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Find a gap in the market – and meet it

Find a gap in the market – and meet it

This article was written by Ed Hatton for the column the Start up Coach and published by the South African edition of Entrepreneur magazine in March 2011 and is posted here by their kind permission.

Responding to a need is a great way to start a business, but it is not as simple as it seems

The Challenge

An entrepreneur has recognised that government departments and some private companies often pay their suppliers very late, or make wrong payments. Together with her spouse who runs a human relations consulting firm which is fully accredited with ETDP-SETA, she has the knowledge and expertise to set up policies and train people to fix this problem and so improve service delivery. However she has not be able to form a strong sales and promotion strategy.

Our response

This woman dreams of becoming an entrepreneur while she runs the department which pays suppliers in a large company. She sees entrepreneurs struggling to get paid on time by government departments, local authorities and some large companies.  She knows she could put the right policies, processes and training in place to turn the situation around. Her spouse could do the training and the combined service would enable departments to make payments on time. President Zuma, in his State of the Nation address suggested that this improvement in service delivery was vital, so the need for the service is there.

Who has the need?

This business opportunity looks like a textbook case of identifying an unmet need and having the capacity to fill that need. But, and this is a lesson for all entrepreneurs, first ask who has the need. For instance consider out of order traffic lights. The motorist desperately needs them fixed, but the duty pointsmen earn their living from them. The roads department is judged on performance but has harsh budget restrictions, so they may have mixed feelings. The point is that answering a need may have to include appropriate strategies if the party with the need is different to the party who will pay.

In this case the suppliers who are not getting paid on time or at all have the urgent need. But she can only work with supplier payment departments which want to improve performance. If they are in denial it will be difficult for her to succeed, because accepting her service may be seen like an admission of failure.

Requirements for a launch

To launch this business she needs to research key contacts, test her concept and plan an approach. This formula works for any entrepreneur thinking about a new venture – first check if the pool has water in and is free of crocodiles before diving in the deep end.

First she researches the right contacts, those with the desire to fix problems and the capacity to do something about it. This means finding real crusaders for improved service delivery, committed managers and politicians who sincerely want to make a difference. This is easier said than done because everyone professes to be a champion for improved service delivery, so she needs to be creative and use her business and personal network to identify the right people to approach.

Will it work?

Then she needs to check whether the need she is planning to address can actually be resolved by her service. This means she will have to find a receptive manager of a supplier payment department who is prepared to discuss their issues and needs. She will need to probe the problems and errors in a non threatening way, making sure that the manger she speaks to does not become defensive.

Finally she needs to plan and execute an approach to the key players, the easiest of these tasks, but one that is so often done badly making the entrepreneur appear disorganised and inefficient. She needs to imagine herself in the place of the contact, to think about what the contact will want to hear, not what she wants to say. What concerns and reservations will they have, what do they need to know? Costs, time frames, involvement of their people, other issues? Then having decided what to present she should structure the approach, probably an e-mail followed by a telephone call, and any material that the needs to present.

And then, and here all entrepreneurs are smiling and thinking back to that magic moment as they read this, she gets to savour that unbelievable heart-in-the-mouth instant when her business dream becomes a reality.

© copyright Entrepreneur Media SA (Pty) Ltd. All rights reserved. No part of this article may be reproduced, stored in a retrieval system or transmitted in any form without prior permission of Entrepreneur Media (Pty) Ltd.  Permission is only deemed valid if approval is in writing.

 

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