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6 Essential Questions to Ask Yourself About Your Product and Market

Here are 6 fundamental questions, the answers to which will – if adopted – increase the likelihood of you successfully building a sustainable and fruitful BAM enterprise – one that impacts along the four bottom lines: financial, environmental, social and spiritual.

1. Is there a real market for my product or service?

The first critical question is, is there a real market for what I intend to offer? Who will buy it? Research is essential to understand fully what your customer needs or wants and how you will meet or even exceed that need. To do this you should develop a value proposition: what value you will your product/service bring to the customer that helps either move them away from a pain, or draws them towards a benefit?

Successful market entry usually does one of two things:

a. Provides a new and innovative way for a customer to use a product or service that will save money and increase efficiency and productivity, or

b. Provides existing products or services at a cheaper price.

A value proposition articulates why customers need the product or service. With no need, customers will not pay, and without sales, there is no business. – Larry Sharp, IBEC Ventures

A value proposition must cover the following:

  • A description of the specific product or service you are going to offer, including a clear statement as to what is special about your product/service. What is unique about it? Is an innovation in the market or a cheaper version of something that exists?
  • A description about your target customer, including who they are, where they are and how you will reach them.
  • An outline of the exact needs or wants your product/service satisfies for your target customers, considering very carefully things like how will they use it, what will they expect it to do for them, what is it made up of.

Read more on Developing a Value Proposition on The BAM Review blog

2. Where is your market?

It is essential for any would-be business to think through where its customers are going to be. This is even more true for a BAM business that has factors of spiritual impact, and often cross-cultural dynamics, at play. Will your product or services be for a local community, domestic, or overseas market, or some combination? Where are your customers and how will you communicate with them? Are you going to be a retailer, direct seller or a wholesaler, and will you have a shop, catalogue, or website and so on?

Are there cross-cultural issues to think about? Will the expectations of your customers regarding product quality, design and delivery mesh with the ability of your employees to pull it off? How will you deliver your product or service? Do any goods need to cross borders, for supply or shipping? How will the additional time and/or charges affect your pricing and service?

A first instinct for many BAMers is to devise a product or service for an overseas market. However, also consider business opportunities with a local/domestic market, one that will not only create employment and give you a role in the community, but will also benefit the local area with a much needed product or service.

3. Does creating my product or offering my service engage me with the right people?

BAM is built on a network of relationships, with employees, customers, suppliers, locals, officials, investors etc. For a BAM company there must be a powerful Kingdom expression with a measurable spiritual, environmental, social and economic impact. How will you express Kingdom values through your product or service? Is this product or service welcome in the community? Does it bring Glory to God? How does this product or service come in the ‘opposite spirit’ of the prevailing spiritual atmosphere or social challenges in a community, for example, tackling gender identity in Thailand, gambling in China, pornography in Japan, financial greed in the UK or USA or trafficking women in Cambodia or Nigeria? Understanding the spiritual environment that you will be working in or selling into can be very challenging but likely lead to the most impact as you are highly intentional about your product or service.

Does the product or service you want to offer bring you into contact with the people you want to connect with? Who will be your suppliers, customers or employees? Does this product or service allow you to employ the people you hope to create jobs for and interact with the people you hope build relationships with? How will you express Kingdom of God values in the way you deal with your employees, customers or suppliers? What specifically are the Kingdom values you want to express through these interactions?

4. Who else is doing it?

Know your marketplace and understand your competition! This is a much overlooked and critical preparation for a BAM startup. Get a grip of what products and companies will compete with you. List all your competitors and figure out whether they will compete with you across the board, or just for certain products, certain customers, or in certain locations?

Will you have important indirect competitors? For example, video rental stores compete with cinemas, although they are different types of businesses. How will your products or services compare with the competition? What are their prices? What are your competitive advantages and disadvantages? Define your niche, your unique corner of the market.

5. Can I sell it for the right price?

Can you sell it for a price people are willing to pay, cover all your expenses and make the profit you need/want to make? Many business fail due to lack of financial savvy, analysis and funding.

You will need to answer the big questions around your income and costs. How much income will your product/service generate and what other ways are there for you to generate income? You will need good research on the costs that will be incurred in setup of the business. Even a lean startup must weigh these up carefully – supplier costs, delivery costs what will it cost you to exist in business, other costs, taxes, fees and how will you control/manage them? What about the costs of production or delivering the service? How will that change over time? Build in contingencies for when/if costs change.

You will need a fully researched pricing strategy that addresses how you set your prices and what happens to sales if your price changes. What niche in the market will you occupy? For most small businesses, having the lowest price is not a good policy. It robs you of needed profit margin, customers may not care as much about price as you think, and large competitors can under price you anyway. Usually you will do better to have average prices and compete on quality and service. Compare your prices to those of the competition.

How and when will customers pay you? Will you offer discounts? Will you offer credit and under what terms? Cash is like blood to the business, a lack of cash flow can be fatal. Consider carefully the pattern of expected sales throughout the year and any expected lags in revenue versus expenses.

6. Can I keep selling it?

If you sell a muffin on Monday, that’s a sale, but not a business. To create a business you will need to keep selling muffins on Tuesday, Wednesday, Thursday, and so on. Can you keep generating sales and grow your market share? How will you promote your product and market it on an ongoing basis? What are the best advertising strategies to reach your potential customers? How much will that cost? How will you build a loyal customer base and make sure your customers will want to return? How do you want customers to see you? What kind of brand image do you want to build?

Is your business scaleable? Can you scale it fast enough to reach profitability before you run out of cash? Then can you keep growing it from there? If you got an order for 1000 muffins, could you meet it? Is this is a business that could expand – with higher production, or adding services, or creating multiple outlets? Will you be able to put the systems in place that will allow it to grow? Can you significantly increase revenues without increasing operating costs?

 

All these questions and others are an important part of figuring out your business model. Think about them during the planning and development process and jump-start your business as mission company.

by David Skews and Jo Plummer

 

Read more on Business Planning Part 2: Product and Market on The BAM Review blog this month.

david skews profileDavid Skews is a businessperson called to mission. In 1989, he established EDP Health Safety & Environment Consultants Ltd performing the role of CEO as he led EDP through sustained growth for over 25 years in both the UK and Asia. In 2004 he fully engaged in business as mission, as well as continuing to lead his business. Since then, David has focused his efforts into training entrepreneurs in Asia and Africa, and speaking internationally on business for good. He has also helped lead a mission agency through the process of embracing missional business. Today, he acts as a non-exec director for six successful BAM businesses and is part of the Advisory Board for BAM Global. David transitioned out of his business in 2015 and into new BAM fields! David is married to Lesley and is based in the UK.

David serves as a regular mentor for the Ask a BAM Mentor column and a member of the website Editorial Board.

Jo Plummer Jo Plummer is the Co-Chair of the BAM Global Think Tank and co-editor the Lausanne Occasional Paper on Business as Mission. She has been developing resources for BAM since 2001 and currently serves as Editor of the Business as Mission website.