The first thing you need to do when you run your Beer Mat test for your online business is to go to a bar. The reason is that they have an endless supply of beer mats and also you want to be in a relaxed environment and let you mind wonder. Take a friend with you because you will get better results with a bit of banter. Take your laptop with and find a bar with wireless connection.
I like the Beer Mat test because it can be fun and its normally quite inspiring. For those who dont know what the Beer Mat test is, it is a simple calculation on your business idea to see if the money or market stacks up.
What should the equation look like?
You need to find out if the money that you get out covers the money and time that you put in. Or rather if the business makes more money than it spends. Work out a total revenue column and a total cost column.
Online businesses are amazing because you can have access to a wide range of markets right there in the bar. Start with some thing that interests you and use applications like
Google Trends
Quantcast
Alexa
to find out what the market is like and if there is enough traffic and money for you to take a slice of the action. You might find that specific niche that will give you thousands of clicks every month.
So lets say that your income is derived from clicks. Write down how many clicks you think you can generate every month from a particular market. Now write down what each click is worth. When you multiply these numbers you will see what your beer mat has to say about income.
Now work out how many clicks you need to do to make this a reality. Lets boil this down to time. If you write 30 words a minute and you need to write 2 articles a day with 400 words in them to make the number of clicks then you have the time it will take to make this business work.
After a couple of clicks and some research on the net, not to mention a couple of beers and probably a couple of Beer Mats you should have an online business plan that you can get to work on.
Friday, 12 March 2010
The 1 reason you don't make money Online!
If you think that you make money online then you are mistaken. You make money from ideas. In fact you make money from just 1 idea. Finding that 1 idea may take trying different ideas but ultimately its just 1 idea that makes you money.
So why dont you make money online. Well I say this because you will come up with the idea in your mind. Its this power in your mind to come up with ideas and turn them into money that separates most entrepreneurs from the rest of the bunch. Sure there are mechanisms on line for money to change hands but really its the idea that makes money and that happens in your mind.
There are going to be different technical mechanisms for processing a transaction but first and foremost you need to have an idea.
So how do you come up with an idea that is going to make money?
1- First off you need to know what your market is. This market needs to have some distinct characteristics like size and money. It needs to be large enough and have enough money changing hands that you can have some of the action too.
2- You need to be good at what you do. People want to buy from someone who knows what they are talking about. If reassures them that they are making the right decision and they dont need to look elsewhere for the information or service or product. Like Ben and Jerry Ice Cream, you know its good because it tastes good. It does what it says and it does it every time.
3- In order to get good you need experience and also some guidance. If you can have someone show you what ideas work and what ideas dont then you can cut straight to the chase and get good at doing the things the work.
4- You need to be passionate. People see passion even when you are not directly in front of them. Most people will buy into passion because they know that even if that person does no know right now they will find the right way later and in a way it becomes an investment that will bear fruit one day.
You may not make money online, you make money from ideas but you still need to know how to translate those ideas into money be it online or offline.
So why dont you make money online. Well I say this because you will come up with the idea in your mind. Its this power in your mind to come up with ideas and turn them into money that separates most entrepreneurs from the rest of the bunch. Sure there are mechanisms on line for money to change hands but really its the idea that makes money and that happens in your mind.
There are going to be different technical mechanisms for processing a transaction but first and foremost you need to have an idea.
So how do you come up with an idea that is going to make money?
1- First off you need to know what your market is. This market needs to have some distinct characteristics like size and money. It needs to be large enough and have enough money changing hands that you can have some of the action too.
2- You need to be good at what you do. People want to buy from someone who knows what they are talking about. If reassures them that they are making the right decision and they dont need to look elsewhere for the information or service or product. Like Ben and Jerry Ice Cream, you know its good because it tastes good. It does what it says and it does it every time.
3- In order to get good you need experience and also some guidance. If you can have someone show you what ideas work and what ideas dont then you can cut straight to the chase and get good at doing the things the work.
4- You need to be passionate. People see passion even when you are not directly in front of them. Most people will buy into passion because they know that even if that person does no know right now they will find the right way later and in a way it becomes an investment that will bear fruit one day.
You may not make money online, you make money from ideas but you still need to know how to translate those ideas into money be it online or offline.
Top 5 sales tips for your Startup Business!
Most new Startup Businesses are built by someone who has expert knowledge on a particular subject. You may be an accountant or a lawyer or maybe you just really enjoy Ice Cream and want to make your own brand of Ice Cream.
