There are some key lessons that new businesses can learn from real estate market. Learn how to achieve similar success inside.
Creating a business is about creating value for a consumer. In order to earn a customer’s money, you have to provide more value to them than they see in the money sitting in their checking account.
While this seems obvious, many businesses lose focus on this simple principle and go through major downturns after creating a bloated, non-customer-focused corporation.
The inspiration for creating a compelling business can come from unexpected places. For example, the housing market can provide an unexpected source of entrepreneurial inspiration. Here are four lessons that are sure to help your brand focus and deliver an exceptional customer experience.
Location, Location, Location
A home’s value can dramatically change based on its location; waterfront versus rural plains will fetch far different valuations. In business, location is even more important. Do you have access to the pool of employees with the skills you need in order to take care of your customers? What is the tax climate like? How many customers are in your target market? Is there enough traffic on your street to generate foot traffic?
While it may seem obvious that business location is important, there are many entrepreneurs that forget to do their market research before diving in and quitting their day job. Don’t let your company become a failed business statistic. Instead, consider the following five key factors for deciding on a location for your business, courtesy of the Small Business Administration:
- Brand Image: How does the location fit with your company’s brand image?
- Competition: How crowded is the local market for your product or service?
- Proximity to Suppliers: Does the location cut down on shipping and sourcing costs?
- Minimum Wage: Local municipalities and states can set higher minimum wages.
- Hidden Costs: How expensive will it be to configure the facility to your needs?
Invest in Yourself (i.e. Branding)
To expand on the bullet above discussing “Brand Image”, let’s take a look at what your company looks like on the surface to your customers. In the three seconds it takes your customer to create an impression, what will they come away with?
When preparing to list a home on the market, one of the first things a realtor will ask you to do is spruce up the home’s appearance. Staging furniture or painting the interior / exterior, as well as investing in outdoor landscaping is a great way to improve the perceived value of a property.
Just like a home that’s coming onto the market, your company needs to understand its heritage. What gave it strength in the past and allowed it to survive tough economic times? For a company to survive the deadly first few years as a start-up, there was something special and unique that kept customers coming back. In tough times, it’s more important than ever to look back on the good times to help guide the future evolution of the brand.
Understand the Market’s Appetite
Real estate is about finding what’s important to buyers and delivering on those values in a way that increases value to a potential buyer. For example, according to Robby Du Toit of FastSaleToday, “…estate agents will often refer to the top selling features which entice homeowners into an irresistible offer. From the architectural elegance to the trimmings including; a swimming pool, acres of land for the children and dogs to roam and a delightful country kitchen where the family can come together.”
Your business is a culmination of all the things your customers value. An efficient company will focus resources on the things that help customers save money, enjoy a better user experience, or remove barriers to entry. Communicating value is critical.
How are you communicating the benefits of your product or service as compared to the competition? Considering that 81 percent of consumers research information online before making a buying decision, your company’s “curb appeal” online is massively important.
Access to Financing Improves Sales
In your business, your sales and marketing team need to look at more than features and value. Allowing customers to take advantage of same as cash financing can dramatically boost sales. Partnering with a service, like PayPal’s Bill Me Later program for merchants, is a great way for E-commerce startups to compete with more established firms that offer in-house financing.
In many markets, including the housing market, sales volume hinges on a customer’s buying power. The more access to capital they have, the more of your product or service they can potentially afford. According to some sources, the average order volume can increase by as much as 15% when customers have access to credit.
If only business success were as simple as offering financing and finding the perfect location. Navigating the complicated world of starting up and expanding your business’ footprint is a nerve-racking experience. Thankfully, there are those who have been down the path before and can provide guidance.
When I bought my first home, after experiencing some success in my business, I was shocked at how similar marketing a home is to the process of starting-up. I hope you’ll appreciate my perspective on the things that help a home sell, and a business prosper.
Good luck out there. The seas are rough but the destination is worthy of weathering the storm and sharpening your skills.