As business owners, there’s one thing we need to pay attention to if we want to drastically improve our chances of success. No, its not an endorsement by Bob Barker (although now, the price may be right), but a healthy demand for our products and services. Depending on your ability to market, this becomes very important as being in the convincing game can be very tiring if there is little to no demand for what you have to offer.
Low Demand Equals Low Volume
There’s really no way around it. If your product or service has low demand, you are going to have to work extremely hard in your business just to make a living out of it.
A low demand product really means people don’t feel it is necessary to buy. It’s not a high priority. They could do without it, and probably will.
Does this mean you can’t have success with a low demand product? Not at all! However, you are going to have to go after a large population in order to make the lower ratio of people to potential customers worth it to your bottom line.
High Demand Equals High Volume
At the other end of the spectrum, if your products have high demand, your biggest challenge is going to be how to capture your tiny share of the market.
With a high demand product, people feel they require it in order to function on a day to day basis. It’s high priority because it has high value to them and their lives. They most likely don’t want to do without it, and willingly hand over their hard earned money to get it every day.
You can imagine the leverage this creates for those business owner with these types of products and services. Think oil and gas (#1 traded commodity equals highest demand), and coffee (#2 traded commodity), and if you think the masses are willing to go without either.
Competition is a Clear Sign of Demand
A high demand product is going to have competition. Thats actually a good sign for business that what you are selling is being recognized by other entrepreneurs, and your only concern is how to market well enough that you can horn in on the monetary gains.
Think of competing fast food joints positioned across the street from one another, that still manage to do exceptionally well. The very high demand coupled with a good marketing plan has allowed them to co-exist and each operate a prosperous business.
High Demand and Low Competition – Short Lived
Then there is that magical moment where you have an impending high demand product that has low competition (because it is very early and others have not had a chance to jump on board yet), and the potential profits can send your bank account to Switzerland.
The timing for these types of businesses is short and volatile. There is a higher degree of risk (at the time not knowing the physical demand of the product), but the return could be ridiculous if you can capitalize on the time sensitive window of opportunity.
This scenario is normally short lived, and can only be capitalized on in the very early and formative years (under 3 years).
Regardless of where you find yourself in business, make sure you have done your due diligence on the demand of your product or service. It is the ultimate leverage when people are emotionally and physically tied to what you have to offer, so make good on it and provide it in a wise fashion.
If you would like to know more about how to leverage your business, please visit http://thesilverlining.ca.