For most people who start a business they know how to do what they do and they jump in the deep end. Most of the people I know did not start out in life saying "When I grow up I want to be a Sales Man".
So how do you make sales when you are not a sales man?
1- Ask open ended questions and let your client give you the answer. Always keep in mind that the reason your client is sitting in front of you is because he has a challenge that he does not know how to solve. By asking him about that challenge you will be able to determine what the challenge is.
2- Listen to your client. Remember that it is HIS challenge you are trying to solve and if you engage with him then you will be able to find out exactly what that challenge is. If you are already talking before he has explained his situation then he will stop talking and that's when you have a problem.
3- Ask your client how they see themselves solving this challenge? Important to note that you are still asking questions and listening to the answers. This is a great question because you already know they dont know how to solve their situation or they would not be talking to you. By asking this question you will find out what they have already done and what you can change when you do give your proposal.
4- Now you need to quantify the challenge. Ask your client what the cost is of not solving this challenge. By quantifying this challenge you will be able to put a price on your solution. If your client says it will only cost him $100 then maybe you give him free advice and he feels he got more value than he expected and if he says its going to cost him $1000 then you charge him $100 to reduce his cost to $500 which effectively cost him $600 and he saves $400. You will have to know your own pricing strategy.
5- Ask for the sale by using the word "IF". Say something like IF I could reduce your cost to $600 and save you $400, what would your thoughts be? By asking for the sale like this, there is no pressure to say yes or no, you are just asking what he thinks. You dont have to feel like a high pressure sale man and you get to hear what if any his objections are. If he says "that sounds great", you stand up and say in his own words "Great, Ill get the papers drawn up" and if he says, "I dont know", you go back to step 1 and repeat the process until you have an agreement that you are both happy with.
You dont need to be a Sales Man to make sales, you just need to listen to your client and offer a solution that works for both of you.
For most people who start a business they know how to do what they do and they jump in the deep end. Most of the people I know did not start out in life saying "When I grow up I want to be a Sales Man".
So how do you make sales when you are not a sales man?
1- Ask open ended questions and let your client give you the answer. Always keep in mind that the reason your client is sitting in front of you is because he has a challenge that he does not know how to solve. By asking him about that challenge you will be able to determine what the challenge is.
2- Listen to your client. Remember that it is HIS challenge you are trying to solve and if you engage with him then you will be able to find out exactly what that challenge is. If you are already talking before he has explained his situation then he will stop talking and that's when you have a problem.
3- Ask your client how they see themselves solving this challenge? Important to note that you are still asking questions and listening to the answers. This is a great question because you already know they dont know how to solve their situation or they would not be talking to you. By asking this question you will find out what they have already done and what you can change when you do give your proposal.
4- Now you need to quantify the challenge. Ask your client what the cost is of not solving this challenge. By quantifying this challenge you will be able to put a price on your solution. If your client says it will only cost him $100 then maybe you give him free advice and he feels he got more value than he expected and if he says its going to cost him $1000 then you charge him $100 to reduce his cost to $500 which effectively cost him $600 and he saves $400. You will have to know your own pricing strategy.
5- Ask for the sale by using the word "IF". Say something like IF I could reduce your cost to $600 and save you $400, what would your thoughts be? By asking for the sale like this, there is no pressure to say yes or no, you are just asking what he thinks. You dont have to feel like a high pressure sale man and you get to hear what if any his objections are. If he says "that sounds great", you stand up and say in his own words "Great, Ill get the papers drawn up" and if he says, "I dont know", you go back to step 1 and repeat the process until you have an agreement that you are both happy with.
You dont need to be a Sales Man to make sales, you just need to listen to your client and offer a solution that works for both of you.
The top 1 way to build your online business!
If you have decided to make money online then you have probably already found out that there is a lot of information out there and its quite difficult to sort through it and find how to actually make money. Everyone is claiming that their way is going to make '000,s if not '000 000,s and then you will be able to live the happy life and only work when you want to.
So how do you sort the boys from the men and find that Top 1 way to make money online and build your online business?
I always tell people that they need to find the way that works for them. In fact you will find that 1 top way to make money online and build your online business but first you need to know what all the different ways are and make an informed decision. You need to know how you want to do it and then you need to stick to that one way and get really good at it.
A little bit like building a house, you need to lay the foundations and then build your house on solid foundations. If you dont get good at just one way and are always changing to the next best thing then you will never build a solid foundation and your house will always fall down. This will make you frustrated and you will leave to find the next thing.
