The biggest mistake a business can make – and how to avoid it

Are you planning to make the biggest mistake a business can make?

One of the most common cries from small business owner’s is “how do I find more customers”? You know that feeling of being lost because you have sourced or manufactured your product or set up your service and now you are unsure of how to get the market to buy it from you.

Have you started your business backwards?

If you have started in this order you have indeed started your business backwards and you now need to quickly reverse your strategy and go back to the beginning before you waste any more time and money. Of course, if you haven’t yet started your business then you are in a very strong position because you can take the steps in the right order to ensure that you can attract customers easily and avoid the biggest business mistake.

So what is the right order?

You need to realise that finding the market is the first step to starting a small business not finding a product or service that you want to sell.

That’s right – although the industry you are going to do business in is likely to be fixed in your mind – it isn’t about your idea or what you are good at doing that should lead your business idea but finding a market that has a problem they are willing to pay to solve, then you provide the solution for them. In other words sell what people want to buy.

If you find out what customers want to spend their money on within your industry and provide it for them then you will find that you can attract them to your business much more easily.

The business should reflect the customer

You are making the biggest business mistake when you have decided on a business name, business structure and even set up a web page before you know if there is market for your business and who your potential customers will be. This is definitely not the right order to do things and it is expensive. Instead the business name and most decisions about the business should reflect the customer and their preferences and you can only know what they think when you know who they are.

There are many examples of businesses working the right way

Successful businesses which have found the market then produced a solution to it are everywhere. Trade Me started because there was a market for trading second-hand goods on line but no service to solve the problem. Uber didn’t organise a fleet of vehicle drivers and hope there would be customers to use them, they saw the market and the need first and then set up the solution.

You need to focus on your small business idea in the same way and find out if there is a market and whether it is big enough for your required level of sales before you decide to get underway.

For a start you will save yourself a great deal of money and time if you find your market first – just in case it isn’t as large as you need it to be. And you avoid the marketing trap of “hunting the customer” because you’ll know exactly who they are and where they are and with a great marketing plan you should be beating them off with a stick (or better, satisfying their needs and wants and making a great return.

Don’t give up now

About now a number of you will be thinking “I just want to do what I am good at and I don’t know anything about marketing or finding markets so I think I’ll just skip this step”. Sadly, if you do then your chances of having a successful business are considerably reduced. And you will have made the biggest business mistake. However, if you decide to read on and then take some action with the tips I will provide then your odds of being successful will increase greatly.

Finding target markets is not difficult

Finding your target market is relatively easy in our digital world because it is very cheap and easy to do market research on-line. And doing research is where you start. This is great because to stay successful in business you need to be constantly researching so getting good at it now will be an enormous help.

What problem or problems do the customers have?

Within every industry there are a range of different customers who are looking to have their problems solved. Think about the health care industry where customer’s problems range from needing to make changes to reduce their likelihood of premature death to customers who want to have more energy to get through their stressful days.

If you are considering going into business in any industry then you need to know what problems are the ones that these customers are most prepared to pay for solutions to. Check out the questions that people ask Google in this area and find out what they are talking about on forums and social media.

You need to find the customers who have the most to lose if their problem isn’t solved because these will be the most motivated buyers. Then you can focus on how you are uniquely placed to solve it.

Who else is trying to solve this problem?

The next kind of research to do is to find out who else is selling to this target market. Look at their websites and get a feel for how they are engaging with their customers. You can probably find out a lot about their pricing too. Think of different key words to use in your search and many more businesses are likely to show up. Keep being nosy until you are sure that you have a good overview of what others are offering.

If you find that lots of others are already doing what you thought was a unique idea, don’t worry – that probably means that there is a wonderful big market to tap into.

Once you know who your competitors are you can see where each of them fits into the market and look for a gap or gaps where you position yourself to solve the customer’s problems. Don’t forget to check out alternatives which customer’s may buy too.

Describe your customer clearly

Now you need to observe your potential customers. Many people hang around on-line sharing information every day. You will be able to find forums about your industry and read up on what potential customers are saying. You can ask your own questions too but remember you are researching not selling so keep an open mind.

Community or group pages on Facebook will give you an opportunity to discover what possible customers are concerned about or supportive of. LinkedIn has many groups you can join and you will be able to find out much more about your potential customers on other social media too.

Once you have observed the potential customers and the problems they identify then you need to describe them. When you are describing your customer their gender, age and location are often good starting points to clarify your focus but the more detail you can describe about them the easier it will be to target your business towards their needs.

It’s also easy if the selling is done off-line

If you are selling a product or products off line then it is easy to visit your potential competitors at markets, shops or food outlets and see how busy they are and how many of the public are buying. You can hang around in Malls and count the customers going in and coming out of stores with purchases for example. You may have to drink a lot of coffee while you’re being nosy but you will get real information.

