I am starting up a niche service business in a heavily regulated, highly political, slow to respond, non- innovative and high-barriers-to-entry industry. I have taken a few milestones already and I am basically now ready to launch.
However, my business is not so much about customers wanting the service, pulling out their wallet and buying.
I very much believe that the right customers would want the services, as I know firsthand what pain, frustration and sometimes desperation customers and their families go through due to lack of specialised services in my niche. However, getting that customer will depend on third-party funding in most cases.
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This niche has already been served in Europe for more than 10 years and I worked in the niche in Europe for a start-up company during that time. I learnt valuable lessons there on how to deal with the initial challenges of getting third-party funding, but third-party funding is different in Australia compared to Europe.
I am still working as an employee in the industry and everybody is basically telling me I am on the right track. I also get a fair amount of traffic on my newly launched website, mainly from professionals within the industry and people engage on the website, with the average time spent around 10 minutes – so the audience is interested in the content.
I believe my strongest leverage point in getting customers will be marketing the services to the right funnels and to customers personally. I will have a great opportunity to do just that in a couple of weeks, thanks to my website, and also talking to the right people who know and understand the massive challenges of this niche.
My next step is approaching the funding sources with my business and funding models, which I believe is based on a win-win situation for all stakeholders within the industry, but also would leave me with a profit margin to grow a business. The business and funding model that I offer to third parties may or may not suit the political agenda of those funding sources.
Can you give me any advice in how to approach those funding sources?
Thank you very much,
Don’t know how to deal with third parties
Dear Third Party,
I looked up your website and your idea is terrific! The presentation looks great and I wish you all the best. For all our readers, this business is in the health area without giving too much away, although I really can’t see any need to keep this idea secret as it’s so good.
As I am not a whiz on the health care sector but I asked my mate, Colin Benjamin; who knows a lot about the health sector and is lying in hospital as we speak possibly about to die of boredom if we don’t give him something to do.
He says the health sector is no different to any other industry; nor is seeking funding from third parties:
Here is his checklist:
- Clearly set out the benefit proposition to customers. E.g.; for more than ten years, European families have had access to specialised health care services. These services will soon be available in Australia.
- Even more clearly set out the value proposition for investors. E.g.; increasing access to <services> will deliver a healthy return to investors and a healthier life to <numbers> of customers.
- Prepare a business plan and a marketing plan with your accountant that sets out a breakdown of the costs, benefits, time frames and exit opportunities for business partners for discussion with health oriented investors.
- Then, seek an appointment with the three largest health insurance agencies and the AMA to gain their endorsement of your proposition and/or identify the differences between the European and Aussie context.
- Prepare a one-page presentation on the what and why of your offer and how customers will obtain access to the <specified services> and prepare a press release indicating that you are bringing <service> to Australia and are inviting interested parties to contact you.
- Contact venture angels and potential business partners to consider joining you in establishing test markets and a pilot program that demonstrates proof of concept.
- Have a long talk to family and friends to ensure that you have a firm basis for a brand launch using social media, the web and business press to ensure all key stakeholders have been invited to the launch.
Now remember this is just the start of your journey. It will be long and at times tortuous. But you can’t hold back a great idea, a great service and growing demand for such a service, so when you feel overwhelmed, think of Uncle Col in his hospital bed giving you the thumbs up and telling you to just keep going!
Your Aunty B
To read more Aunty B advice, click here.
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