Look, I believe in giving excellent services or products away to people.  I think that’s the best way to get your business going.  After all, giving people a taste of what you offer is a great way to take the risk out of their minds.

I know if I were presented with a product I could try first and one I couldn’t, it would be an easy decision.

At some point, though, you have to start making some sales.

If you don’t, you have a hobby, not a business.

Paying Markets

I have talked about doing market research a few times on this blog.  It is the most critical thing you should do before starting your own business.

Many people fall prey to the assumption that just because they have surveyed potential customers and the feedback was pretty good, they have a viable business.

Make no mistake, until you are receiving money for your service or product, you do not have a viable business.  Getting that customer to hand over money or enter their credit card information is the only way you know.

You might be thinking that earlier I mentioned that you should give some stuff away.

Yep.  I did say that.  But there are a couple of good ways you can make sure that you are getting a high test out of your market before you invest too much time and money.  After all, if you are going to fail, you need to fail quickly so you can move on to something else.

Markets

State Prices While You Give

This is a great, non-invasive way to let people you know are not always going to let them get a free ride out of your product.  If you offer a service, telling them your average rates is vital.  It lets the customer know that, while they are getting a free sample, if they like it they are going to need to pay for it later on.

Freelancers have to do this.  Otherwise, they just end up doing favors for people all the time.  Favors are great.  I do favors for lots of individuals.  But favors don’t pay the bills.  You are doing work.  Let them know up front that, eventually, you will require a fee.

If you are worried that fees will scare off customers, then you are not offering a valuable product or service.  So, save yourself the bother later on and get pricing out of the way early while providing a little free action.

Upfront Payments

This one is awesome.  It eliminates risk on your part and can be an excellent way to launch a new business.

If you have some expensive costs to get started such as web development, deposits, getting the product, or anything else that comes to launching a company, you need to take a look at getting money up front from people.

One way to do this is to offer your product or service before it is even ready to go.

What?  How do you do that?

Simple.  Put together a presentation.  It can be a powerpoint or keynote thing.  I’ve even seen it done on nothing but notebook paper.

Make an offer to a potential client.  You tell them what your product or service is and show them the pricing you are thinking about. If they like the offer, you say that if they pay for x number of months of your service or x number of products you will give it to them for a discount.  Offer them 15% off if you want.  And tell them that you will never increase the price.

By doing this, you can get a real grasp of how likely people are to buy from you.  Not only that, all of the sudden, you have your startup capital.

Some of you might be thinking that this is selling snake oil.  No, it is not.

Upfront Payments

If you are going to invest your time and money into a business, you are taking a risk.  If customers in your market want your product, they are going to pay anyway.  Getting some of the money up front isn’t unethical.  It’s outstanding business.

The good news is that if no one wants to pay what you’re asking, you know you either have a bad product or bad pricing.  Either way, make some adjustments and try again.

If no one still wants to pay, you don’t have a viable idea.  No big deal.  Just move on to the next thing.

Action Step

Get out there and talk to some potential customers.  If you make cheesesteaks, give people some samples and ask them if they would pay x dollars for your food.

If you offer some consulting, tell people how much you charge per hour after they get x number of hours for free.

Try one of these methods out and see what happens.  Then let me know about the results.

Good?

Cool.

By | 2017-07-17T04:57:30+00:00 July 17th, 2017|Blog, Shopping|