01 Jan 5 Mistakes to avoid in 2018
Last year I wrote a book called – Recipe for success – the ingredients of a profitable food business and whilst it is aimed at food producers, the principles are just as applicable to any consumer good whether that is a chocolate mousse or a mascara
And so are the mistake that companies make time and time again in selling and marketing their lovely products. 2018 is going to be a tough year – food inflation is still on the up, Brexit uncertainty is going to continue to bite and experts are predicting a share price crash. So what mistakes should you avoid in 2018?
- Creating a product that is too expensive to sell – let’s be honest, we all pay a bit too much for somethings – the branded trainers, the luxury perfume. But in general, there is a ceiling price for a category whether it is food or toiletries. Make sure that before you design your product – you research what the market will bear in terms of retail price and design your packaging, recipe/formulation accordingly.
- Going mass market when niche is so much more productive
When I wrote my book, I aimed at a specific niche of food producers – I may have sold more copies if I had written a general business book but there are so many more people out there with that type of book and readers are harder to find. With a niche positioning, you can target your marketing more effectively and identify a gap in the market that other people are not filling and therefore it makes it easier to sell to your retailers and distributors Take the example of Pip n Nut – she started by offering nut butters in sachets – finding a niche of providing nut butters on the go – she established the brand, got some traction and then expanded into broader markets, couple of years later – creating a business that is now turns over £9m
- Running before you can walk – so many start ups that I meet, want to launch into the multiple retailers (my area of expertise) before they have established any sales on the ground. They also look for investor funding when they don’t have one sale under their belt other than a few market stalls. Build a solid strategy for your business with a route to market that covers at least the first two years and establish a track record and traction. The exception to this is probably Brew Dog who went from selling a few high alcohol beers to suddenly being asked to supply 200 stores – a rare X factory moment but from that they flew to a business that has been valued at upto £1bn!!
- Not thinking beyond the first listing – when we first start a business, we become obsessed with getting that retail listing – but then when its in the store – what do you do to keep it selling? There are so many ways to sell product through – sampling, promotions and social media – focus in on your key retailers and boost their sales. You also need to consider pipe fill with new products. If you think about Cauli rice, they started with a one product (clue is in the title) and then expanded into a number of different flavoured rice. They are now changing their name to Full green as they want to expand into other vegetables such as sweet potato rice etc. Evolution not revolution (although total brand name change is revolution!!)
- Trying to do it all yourself – my resolution for 2018 is to outsource as much as I can in terms of accountancy and admin (my worst nightmares) and social media – which I have learnt to do reasonably well but am sure someone else could do a lot better. As an entrepreneur, we are all run ragged trying to do everything and we get exhausted and burnt out.
Work with a business mentor like myself (and there are plenty for free as well – try Princes Trust, if you are sub 30, Virgin startup and local authorities) to plan out your business priorities and what you can delegate. I know it sounds expensive but think of the opportunity cost of your time – can you make more money focussing on selling more products and building a promotional programme vs sitting at a computer screen trying to do your receipts!!
Avoid these big 5 mistakes and you will have a very prosperous and happy 2018!