Which Distinctive Category Are You Happy With?

Every day, thousands of people set up their businesses. In many countries starting a business nowadays is actually easier than ordering a take-away pizza, and people are actually paid to do that – there are various funds and subsidies. At the same time – every day thousands of companies go bankrupt!  According to various statistics, only fifty per cent of businesses survive the first three years. So, out of the hundred companies set up today, only fifty will be on the market in three years’ time!

And out of those fifty companies:

• 1% of business owners become super successful. They own massive villas in Ibiza with infinity pools, and fly private jets.

• 4% make a lot of money. They fly business class and sport Louis Viton bags.

• 15% are getting there. They drive a Ford but hope to buy a Land Rover by next Christmas.

• 60% are more or less OK .Probably less than more, though. They keep saying that money is not the most important thing in the world.

• 20% are struggling to survive. Sooner or later, will go back to regular jobs – typically with a large debt to pay off.

Don’t take the examples too seriously! I just wanted you to imagine those lifestyles. And although both you and I know that the best things in life are for free, once you decide to set up your business – you start working towards ending up in one of the above – mentioned groups, IF you survive the first three years, that is!

Unless your goal is “to be more or less OK”, or you enjoy the struggle, you need to act differently than the 80% of entrepreneurs that make up those two distinctive groups!

Am I sharing those gruesome stats to scare you off?
Far from that! Although I want you to dream BIG and set yourself ambitious and super exciting compelling goals, it is important to confront your goals with reality and being aware of those stats should help you

  1. Decide which group you’ll belong to
  2. Take focused action to get there.
  3. Learn and tweak your approach until you succeed!

It is not going to be easy, but it is going to be worth it!

Decide now: Which group will you belong to?


People Always Look for the Lowest Price

That’s what many business owners say – especially if they don’t make enough money. It is true – the great majority of people look for promotions, special offers and hot deals. They are typically people just who can’t afford top quality products or services, which just must cost more. Nothing wrong with that. Our potential market is made up of a number of segments, and you should know which segment you’re in.

The people who look for bargains typically don’t make loyal clients. They just go where the prices are lower without giving it much thought. And there will always be someone who will be ready to offer lower prices than you! So think twice before you decide to go that alley and compete on price.

Kevin Maney, the best-selling author of “Trade-Off: Why Some Things Catch On, and Others Don’t” writes about the conflict between quality and convenience, which each entrepreneur should understand. The book is fascinating; Mr Maney gives numerous examples of products and services you and I use every day. He helps us to understand how consumers and customers make purchasing decisions. The message is pretty straightforward: Your client looks either for the lowest price or the highest quality. And you need to decide which group you are selling to. 

Most business owners think that they should be offering the highest possible quality at the lowest possible price – and they are fucked! Why? because they are too expensive for clients who want the lowest price, and not good enough for those who need top quality. Does that make sense? 

Another misconception is that everyone is price – sensitive.

Believe me – not everyone! In some situations, I am not! And I am not writing it to impress you. Let me just give you two examples:

  1. Two years ago, I was looking for a fitness coach. I wanted someone who would help me get back in shape. I contacted a few personal trainers, and all of them seemed to assume that I was looking for the lowest price. And in fact, my priority was completely different – I wanted the top quality and didn’t mind paying more! None of them even asked what I was looking for – they just assumed that it was the best deal that I was after.
  2. I decided to take my partner to Mexico at the beginning of last year. And as it was a special occasion, I wanted to make it BIG – with all the extras! The agent I was on the phone with was talking about “reasonable prices and the times of the year when it was cheaper to travel”. She didn’t ask what trip I wanted, what was important to me – if she had, she would have known that it wasn’t the lowest price!

What do your clients look for?

How do they make purchasing decisions?

What do you do to find out?