The One Mistake Most First Time Entrepreneurs Make : Under30CEO The One Mistake Most First Time Entrepreneurs Make : Under30CEO
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The One Mistake Most First Time Entrepreneurs Make

| March 22, 2011 | 11 Comments
business advice

Photo credit: Krishna De

Are you creating something people will buy?

It’s a simple question, but I see so many first time entrepreneurs fail because they create something they THINK people want.

Finding out if a new product will sell requires market research, which can cost way more than a first time entrepreneur can afford.

Instead, here’s a simple, three step process that costs nothing, yet surprisingly is way more effective.

1. Find your market, then create your product

Most entrepreneurs do this backwards. They come up with a killer product, and then try and and someone to buy it. This rarely works. Instead, and your market (preferably one you are familiar with), and a need that isn’t being met or a problem that isn’t being solved, and create a product that satisfies that need or solve that problem.

For instance, let’s say you frequent laundromats. You see older women making two or three trips with laundry baskets. So you create a cart that can carry the baskets from their car to the laundromat so they only make one trip. And the cart is light enough to carry and its in their car.

Do you see how much simpler it is to create a product this way?

2. Real World Market Research

Now it’s time to see if your product idea has market potential. It’s time to ask people in your determined market to BUY your product.

Yes, I know, you haven’t created your product yet. But you need to ask people to buy your product to see if it’s viable. Most first time entrepreneurs will ask people, “Would you want this product?” The problem with this is best explained with an example.

Someone comes up to me and asks me if I’d like this new DSLR camera, with all these awesome features. I tell him of course I’d want something like that. But if he asks me if I’d buy that camera for $500, my answer will suddenly change. I don’t need to buy a new camera. I’d like a new camera, but I don’t want to buy one.

So, it’s time to use a test I heard of once before: the Trunk Test. You ask people in your market do they want your product. If they say yes, tell them you have a couple out in your car trunk. Would they like to buy one now?

You’re beginning to really test your product idea now.

3. Actually Sell Some

So people want to buy your product. Congratulations! You are almost there.

There’s one more step, and this is probably the hardest: actually sell your product. No matter how much market research, testing, and experimentation you do, you will never know if your product will actually sell until you sell it.

When starting, don’t make any large orders from suppliers. Keep orders small at first. Your per unit cost will probably be high, and you may forgo a profit on your first few sales, but this is better than placing large orders and no one buying it.

But, because you’ve followed the tips I’ve laid out above, I’m pretty sure you’ll be able to sell your product very easily.

Good luck with your endeavors and let me know if I can help you in any way.

If you’d like to read more from Brandon Yanofsky, check out his blog on small business marketing. He also has a bunch of free marketing resources.

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  • Marc B

    There are a lot of grammatical errors in this article.

  • http://www.collegeinfogeek.com Thomas Frank

    The first point essentially embodies the iron law of the market – if you don’t have a large group of people who want to buy from you, you won’t remain in business.

  • http://Under30CEO.com Jared O’Toole

    Sorry about that Marc…not sure what happened with the article but wordpress was randomly removing letters from some on the words. I probably fixed 30 errors already but obviously missed some. Sorry again

  • http://www.loveacoupon.com Dominic

    Ebay is a great place to test the demand and price for your product. Google Keyword Generator will also give you a very accurate idea. In addition, if there is no demand then the demand can be created but it will be more costly and more difficult to do.

  • Gene

    A very practical series of steps. Well Done!

  • Kenneth Lee

    Agreed!

    Very relevant indeed

    Kenneth Lee
    http://ideasforsmallbusinesses.blogspot.com

  • http://www.blistmarketing.com Brandon Yanofsky

    Ebay is definitely good. The keyword generator can only take you so far. There may be a lot of people searching for something, but are they really purchasing.

    But as research tools, they are definitely a place to start.

  • http://www.blistmarketing.com Brandon Yanofsky

    Very true Thomas. Still, so many companies miss this important law.

  • Chris Holehouse

    Hello,

    I’m the Business editor at Before It’s News. Our site is a People Powered news platform with over 2.5 million visits a month and growing fast.

    We would be honored if we could republish your blog RSS feed in our business category. I believe the content on Under 30 CEO would be a great fit for our readers.

    Syndicating to Before It’s News is a terrific way to spread the word and grow your audience. Many other organizations are using Before It’s News to do just that. We can have your feed up and running in 24 hours. I just need you to reply with your permission to do so. Please include the full name and email of the person who will be attached to the account, and let me know the name you want on the account (most people have their name or their blog name).

    You can also have any text and/or links you wish appended to the end or prepended to the beginning of each of your posts on Before It’s News. Just email me the text and links that you want at the beginning and/or ending of each post. If you know html you can send me that. If not, just send me the text and a link to your site. It should be around 200 characters or less (not including links).

    You can, if you like, create a custom feed for Before It’s News that includes multiple links back to your blog or web site. We only require that RSS feeds include full stories, not partial stories. We don’t censor or edit work.

    Talk to you soon.

    Best,

    Chris Holehouse
    Editor, Before It’s News
    http://www.beforeitsnews.com
    chris.h@beforeitsnews.com

  • http://Under30CEO.com Jared O’Toole

    Thanks Chris I just sent you an email

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