What constitutes a good idea for a startup business, Part 2

 

Low marketing costs.

Another important criteria for a good idea is low marketing costs. Let’s go back to the pen vs. PR comparison. To make money in the pen business, you’ve got to convince millions of consumers to ditch their current pens and buy yours. You can accomplish some of the marketing by convincing a few big retailers to carry your pen, so consumers will see it while shopping (that’s called “push” marketing). It’s not easy to get them to carry a new brand, but let’s say you do it. To be successful, you probably have to get customers talking about the pen, and looking for it when they shop. That will probably require advertising and promotions, which are expensive (aka “pull” marketing). You may even have to hire a PR firm!  Speaking of which, marketing costs for a PR firm probably consist of you making sure everyone you know is aware of your services, chatting up prospects at every event you attend, and pounding the pavement to generate as many client pitches as possible. Cost? Not much.

Many businesses with low marketing costs are driven by in-person selling. Another benefit of this approach is that you get direct, immediate feedback. If your pens are not selling, it’s tough to know why. Maybe they aren’t displayed well in stores. Maybe customers don’t like the way they write or the way they feel. Maybe they’d sell better if they were just a few cents cheaper. Since you can’t be there in every store to see what’s happening, it’s tough for you to know for sure. But when a client rejects your PR pitch, you’re there to ask why – and potentially to persuade them to change their mind. You’ll also be able to change your pitch immediately, so you’ll be more successful the very next day (as opposed to changing the packaging / pricing on your pen, which will take months).

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One Response to What constitutes a good idea for a startup business, Part 2

  1. […] (more to come shortly). Got your own criteria? Please comment!!! Possibly related posts: (automatically generated)What constitutes a good idea for a startup business? (Part 4)Top 5 business plan (content) mistakes4 keys to successful business planningStartup Techniques: Qualifying Your New Business Idea (2) […]

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