Laksania, a local social enterprise is facing the fate of closing down due to poor business.
The owner has sold her house and sank in over $2 million into the business. She has got advice from a F&B entrepreneur who runs a chain of pastries shops and restaurants that I blogged about (click here and here).
So why did the business still failed?
As mentioned in my previous blog, the advisor recommended changes to the business overall packaging and operations. But nothing was mentioned about customers.
Firstly, why select Laksa in the first place? Is there demand for Laksa? How big is the demand? Is there a demand for Laksa from different countries? Is there demand for Laksa served in different styles? How much are people willing to pay? Would people pay the kind of price for the Laksa? If there's a demand, is the price right? Are you providing solution to an unmet need? Are you providing an alternative?
And product is definitely not KING.
So what if you make the best burger but there's no demand for it? Or the demand is not large enough to sustain your business for the price you are charging?
By focusing on areas like design of menu, creating public relation events, getting bloggers to write up to gain exposure, marketing the product are feel good activities that makes one feels that you are doing things to improve your business. But one that does not add much value.
You can have the most beautifully designed menu, the most creative marketing plan, the biggest budget for public relation events and marketing activities. Ultimately, customers want to satisfy their needs and wants. If you cannot fulfill it, it doesn't matter how professional your menu is designed, how many bloggers write about your business, how many events you create and how much you throw into marketing your business.
Instead of deciding what you want to sell, think about what problems your target customers are facing which are bothering them. In other word, what keeps them awake at night? Find a product or service that will solve their problems.
And if you already have a product or service, how you can tailor it to solve a problem that your competitors are not providing?
Photo Source : The Straits Times