To prove this point Id like to ask you to go and ask your friends and family and colleagues about their careers. You will probably notice a patter similar to this:
-In their first years they were learning and getting all the boring jobs and they always had to show how eager they were to prove themselves.
-By year two or three they were still learning and demonstrating their eagerness but they were starting to get into some of the better projects and it became a bit more interesting.
-By year four and five they were still learning and now people were starting to ask them to join some of the better projects before they even asked.
-By year ten they were still learning and now they were starting to share that knowledge and were the ones being able to ask the year four and five to join the projects.
By contrast the people who got to year two and were starting give up and say Ill never get a break and go off to do something else were probably on the brink of getting the better job or getting onto the better project just when they gave up.
Building your online business is going to be similar except that you will be able to decide how quickly you learn. You will be able to speed up that process.
OK so what to do next?
First you need to see what different ways there are and get a feel for what you want to do. Once you know what you want to do you need to learn and practice that top 1 way until you are making all the money you want.
So how do you sort the boys from the men and find that Top 1 way to make money online and build your online business?
I always tell people that they need to find the way that works for them. In fact you will find that 1 top way to make money online and build your online business but first you need to know what all the different ways are and make an informed decision. You need to know how you want to do it and then you need to stick to that one way and get really good at it.
A little bit like building a house, you need to lay the foundations and then build your house on solid foundations. If you dont get good at just one way and are always changing to the next best thing then you will never build a solid foundation and your house will always fall down. This will make you frustrated and you will leave to find the next thing.
To prove this point Id like to ask you to go and ask your friends and family and colleagues about their careers. You will probably notice a patter similar to this:
-In their first years they were learning and getting all the boring jobs and they always had to show how eager they were to prove themselves.
-By year two or three they were still learning and demonstrating their eagerness but they were starting to get into some of the better projects and it became a bit more interesting.
-By year four and five they were still learning and now people were starting to ask them to join some of the better projects before they even asked.
-By year ten they were still learning and now they were starting to share that knowledge and were the ones being able to ask the year four and five to join the projects.
By contrast the people who got to year two and were starting give up and say Ill never get a break and go off to do something else were probably on the brink of getting the better job or getting onto the better project just when they gave up.
Building your online business is going to be similar except that you will be able to decide how quickly you learn. You will be able to speed up that process.
OK so what to do next?
First you need to see what different ways there are and get a feel for what you want to do. Once you know what you want to do you need to learn and practice that top 1 way until you are making all the money you want.
Wednesday, 10 March 2010
Top 1 way to build your startup business!
There is only one way to build your startup business and thats to stick to what you do well!
When successful companies startup their business they pick the one thing that they are going to do and they do it very well. Im sure you have heard the saying "Jack of all trades and Master of none". Well what I am going to show you is exactly why you need to pick your top 1 way to build your business.
McDonalds does burgers
Microsoft does programming
IBM makes computers
What do you do. In order to succeed and build a powerful startup business you need to pick the one thing that you do well and learn to do it better and here is how.
First you need to find the one right way of doing what you do. Your area of expertise is probably a technical one, maybe you are a builder. By being able to describe the one way that you build and the one reason that you build use that approach will give your customers the confidence that you know what you are doing and that they can expect the same one result every time.
Now Im no builder so I cant explain how you should go about doing your job so let me tell you what I do, I am a consultant specialising in startup entrepreneurial businesses. I help young businesses focus their efforts to achieve their goals. I have spent years finding different ways to achieve goals with entrepreneurs and there are many ways but what works is to pick the one way that you are going to use and use it repeatedly.
So what do I need to do now?
Pick 1 customer or group of customers
Pick 1 product or genre of products
Pick 1 message to convey
Pick 1 channel through which to communicate that message
Pick 1 method of delivering that product
Pick 1 and stick to that one
By focusing your efforts into just 1 you will soon start to see that you can streamline your business and make profit instead of spreading yourself thin and losing money.
When successful companies startup their business they pick the one thing that they are going to do and they do it very well. Im sure you have heard the saying "Jack of all trades and Master of none". Well what I am going to show you is exactly why you need to pick your top 1 way to build your business.
McDonalds does burgers
Microsoft does programming
IBM makes computers
What do you do. In order to succeed and build a powerful startup business you need to pick the one thing that you do well and learn to do it better and here is how.
First you need to find the one right way of doing what you do. Your area of expertise is probably a technical one, maybe you are a builder. By being able to describe the one way that you build and the one reason that you build use that approach will give your customers the confidence that you know what you are doing and that they can expect the same one result every time.
