People talk about “Balance”. Work-Life balance. Nature is said to be “in balance”. Or you can have a “balanced outlook”. There is balance in business too: between what you like to create and what your market likes to buy.
Obviously if what you create isn’t any part of what a market likes to buy then you don’t actually have a business. Not long term, anyway. Not many people buy Pet Rocks any more, though we knew that was a fad from the start. Not many people buy film for cameras, cassette tapes, VCRs and a huge list of “no longer popular” things that were once considered vital.
It starts right at the beginning, when you are developing your product – as much fun as it sounds to get paid to have fun you need to make sure that there is a market first. Not many people bother to check, and most of those who do just ask their mother and their best friend “If this is a good idea”? What I mean is people who will say “Of course it is”, not matter how bad an idea it is because they don’t want to offend you.
That just condemns you to join the ranks of those who start a business, put all their money into it for a couple of years (until all your money is gone), then they shut the doors and walk away. That’s the most expensive way to discover that there is no market for what you sell. There are other posts in this series about doing market research that is very cost effective, so I won’t duplicate that here (It can be no financial cost, just a few hours of your time).
Now you know that you are producing something that there is a market for. Where will you source your raw materials? These are the building blocks for your product, and by the way: if you provide a service then the team you have that helps you deliver those services can be seen as your Suppliers, its just that they supply you with trained people.
You need to treat your suppliers well – pay a fair price, and act as though they are partners in your business. That’s because they are partners. Without you they have no place to sell, without them you have no place to buy. Yes, there may be other sources for the same thing, but if you treat them badly and they stop trading with you then eventually you run out of people to do business with.
That leads to the question: what production facilities do you need? Imagine a boom starts – can you supply everybody who wants what you sell? What if a bust comes along – can you survive?
It helps to have a plan for the business and to monitor that plan in action. That gives you controlled growth, and if you are monitoring the right metrics you get an early warning of any slow down. That then allows you to scale up or down without any panic. Other posts in this series discuss planning (even if you don’t like planning, or maybe especially if you don’t like planning!) and which metrics you should measure, why and how. It’s easier than you think!
The next post will continue looking at your production: your storage requirements, your team and the technology you need.