THE track record is well known and sobering for any entrepreneur: 90 percent of all new ventures fail. Itâ€™s not hard to see why. Start-ups often lack vital resources, must compete against established companies, and have little or no track record with which to woo customers and investors.
The image of a business can be a basis for building trust. Funding for business is very hard to acquire. however, a business which is trusted can easily get credit from suppliers.
In Uganda, this is evident in businesses like supermarkets where business owners get commodities from suppliers on credit and only pay after the items are sold.
This not only saves the owner from having money upfront, but also enables him to procure more items than he would have afforded.
Furthermore, buyers who trust their current suppliers are less likely to seek information about the new product and express less interest in purchasing it.
In case there is a new product, customers may try it by making a few purchases, with no repeat sales.
As trust is built up over time, earning a buyerâ€™s trust confers a significant first-mover advantage. When customers start believing in your quality, they get hooked to your products and become less sensitive to the price that is paid.
This will also reduce your expenditure on promotions since you will be talking to the already converted.
For owners of growing businesses, the other best way of growing trust is by having a good financial stand.
This doesnâ€™t mean having millions of shillings on your account.
If you are not doing it already, start banking your money as you earn it.
Many people, especially traders, have a bad business habit of keeping money at home or in the shop at the close of the day.
Having constant bank transactions (deposits and withdrawal) builds your reputation and equity, which the bank can base on to offer you credit when you need it.
Build trust to thrive