Now Im no builder so I cant explain how you should go about doing your job so let me tell you what I do, I am a consultant specialising in startup entrepreneurial businesses. I help young businesses focus their efforts to achieve their goals. I have spent years finding different ways to achieve goals with entrepreneurs and there are many ways but what works is to pick the one way that you are going to use and use it repeatedly.
So what do I need to do now?
Pick 1 customer or group of customers
Pick 1 product or genre of products
Pick 1 message to convey
Pick 1 channel through which to communicate that message
Pick 1 method of delivering that product
Pick 1 and stick to that one
By focusing your efforts into just 1 you will soon start to see that you can streamline your business and make profit instead of spreading yourself thin and losing money.
Startup Business Success - How to find just one Customer!
Whether you are starting out in business or you have been in business a long time you will always be looking to make sales. The best way to make a sale is to look for only one customer.
You see customers are people that want to be treated like individuals. Some times ad campaigns talk about a shotgun approach where you fire off messages in a broad direction and hope something sticks and rifle approach where you aim directly t your target audience. When it come to making a sale you should always aim your rifle at a single customer.
The benefit to this is that your customer will feel that he or she is being looked after. If you go into a sale thinking of all the other sales you need to or want to make then you will not be paying attention to your customer that is right in front of you.
If you are paying attention to your one customer then you will be able to listen to that one customer and find out what their needs and wants are. Forget about everyone else, they will get their turn but right now the most important customer is the one you are targeting.
So where can I apply this approach? There are endless environments from internet sales to aerospace to advertising sales to the corner shop in fact any business you are in just give it a go and see how well it works. The next customer you have the pleasure of serving, make him feel like he is the only person in the world and spend just that extra bit of time getting to know him.
You will soon see how finding just one customer will turn boost your sales and your reputation.
You see customers are people that want to be treated like individuals. Some times ad campaigns talk about a shotgun approach where you fire off messages in a broad direction and hope something sticks and rifle approach where you aim directly t your target audience. When it come to making a sale you should always aim your rifle at a single customer.
The benefit to this is that your customer will feel that he or she is being looked after. If you go into a sale thinking of all the other sales you need to or want to make then you will not be paying attention to your customer that is right in front of you.
If you are paying attention to your one customer then you will be able to listen to that one customer and find out what their needs and wants are. Forget about everyone else, they will get their turn but right now the most important customer is the one you are targeting.
So where can I apply this approach? There are endless environments from internet sales to aerospace to advertising sales to the corner shop in fact any business you are in just give it a go and see how well it works. The next customer you have the pleasure of serving, make him feel like he is the only person in the world and spend just that extra bit of time getting to know him.
You will soon see how finding just one customer will turn boost your sales and your reputation.
Tuesday, 9 March 2010
Startup Business Team - How to build your team!
When you are building a startup business you will want to have a team of people. This team of people are going to be your go to team. They will provide support, information, skills, experience and contacts.
The team that you need to build will depend on the needs of the business. I like to break down my team into different genres.
-Generic
-Industry specific
-Motivational
Generic
Generic team members are members that will have skills that are transferable across industries. These will include Legal, Accounting. You can use these in different industries and you will probably develop a relationship with these people and make use of their skills sporadically. They may do you accounts monthly or just help you set up your company. You may need a lawyer to check new contracts with suppliers or partners.
Industry specific
These team members are going to be key to the success of your business because they will have contacts and knowledge of the industry you are going into. These contacts will help you identify opportunities and also help you avoid pitfalls in your industry. When it comes to hiring people your industry specific team members will be able to help you find the best people for the job.
Motivational
These team members are the people who support you. They come in all shapes and sizes. Motivational team members may be family members, friends and most importantly people who have build a business and know how to guide you through growing your business. These will be some of the most important relationships you have. A mentor is a great person to have on your team especially if they are a successful multimillionaire who can introduce you to other contacts. He may be able to help you find the generic and industry specific team members that you need to build your startup business.
When you first start out try and find team members who will give you their time for free. Later when you have some success you should search out and pay for the best advice available.
The team that you need to build will depend on the needs of the business. I like to break down my team into different genres.
-Generic
-Industry specific
-Motivational
Generic
Generic team members are members that will have skills that are transferable across industries. These will include Legal, Accounting. You can use these in different industries and you will probably develop a relationship with these people and make use of their skills sporadically. They may do you accounts monthly or just help you set up your company. You may need a lawyer to check new contracts with suppliers or partners.
