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The Morning Norm by Norm Brodsky
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Street Smarts Archives
December 14, 2007
How Do I Get My First Customer?
Posted at 2:16 PM
I recently got this question from a reader named Doug:
Hi Norm,
I'm a typical start-up and can't seem to get my "first customer." I've started a thermography company (infrared inspection), and I provide preventive maintenance inspections. This is the problem: I've never had to start with no customers before, and I have a real hard time cold calling. Any thoughts on getting my first few customers to start the ball rolling?
It's a great question. And it goes to the essence of starting a business when the real question is, Can I sell my product or service to a customer at a decent profit so I can build a company and attain critical mass. Let me explain that. I define critical mass this way: With the amount of capital you are able to raise, can you get to breakeven cashflow before you run out of money? Before I start a business, I always ask my friends and colleagues if they would buy this product or service. And would they be willing to pay X amount of dollars for it?
Here's an example: In the year 2000, I heard about a business called document shredding. And I learned there were two ways to do it -- on site or off. To do it on-site, you needed a piece of equipment that cost $250,000. To do it off-site, you had to build a facility that would cost close to $750,000. With my partners pressuring me to make up my mind, I decided that I had to first find out if I could sell the service at a profit. I used an outside service to do the actual shredding. I quickly found that I could sell the service, and I also figured out that I'd make just as much money by neither buying equipment nor building a facility but by partnering with somebody who already had a facility in place. Today, this business does millions of dollars with great growth margins. But I didn't start it until after I got my first customer.
Back to Doug's question. He says he's already started the business, but I don't think a business is a business until you make sales. So Doug, if I were you, I'd start networking with friends, other business people. I'd go to local groups, such as your local chamber of commerce, where you can meet a lot of people and I'd try to sell your product. If you find you really can't do it, if you're just not comfortable cold calling, there's another solution: Hire somebody who can.
By the way, here's another Tivo alert: I'll be on MSNBC's "Your Business" this Sunday, from 7:30 to 8:00 a.m. ET to talk about how to develop a loyal following and to answer viewer questions. The show will be re-broadcast the following Saturday at 6:30 a.m. ET.
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Hey Norm,
What ever happened to your friends "Helene and Bobby Stone" from the article How to Succeed in Business in 4 Easy Steps? It's been about 15 years since they got into their business full time. I'm curious how life has changed for them.
Robert
Norm, I love your comments for Doug. I certainly can relate to his circumstance, including the cold call trepidation. It took years for me, a natural introvert, to become a business extrovert.
Here are some tangible suggestions I would have for Doug, having started my own business in the service sector ten years ago:
1. Join the local Chamber of Commerce(s) and attend events regularly. Events are frequented by bankers and other managers of paper-intensive offices. Banks must have tons of need for shredding.
2. Attend trade shows, where professional services providers display. Municipal leagues, public officials, banks, architects, engineers and medical professionals come to mind. Do not travel (the cost) but attend the ones that come locally. Exhibitors are your market; you do not need to invest in a booth initially.
3. Launch a web site. Decision-makers troll the internet looking for specialty service providers, not uncommonly. I'm always amazed at what our web site brings us in business, and wouldn't have thought it possible.
4. Strike a deal with a local office products delivery company. Find a way for them to refer you and/or to allow you to market their clients. Their good will (for which, yes, Doug will have to pay) may go a long way to achieving the critical mass you correctly identify that he needs.
Norm and Doug, I hope these comments help and I look forward to hearing how things work. And Norm, you have no idea how your comments have helped me over the years. I'm serious; they are invaluable! Many, many thanks.
Your position with Doug is well taken, Norm. But I think you were easier on him, than your were yesterday on "Your Business"---particularly with the 60 second elevator presentation. Your math was bvetter than his!!!
One of the major themes of my new book (How Do You Answer These 749 Questions About Your Small Business?) is that business is ONLY an idea until you have a Customer. You do not acquire that Customer until you market ; you don't retain that Customer until you continue to market.
Doug needed to do more "Market Research" BEFORE he committed to a Small Business! That includes the first sale!
Hey Robert,
Funny you should ask! My next Street Smarts column is about Bobby and Helene Stone. It will run in the January issue -- available the end of this month. It's about my belief that business owners should track their key numbers by hand, at least initially. It also gives an update on the Stones.
Thanks so much for asking.
--Norm
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