[ZekeLL]

The Importance of Testing

Two days ago a very nice lady wrote me an email. She was desperate because her online store had been open for 6 months and she had only made one single sale. I asked her how much money she had invested in the company so far. She confessed that the amount was well over $25,000.

I see this happening all the time. Having done online marketing for over six years and owning a web design and Internet marketing agency, people tend to come to me when things are not working out for them in the online world.

Do you want to know what one of the biggest mistakes that entrepreneurs make is? Not testing enough. We often put six months of our lives and a big chunk of our savings into a business. We call it “our baby”. We then throw a big launch party and the next day we sit by the phone waiting for orders. But nobody calls.

Thinking that your business will work just because you think it will is, at the very least, arrogant. Do you have a crystal ball? Can you predict the market?

It doesn’t matter that all your friends told you that it is a great idea. They are not going to buy your products, are they?

But I don’t want to spend too much time talking about the wrong approach. I want to talk about the right one. Most successful businesses started by accident. Some girl started to make cookies, her family loved them, her friends did too, and then someone suggested that she should get a stand to sell more cookies. So she did. And everybody in her neighborhood liked the cookies, so the girl talked to her best friend and she got another stand too. Before they knew it, they had five stores in the state.

This girl wasn’t trying to start a company and maybe she was extremely lucky. But there was something she did right. She started small, realized there was demand for her products, and then expanded. She grew her business using her profits, not a loan or startup money.

I wish that someone had taught me the importance of testing five years ago. In 2003 I started a leather accessories business with two friends. We invested a lot of time and money, opened our online store, and got two sales in four months. We were trying to sell luxury leather goods with a brand that nobody knew through our e-store. People didn’t know about us or our collection and since they were shopping online they couldn’t even touch the items to appreciate their quality before giving us their money.

We got really frustrated and decided to sell our inventory for whatever we could get. We went to a very wealthy area in Colorado and sold our items to accessories stores in less than one day. Once the store owners could get their hands on our products they were sold already. They later re-sold these items for three times the price that we were charging on our website and it only took them a week to do it.

If I could go back in time, this is what I would have done:
- I would have spent $200 instead of $4,000 getting professional photos. I would have started with a couple of items, not 150.
- I would have used a basic e-commerce solution instead of getting a fully customized e-commerce website.
- I would have used Google AdWords to buy 200-300 clicks and see what kind of results we could get.

It would have cost me $1,000 instead of $25,000 to figure out that those items wouldn’t sell well online and that I should try something else (like selling them to stores).

Test out your ideas with as little money and time as you can. If they work, then put more money and time into them. If they don’t, drop them and look into new possibilities. After all, if you go to Vegas and only have $5,000 to gamble, you wouldn’t put all your chips at once on number 11, would you?

[minnesotacold]

Very good advice! I started a PT business last month and so far, I have changed my business plan at least 4 times. Right now, I am trying to determine my product line, test demand/supply for such products, pricing and also long term sustainability. This can actually be done with very little money invested. I would NOT buy inventory, or invest any more into this business before I clearly understand demand, supply, profit margin, markup as well as other external factors.

I used to work for this guy who started a Extreme Pizza franchise in Arizona and before he even failed I could totally see why. The business model worked great in San Francisco but he failed to take into account the differences in demographics, pricing, culture and such. Anyways, the main failure factor here was pricing: the pizzas were way too expensive for the Phoenix area and he failed in less than 6 months.

I do not understand how people can open up a business without even knowing if there is a strong demand for the products they are offering.

[ZekeLL]

I am glad to know that you are on the right track.

[stand856]

yea i know, testing people's patience is my thing
but seriously you do need to test things out first before jumping in
lots of people do exactly that end up wasting thousands of $$
and then fail

[Phranksizzle]

Yeah I really wish I would have started out small in a salon that allready existing building up clientele from what they brought in. That would be sweet and would save me ALOT!

Oh and I wish I would have never done money mailer in my demographic (average income is $185k). They don't need coupons.

[ZekeLL]

But if you hadn't sent out the coupons you would've never known that they don't work. The best you can do is to try a lot of things and keep the ones that work.

[Phranksizzle]

This is all completely true -- but I'm contracted do another mailing with them. i'll just shift zones and go to a more coupon friendly area.

[ZekeLL]

If you liked this article, you definitely want to check out my blog: Let's Do It!.

[KPatel]

Some good advice, Zekell. Very interesting blog you've got there as well!

[ZekeLL]

Thank you! Stay tuned because we will be posting more great articles!

[terryxu]

testing is important.
before shipment, also need inspection



I am new from China.....

[ZekeLL]

What do you mean by "before shipment, also need inspection"?