You’ve successfully accomplished your goals of establishing a small, start up business. You’ve heeded all the money and marketing advice you could find. You’ve reached your total goals for consumers within your area. You finally feel like you “made it” in your business entrepreneurship adventures. Only one thing is keeping you from breaking through the glass ceiling—making a profit or at least breaking even on your bank statements. Many small, start-up businesses successfully reach out to the appropriate consumers and market there product in an appealing manner. Although they might reach the targeted number of consumers and things seem to be running smooth, the business might still be headed for a crash. After the first wave of preliminary interest dies off and the long term solidified group of consumers is evident, the business owner might have to reevaluate the market and his or her options to stay in business.
The first step after the initial wave of introductory consumer is to determine the total revenue from the market equilibrium price in relation to the consumer number. Although a new business owner’s first move might be to increase prices to cover the cost of the lost demand. This will only push away the remaining customers and deepen the deficit of revenue for the owner. The owner needs to evaluate several factors for why the returning customer percentage was so low. Several factors such as offering a low introductory price, incorrect marketing of a product or service, or simply overall temporary inflated demand. For example, many customers will purchase a product at a low introductory price with no intention of returning once the deal ends. The owner must do some mathematical calculations to decipher the total amount of revenue needed from returning customers in order to sustain a business. The new number of current revenue in often inversely related to required revenue for sustainability. This is where “creativity” comes in and saves the day.
In order to take control and prevent collapse, the owner must search out new venues of untapped consumers and marketing options. This is often something that takes a lot of time but is well worth investing in for sustainability. In other words, you have to go outside of the established network to keep the business afloat. Sometimes this involves traveling to new cities for marketing, establishing a second location if the venue is free, rework the wording of ads—the list is infinite. Because the owner is going outside of the original consumer base, a new initial wave of introductory consumers must be considered, as not every new consumer from other bases will be a returning customer. However, the introductory consumers from new areas will give a short term boost to the revenue and help sustain the business for a short time.
After taking the necessary steps to expand the consumer base, the business should successfully settle into financial stability. Because the owner recognized the financial problem, evaluated the actual verse desired revenue, and took creative measures to broaden the consumer base, the business revenue will hold to a pretty steady revenue rate. Although the business will experience several introductory short term consumer boosts, the funds received from the initial interest must be invested and slowly distributed within the business in order to create long term stability. Ideally, these short term revenue increases will hold the business steady until the true return customer rate can be determined. Although a business owners require many qualities such as savvy marketing or determination, only those who are creative will experience a taste of the good life.