Rolfe Larson is on vacation. This blog was written by guest writer Jan Cohen.
When you start a new business, whether for profit venture or social enterprise within a nonprofit, you’ve spent a lot of time and effort on the business planning process. And now you are ready to “execute”. The start-up period always has surprises. This two part series shares five lessons learned from working with many business ventures.
1. Your market research, no matter how diligent and thorough, could be wrong. Without thorough knowledge of the actual business you may have interpreted facts or data incorrectly.
- It is commonly interpreted that “Waiting Lists = Demand”. But in some businesses, there is a reason for these waiting lists that doesn’t translate into business for you. One example: the competition has a “known” provider or product that people want and substituting you is not of interest to them.
- What looks like huge demand could be a temporary surge or interest due to some event or environmental or other factor, rather than a sustained level of demand for the product or service.
2. The economy changes and customer ability and interest and ability to purchase can change dramatically.
- When the economy changes as it did two years ago, people may have less need or ability to utilize daycare and other activities for children or pets, restaurants/catering or other services and products. The continued high unemployment rate that is affecting people’s spending dollars now was not forecast two years ago.
- If some of your target markets are public agencies, their budgets are also related to the economy. For example, school districts in California had ample budgets to purchase many products services two years ago that they are not purchasing now.
Next blog: Marketing Lessons Learned
For more resources, see our Library topic Business Planning.
Jan Cohen has been a consultant and social enterprise practitioner working with nonprofit organizations for more than 25 years, focusing on earned income strategies and business venture development, start up, and management. More information at LinkedIn or email.