You may have seen a shop or market stall that looks attractive and thought – I could do that – but the reality may be that they are struggling because there just aren’t enough customers buying their goods. Knowing that before you get underway will save you real heartache and avoid making the biggest business mistake.

Check out the information that’s already been collected

Every four years the Department of Statistics collects data from households via the Census and then makes the information collected available free of charge.

You can find out such information as how many families live in a particular area and what the average income is. You can find out how many of them work and how they travel there. The amount of information is fantastic and all you have to do is visit their website and start exploring. They also collect information about businesses so you can research this area too if that’s the data you need.

Do a survey

If you find that there are particular questions you need answered to really understand your potential market then you can prepare a questionnaire and ask your on-line communities to complete it for you. There are many free applications available to help you with the questions and they will format it beautifully too so it is easy for your prospects to answer.

Again, don’t mix selling with research – remember you are looking for information about your potential market not for customers. Be sure to make your survey short – people are busy and are more likely to answer if it only takes a few minutes to complete. And you can continue to do surveys asking different questions as the need arises.

Match your business to your market – the next step

Once you have collected as much information as you need you can use it to design your business and it’s uniqueness to match your ideal customers and then put a marketing plan together using the language they use and the places they look for information in. Every dollar you spend on advertising can be targeted precisely to the people who are most likely to buy your product or service once they know that it is available from you.

Never forget your customers

To avoid making the biggest business mistake you need to stay focused on solving a problem and knowing exactly who the customers are who have this problem and are prepared to spend money solving it.

For example, a few years ago there was no need for dog-walking businesses or doggy day care operations but with the pace of life that many people now try to live there is less and less time for caring for pets appropriately and these businesses are everywhere.

I recently read that there is even a dog sharing business for people who can’t own a dog but want to spend time with someone else’s pet just to get their doggy fix.

However, if you are thinking of going into the pet care industry you don’t want to waste your time trying to sell your service to someone who doesn’t have a dog or who loves to walk their dog everyday themselves. Instead you will want to target the market of busy dog owners who need your unique service to solve their problem.

Focus all your communication on them

If you match your business to your market then your business name and how you present it via a website and social media will be able to reflect the preferences of the people whose problem you are able to solve. This will ensure that your message stands out from all the other general messages which other businesses are sending out every day.

By matching your business to your target market you ensure that there are enough customers to meet your financial goals and that they feel a connection to your offering because you seem to be talking to them directly. Which is exactly what you are doing.

Yes, it is going to take time

All of this research takes time of course and it is the reason that so many small businesses don’t bother to do it. They get stuck into developing the business and then go hunting for customers without knowing who they are likely to be or how to make contact with them. It may seem that you are saving time by not bothering to do research but the long term cost is often measured in the lack of success in your business. That’s why I call it the biggest business mistake.

If you decide to put the effort into finding your market and who your customers are before you start your business you will find it pays off by ensuring that your business is much more likely to be successful and that the money you spend on marketing brings in the sales which are the reason for being in business. As business guru Peter Druker said “The purpose of a business is to create a customer” and finding willing and able customers easily is what every business wants.


It is so much easier to match a business to the people who already want the solution that it offers rather than trying to find customers to match your business idea. Imagine how easy it will be to find customers, satisfy them and to keep selling to them.

A warning

Some of you reading this will be turned off by the idea of researching – but if you want to avoid making the biggest business mistake hopefully I have convinced you that you need to do it any way. Some of you will think this is a wonderful idea and you will get stuck in. You’ll make notes and seek more and more information but just be careful that you don’t spend all your time on researching other people’s businesses and don’t put the time into making yours a reality.

You can learn a lot from studying the market first but you can also get so caught up in discovering everything there is to learn that you may forget that you will still be learning even when your business is established. Decide on the deadline date to finish checking out the market and stick to it especially if you are someone who thinks that everything should be perfect before you start.

Businesses are ever-changing and you will find that research continues to be part of your role of working on the business so make sure you are efficient and effective when you do it.

So here’s the checklist for avoiding the biggest business mistake by finding your customers first

  • Make it your goal to sell what people want to buy
  • In your industry, establish what problems customers want to have solved
  • Check out who else is trying to solve these problems
  • Learn as much as possible so you can clearly describe your potential customers
  • Utilise websites that offer information they collect such as
  • Do a survey to find out more
  • Ensure every aspect of your business reflects the customer
  • Focus all your communications on these customers
  • Tell them how you can uniquely solve their problem

Go on, get started. You’ll find out it’s actually fun as well as the best way to avoid the biggest business mistake. Good luck.

Leave a Reply