Editor’s note: This article was first published in July 2018. Google AdWords was renamed Google Ads in July 2018, the month of publication, and the advertising tools mentioned reflect 2018.
It’s hard to explain what the keys to success in business are today. Clearly, every business is different. It’s also true that the way business is done has changed. But it’s even truer that it still comes down to the same thing as 1,000 years ago.
If we had to sum up in a few words what we need to succeed in creating a business, we could say something very obvious: have a product and a market to sell that product to. If we have both, we already have a profitable business, right? The truth is that’s not entirely correct; one more thing is missing.
What do we need to succeed in business?
1. A market
Here we’d have the eternal debate: do we create a need, or look for a market that already has one? Most entrepreneurs want to come up with the great innovative business idea, but the truth is that innovative businesses are harder to make thrive. The explanation is simple: there may not be a market for the product yet, as was the case with tech companies before 2000. The market wasn’t yet ready to take up technology and certain services at that level.
That’s why it’s much more feasible and profitable to look for a market that is already demanding or consuming a specific product. This is the philosophy of the businessman Richard Branson. The Virgin Group simply watches a market, looks for customer dissatisfaction and creates an improved product or service. That way it avoids having to open up a market and instead meets demand that already exists.
2. A product
Now we need a product or service to meet that demand. Here we get into another debate: do I compete on price or on quality? If your battle is going to be fought on price, you should know that you’ll very probably make money in the short term, but that over time nobody in that industry will make money once a price war starts.
Many successful business owners have shown time and again that aiming your product at a minority willing to pay more for good service is much more profitable than aiming it at the mass market that only looks at price. In fact, when you aim your product at people willing to pay more, with fewer sales but higher profit margins, the company tends to give you fewer headaches.
And the most important point for business success
Once we have a market and a product to meet that market’s needs, we still need the most important thing:
3. The capacity and skill to bring the product to market
We need the capacity to get our product to this market, because if we have a good product and there’s a market, but we can’t make it known or reach our potential customers, we really have nothing.
But I’ll go further. It’s not just about reaching potential customers. You also have to reach them in the right way, with a message that sells.
How can we bring our product to market the right way?
Clearly there are countless forms of advertising today, some more effective than others. From Google AdWords to Facebook Ads, well-targeted campaigns can mean that with very little money invested in advertising we can get big returns.
How to grow our business quickly
At this point I’d recommend reading some tips Tim Ferriss gave us, explaining how to make a business more profitable in less time and double its profitability.
On the other hand, we can’t forget that a company can’t stand still. In fact, for a business to be profitable in the long run, it needs to grow by 20% a year on average.
If you don’t have much money
We’ve also explained how to start a business with no money.
Finally, if you’re getting started in the world of business, there’s no better way than learning from those who have already succeeded in it. That’s why it’s worth studying the business lessons of successful entrepreneurs.
Featured image: aeroprints.com, CC BY-SA 3.0, via Wikimedia Commons.
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