Start and Grow Your Business Successfully: The Gains and Pains of an Entrepreneur by Tan Tat Jin

Author:Tan,Tat Jin [Tan,Tat Jin]
Language: eng
Format: epub
Publisher: Tusitala (RLS) Pte Ltd
Published: 2016-09-22T16:00:00+00:00

Case Analysis

Based on my analysis of the situation, I told him that he had missed out one very important lesson when attempting to secure the big tender. The bigger the project, the more a buyer needs CONFIDENCE. In the start-up phase, he concentrated on developing new products and his credibility as a start-up company was very weak even though he might have a strong stature as a well-known professional in his industry. It would have been easier to secure smaller projects and build up his credentials. You need reference accounts to build confidence in buyers. To him, his products were superb. Even if it were so, the customer had to consider the risk factor.

I would have thought that he ought to have invested his startup money on developing sure winners rather than attractive but ‘high risk’ products. In starting a new business, you really don’t have much cash. You need to generate income quickly to keep your operations going. Unlike big companies with ‘deep pockets’, they can stretch a longer distance without income for some time. Even so, shareholders are quite demanding these days!

Needless to say, before you venture out on your own, it would be ideal for you to have a few ready customers to keep you going. Try to do your best to secure deals by offering products and services that are difficult for your potential customers to refuse. Once you have a few reference accounts, you can begin to negotiate for better deals.

As a rule, it is easier to secure smaller deals with lower risks to the potential customers than big ones when you have not established yourself. Think of the risk factor – are there ways you can reverse the risks (i.e. you take more risks should your products or services fail), offer guarantees or attractive recovery services to win confidence? When I first started my company, I made sure that my prices were about 30 percent lower than the international big names and I promised I would not charge if the customer was not happy. I didn’t actually suffer losses as my assurance was meant to boost their confidence in using my services.

So, remember: industrial buyers, in particular, need confidence and risk minimisation. For consumer sales, well, attracting crowds to patronise your business is the first step. A crowd tends to attract more people as it creates the ‘illusion’ that you are good! The question, of course, is for how long can you attract the crowd? Ultimately, you need to be authentic in what you offer.

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