Industry specific
These team members are going to be key to the success of your business because they will have contacts and knowledge of the industry you are going into. These contacts will help you identify opportunities and also help you avoid pitfalls in your industry. When it comes to hiring people your industry specific team members will be able to help you find the best people for the job.
Motivational
These team members are the people who support you. They come in all shapes and sizes. Motivational team members may be family members, friends and most importantly people who have build a business and know how to guide you through growing your business. These will be some of the most important relationships you have. A mentor is a great person to have on your team especially if they are a successful multimillionaire who can introduce you to other contacts. He may be able to help you find the generic and industry specific team members that you need to build your startup business.
When you first start out try and find team members who will give you their time for free. Later when you have some success you should search out and pay for the best advice available.
Monday, 8 March 2010
Startup Business - Checklist for success!
Your startup business needs to be given every opportunity it can for success. Most startups that fail, fail because they dont implement a rigorous plan and stick to their plan. The best thing you can do is start with a checklist. You should try and keep this as simple as possible. As you tick one off then continue to the next.
The major areas you need to plan will be
1-Marketing
2-Finance
3-Operations
Marketing
1-Do you have a customer
2-Do you have enough customers
3-Do you have a product or a service that your customers want
4-Do you have competitors
5-Do you have a product that is different from your competitors
6-Do you have a way of telling your customers about your product
Finance
1-Do you have capital
2-Do you have a sales ledger
3-Do you have an expenses ledger
4-Do you have a cash flow spreadsheet
5-Do you have a profit and loss spreadsheet
6-Do you have credit terms
7-Do you have an accountant
8-Do you have a bank account
Operations
1-Do you have premises or a way of storing your product
2-Do you have a way of getting your product to your premises
3-Do you have a way to add value to your product
4-Do you have a way of getting your product to your customer
5-Do you have a way of collecting money from your customer
6-Do you have a way of paying your suppliers
This may be a simplification of what is involved but it will give you a good idea of the areas that you need to plan. You might have noticed that I have asked the question "do you have a way" in the operations many times. If you are able to plan a system for each of these tasks then you are well on your way to making a startup business success.
The major areas you need to plan will be
1-Marketing
2-Finance
3-Operations
Marketing
1-Do you have a customer
2-Do you have enough customers
3-Do you have a product or a service that your customers want
4-Do you have competitors
5-Do you have a product that is different from your competitors
6-Do you have a way of telling your customers about your product
Finance
1-Do you have capital
2-Do you have a sales ledger
3-Do you have an expenses ledger
4-Do you have a cash flow spreadsheet
5-Do you have a profit and loss spreadsheet
6-Do you have credit terms
7-Do you have an accountant
8-Do you have a bank account
Operations
1-Do you have premises or a way of storing your product
2-Do you have a way of getting your product to your premises
3-Do you have a way to add value to your product
4-Do you have a way of getting your product to your customer
5-Do you have a way of collecting money from your customer
6-Do you have a way of paying your suppliers
This may be a simplification of what is involved but it will give you a good idea of the areas that you need to plan. You might have noticed that I have asked the question "do you have a way" in the operations many times. If you are able to plan a system for each of these tasks then you are well on your way to making a startup business success.
Friday, 5 March 2010
Does your Startup Business pass the beermat test?
Creating your startup business is probably not an overnight plan but you should try and simplify your first thought on this to just that. Many entrepreneurs talk of a beermat calculation for their startup business. This is a simple calculation to see if the money adds up. Its probably worth keeping this simple and then sleeping on it. If your idea still seems like a good one after the beermat told you it was and a good sleep then carry on investigating it.
To begin your investigation on your startup business make every step a sink or swim one. First off, how does the beermat react. You will probably want to have a figure for how much you can actually bring in every month or year and then a figure for how much money will go out every month, year and so on. If there is a positive difference and the margin is big enough to allow for some mistakes and profit then you have made the first hurdle. Its still swimming!
Your next step should be to find out if your beermat assumptions are true. Is there enough of a market to make the income that you wrote on your beermat and are the costs as low as you wrote on your beer mat? They may be very different or they may be better than you thought. You should try and find all the information you can and if the margin is still enough to make mistakes and profit then your startup business could possibly be a success. Its still far from that now but maybe the idea is still swimming. If there is no margin for success then maybe this startup business idea sinks and you find a new beermat.
