Over the past decade, business automation has shifted from being a vague possibility to an unavoidable reality. According to one report from Statista, the global revenues from practices surrounding business automation processes are expected to grow from $8.2 billion in 2018 to 12.7 billion by 2021 with a CAGR of 15.7%
This presents an interesting business opportunity for aspiring entrepreneurs. Despite the growing adoption of business automation, there are still thousands of businesses and processes that are carried out manually. Building tools to automate these tasks can be extremely profitable.
So how do you go about this? Here is a step by step guide to help you out.
Identifying business opportunities
Finding the right business opportunity can define the success of your business. Not all business processes need automation, and even if they do, success in the opportunity depends on how much money a business user can save through automating a process.
A good way to identify opportunities is through the use of process maps. This is a popular technique used by manufacturing businesses to chart out every single step along the production process. Process maps are wonderful tools to help businesses identify bottle necks in the process.
Process maps can be handy in identifying business opportunities in any industry. Take the example of a social media marketing agency. A typical agency handles anywhere between six to ten clients and manages between two to five social media profiles on platforms like Facebook, Instagram, Twitter, LinkedIn, and Pinterest.
Until a few years back, agencies used workers to manually post their latest tweets and posts across various channels. This involves a lot of repetitive, manual tasks and has now been taken over by the likes of Buffer and HootSuite that help automate the process.
Process maps are a lot more useful in brick and mortar businesses where there is real human labor involved. Take the example of restaurants that hire dozens of waiters and a manager to handle their operations. Handling the schedule for these workers, managing the ever-changing menus, taking care of marketing and operations all involve dozens of moving parts where even a wee bit of automation can help streamline processes to a great extent. There are dozens of restaurant management apps today that help automate various components of operations and marketing.
Validating your ideas
Once you have identified good opportunities in an industry, the next step is to validate their demand. A successful automation tool is one that helps businesses either scale up their operations or increase revenue, or both. Going back to the example of social media automation, a tool like HootSuite is successful because it replaces a human worker making a couple of thousand dollars every month with a software that only costs a few dozen dollars.
The best way to validate demand in your product is through building a minimum viable product (MVP). MVPs are essentially the bare-bones version of your business product. Relative to building a full-fledged solution, an MVP costs very little time and money to build. Consequently, it helps an entrepreneur know the viability of their product.
Sometimes, you do not even have to go through the grind of building an MVP to test viability. Buffer, for instance, famously created a very simple two-page website to validate demand. The first page explained the tool’s value proposition, and interested users who clicked on to the second page were shown the prospective pricing for the tool. The founders noticed that a lot of users who came to the landing page demonstrated enough interest to click on a paid plan to the third page – these users were notified that the product wasn’t ready yet and they could share their email to be alerted when the tool was ready.
Building a customer pool
Once you have validated the business opportunity, it is time to start building your product. But that is not what we are going to focus on here. In addition to product development, you must also invest time in building a customer pool.
Building a lead generation system to capture prospective customers during this step is helpful for two reasons. Firstly, it helps you garner a database of buyers who can be notified when your product is ready for launch. This brings down the time it takes your business to turn a profit. More importantly though, engaging with customers during the development phase helps you identify potential kinks in the execution that can be fixed immediately.
We have already explained how you could use an MVP to capture email addresses of target customers. However, in order for this strategy to be successful, it is important to engage with these subscribers on a constant basis. You could perhaps keep them updated on the status of your development. Alternately, you could share new insights and tips relevant to your industry so that these subscribers stay engaged. Make sure that you adhere to all the best practices of email marketing like keeping your content short, personalizing your text and producing visual content that increase subscriber interest.
What makes a good product
While the strategies outlined above may appear logical and straight-forward, it does not always work out this way in the real world. This is because you are not the only person finding business opportunities with automation. It is quite likely that the product you are working on already has competition – even if you don’t, your success will soon give way to dozens of copy-cat tools offering similar services for a lower price.
So how do you build a product that is really good and better than competition? The answer to this lies with benchmarking. As a business, you must constantly monitor your competition and look for reasons why your competitor is better than you. Let us take the example of chatbots – this is a new industry that has cropped up in recent years and has helped businesses interact with website visitors without the need for a human agent.
Most chatbots today deploy keyword recognition algorithms to understand customer queries. However, there is a lot of things that can go wrong since similarly worded questions could require entirely different responses. Failure to respond appropriately increases customer frustration and this can have a detrimental effect on your business. Given this circumstance, a chatbot that makes use of technologies like Natural Language Processing and Sentiment Analysis will do a better job than competitors in answering customer queries.
Automation is the future and is expected to disrupt industries in a way that only internet and the industrial revolution did in the past. As an entrepreneur, this presents you with tons of opportunities. Finding the right processes to automate and executing the right strategy can determine the success or failure of your entrepreneurial venture.