On Building a Business or Businesses
This week I have been reading a book called Built not Born by Tom Golisano. And It has been an amazing ride, there was lot of value and actionable steps in this book. But there was fluff as well. Again it’s a notes.
Questioning and Curiosity.
I looked at how small businesses operated, and I studied their interior workings, the arithmetic, the relationships, the mistakes people made. I questioned EVERYTHING.
Question Every Business, Figure out their economics.
Possess intimate knowledge of market, product and your customers.
About Business Plans
Viability on one page
Grab a piece of paper, and outline a plan detailing how it might become profitable.
Calculate your operating costs, how many customers you need to sell to break even.
And cut all the fluff, peripheral stats, five and ten year projections etc.
Back up your claim, keep it real, why it should work, how big is the customer segment, what’s your edge ?
Executive Summary
one-two page summary of your business concept, the industry, your market, and the highlights of how your business will operate.
Profit and Loss Statement
One page assessment of income and expenditure
People
You and your management team have enough industry, market and product knowledge.
Identifying and being able to demonstrate a strong need for what you sell, is integral to good business plans.
Homework
Customers
Who are they ? Where are they ? Where do they currently similar products or services ? What is their socio-economic status ? Why will they buy what you sell ? What is the size of market and how much of it are you likely to capture ? How will you target them more effectively ?
Market Research
Do not try to guess the characteristics of your market, go out and discover them. Along the way you will find surprises, identify new markets and uncover additional products and services that your market requires.
Competition
Have a plan to provide a realistic assessment of your competition and your strategy for getting a share of your market.
Price
Research your competition to come up with a price that people are used to paying and that will also provide your company with a profit it requires to be successful.
Marketing
A marketing strategy, where you need to advertise and what’s the budget.
Sales
How you will identify prospects, qualify them, contact them and then sell to them.
Distribution
How are you going to get your product to customer ? Will you deliver it yourself ? What will it cost ?
Is there a large enough enough market ?
Can you make a decent profit margin ?
Can your company deliver ?
Does it have longevity ?
Do you have enough capital ?
Figure out how much you need to sell and be honest; put your optimism aside for this exercise.
Can you keep up with technological change ?
Recurring revenue business offer better opportunities for sustainable sales than non-recurring businesses.
Never assume there is a market large enough to create sufficient revenues and profit to cover
Overconfidence in your product and service is dangerous.
You need to be able to deliver what you sell consistently and reliably.
Ensure your product can stand the test of time (Antifragile)
Always be on lookout for ways to diversify your product range especially by using what you already have in different ways.
Selling
Nothing happens in a company until someone sells something
There is a difference in sales and marketing
There is nothing better than experiencing firsthand the objection prospects have for not buying what you are selling and learning how to handle those objections. You will also gain an understanding of what motivates your buyers.
Be careful when selling to big customers, there are lots of silent risks involved. pg -131
Look at objections of prospects as opportunities. Prepare clear logical answer in advance.
Effective Leadership
**Good managers work on their business and not just in them**
Create the vision
Sell the vision
Execute the vision
Monitor the results
On Negotiation and Deal Making
Get to a spot where it is win win for everyone
Have empathy with other party’s situation
Learn the art of pregnant pause.
Building a positive Public Image
First of all focus on your internal company culture
Act professionally. Keep your premises clean and employees presentable.
Pay vendors on time and build a reputation of being fair and prompt.
Websites, Brochures, Flyers etc. Hire good designers and copywriters
Treat social media seriously.
Keep your customers satisfied.
Lessons from Mistakes he made
Have a plan; don’t let your business just evolve.
A little strategic planning can pay dividends.
Focus on what’s important rather than shiny
Never let others convince you of the validity of concept that goes counter to your instincts and principles.
Do sufficient research to ensure your business concept is not ahead of it’s time
Remember how important your family is to you.
Thanks for reading. I am glad you took out time from your busy life to read this.