
4. That you’re desperate and not desirable.

And of course…it’s when new companies are making huge discounts that they finally figure out how to market well. Hahahaha. Now the whole world knows you as that “cheap wannabe brand”. Oh *palm to my head*.

With all that last ditch promotional efforts…why not spend it announcing new features/changes in your product. Make it fun. Make it a celebration. Or hell…just chat about life. (It helps to communicate that you’re changing it to better fit customers needs, not changing it because you have no customers.) But for god sakes…don’t make it a garage sale!!!

Oh and DON’T YOU DARE do the add-features and decrease prices tactic! If anything, you should be INCREASING PRICES in a time like this. Sure, it sounds crazy but hear me out.

Let’s say your break-even point is $10,000. And let’s theoretically go over the ways we can convince total strangers to give you money…

• That’s 1000 customers times $10.
• Or 100 customers times $100.
• Or just 10 customers times $1,000.

I’m not even kidding. It is easier to convince 10 strangers to give you $1k than it is to convince 1,000 strangers to give you $10. And also easier to convince your existing customers to give you more money than to convince new strangers to do so.

So if your product ain’t selling…you may need to go towards a more premium offering. Load up more features and services and jack up the price. Or offer a more premium product next to your low-price one. It’s your only chance to be competitive. (In case you forgot…the idea is getting the sale by raising your product value. “Decreasing prices” will never accomplish that, ok?)

What to do if you already made all these mistakes.

Sure, Johnny…I learned useful things from this post…but I already EFF’ed up and now what do I do?

I’ll let you decide whether it’s easer to start over under a new brand, or simply re-communicate your existing one.

Start raising (your brand) value.

• Increase your prices.
• Add more services. (that people want)
• Add more features. (that people want)
• Increase your brand impact. Better design that speaks to people’s needs.
• Explain what you’re doing and why you’re doing it.
• Explain how you’re different from everybody else.
• Testimonials are nice.
• Fun social media stuff is nice.

A lot of my marketing experience has ultimately come down to learning how to speak to the unconscious mind. Most buyers don’t really know why they choose product A over product B.

• Why does Nike outsell Adidas?
• Why does Coke outsell Pepsi?
• Or McDonalds over Burger King?

When you figure that out, you won’t need my common-sense advice anymore.