What I Didn’t Know When I Started My Business
I started Red Rabbit (a New York City-based healthy school meal provider in the N.Y. metro area) in 2005 with a vision and a passion—that good nutrition is essential to a child’s academic growth, physical health, and behavior. What I didn’t know was how to make a business out of a passion.
For entrepreneurs who want not only to grow their businesses organically, but also strategically, I offer a few nuggets of advice.
First, spend time, money, and energy looking at your market objectively to find untapped opportunities and assess the profitability and scalability of your current business model. (Typically, this requires an outside consultant with this expertise.)
When we started, we were selling to parents—you could consider this a B2C model. Our consultant took us through a process that unearthed a few important revelations: our B2C model wasn’t as scalable as we thought. A B2B model—direct to schools, administrations, and school districts—would yield faster results in the long run. Though at a lower “per meal” margin, we could scale and grow our business faster if our sales focus, our positioning and messaging, our website, and all marketing were targeted to this audience. We learned that we could not, and should not, try to be all things to all people. We needed to find the “best” target market and put all our energies and resources into developing that target market to the best of our ability.
Second, complete your marketing before you try to grow. Have your value proposition and key market messages crystal clear—in your mind, in the sales and marketing processes, and in all that your employees do. Why are we here? Who are our target customers? What keeps them up at night? How can we help them? Why should anyone do business with us? What makes us different? Better? All those questions should be readily answered by anyone in your company with ease and professionalism. Make sure that your website and marketing (basically, anything you put out to the market) is professional and reflects this. If your brand identity is not consistent and clear, you are just putting a Band-Aid on a wound that will never heal.
Through this process, I discovered that many things we did—initially by choice and instinct—were truly differentiators in our marketplace. For instance, we were not only creating meals from scratch (most food providers, even “healthy” providers, use far more packaged foods and resources than we do) but we had a local, sustainability business model that was incredibly unique and ahead of its time. We supported local farmers, artisans, and suppliers for almost all our “from scratch meals.” Had we not gone through the somewhat painful and time-consuming process of dissecting our competition and our own business model, we would have left critical differentiators completely untapped. Those are the same differentiators that have been responsible for new client acquisitions in the recent few months.
Starting a business from a passion makes it easier to put in the long hours and make the personal and financial sacrifices necessary for building a business. It doesn’t make it easier to figure out the how’s and when’s of growth and strategic business decisions. The wisdom for that comes with trial and error.
Rhys is an alumnus of the Goldman Sachs 10,000 Small Businesses initiative, an investment to help small businesses create jobs and economic opportunity by providing greater access to business education, financial capital, and business support services. Rhys will participate in a panel at America’s Small Business Summit 2012, May 21-23, in Washington, D.C. Go to www.uschambersummit.com to register.