Now you need to stick with the sink or swim for a little while longer. This starts to look like a flow chart. A flow chart will ask a question if the answer is yes then your startup business idea proceeds to the next question. If the answer is no then your startup business idea proceeds to the 'to be filed' pile. Its important to keep this pile because maybe at a later stage you will be able to draw on some of this information or maybe something changes in the future that revives the idea and makes it viable.
Once you have answered enough questions on the market and the costs, now start asking questions on your kills and your ability to bring this to market. As with the flow chart, make it a sink or swim, yes or no situation. Your startup business will need to have the right skills involved to be a success. Do you have the skills or can you find the skills and still make the beermat numbers work. If after all these questions about the costs and the skills are answered and your startup business idea is still swimming then you should ask one last question and sleep on it. Do you have the drive and ambition to make it work? This is going to take time, energy, commitment and dedication but above all, you will still need to have the enthusiasm when everyone else is too worn out to take the next step.
If after all of this, your startup business idea is still swimming and you have almost all the answers and you are still enthusiastic about your beermat idea then it is quite likely that your startup business could possibly be a success. Its just possible though and so now the hard work begins. The smart work has already started and the hard work plus the smart work could equal a Startup Business Success!
To begin your investigation on your startup business make every step a sink or swim one. First off, how does the beermat react. You will probably want to have a figure for how much you can actually bring in every month or year and then a figure for how much money will go out every month, year and so on. If there is a positive difference and the margin is big enough to allow for some mistakes and profit then you have made the first hurdle. Its still swimming!
Your next step should be to find out if your beermat assumptions are true. Is there enough of a market to make the income that you wrote on your beermat and are the costs as low as you wrote on your beer mat? They may be very different or they may be better than you thought. You should try and find all the information you can and if the margin is still enough to make mistakes and profit then your startup business could possibly be a success. Its still far from that now but maybe the idea is still swimming. If there is no margin for success then maybe this startup business idea sinks and you find a new beermat.
Now you need to stick with the sink or swim for a little while longer. This starts to look like a flow chart. A flow chart will ask a question if the answer is yes then your startup business idea proceeds to the next question. If the answer is no then your startup business idea proceeds to the 'to be filed' pile. Its important to keep this pile because maybe at a later stage you will be able to draw on some of this information or maybe something changes in the future that revives the idea and makes it viable.
Once you have answered enough questions on the market and the costs, now start asking questions on your kills and your ability to bring this to market. As with the flow chart, make it a sink or swim, yes or no situation. Your startup business will need to have the right skills involved to be a success. Do you have the skills or can you find the skills and still make the beermat numbers work. If after all these questions about the costs and the skills are answered and your startup business idea is still swimming then you should ask one last question and sleep on it. Do you have the drive and ambition to make it work? This is going to take time, energy, commitment and dedication but above all, you will still need to have the enthusiasm when everyone else is too worn out to take the next step.
If after all of this, your startup business idea is still swimming and you have almost all the answers and you are still enthusiastic about your beermat idea then it is quite likely that your startup business could possibly be a success. Its just possible though and so now the hard work begins. The smart work has already started and the hard work plus the smart work could equal a Startup Business Success!
Thursday, 4 March 2010
Simplify your sales to grow your startup business!
Starting and growing any business is going to be about making sales. If you are making sales, you are in business if you are not making sales then you are not in business. So on that premise, you need to devise a system for making sales. So where to start?
Make it as simple as possible. Identify who the people or group of people who will buy your product or service, find out where they go to make that purchase and put yourself in front of them, shouting at the top of your lungs why they should buy from you and asking them for the sale.
I immediately think of the town crier selling newspapers on the street corner. In the path of the people walking to work and shouting out the main headline or hook, the reason for why someone would buy the newspaper is for the information.
What you need to think of is how to simplify the buying process for your customer. Do all the thinking for them and explain to them how why they should buy and how to go about buying and why its better to buy from you than from someone else.
Of course what works for one company or product may not work for yours so you need to test and learn and devise a system that works for your application. One simple tool to help you plan is AIDA which is used in advertising
A- Attention
I- Interest
D- Desire
A- Action
First grab their attention by shouting out what you do, stimulate their interest by relating it to the problem it solves then build their desire by showing them how it solves their problem and finally tell them what action they need to take to make it a reality in their life. If you want to watch this in action you can turn onto a home shopping channel on TV and watch the sales people. They demonstrate this process very well.
You need to repeat the process as many times as possible and you are in business.
Make it as simple as possible. Identify who the people or group of people who will buy your product or service, find out where they go to make that purchase and put yourself in front of them, shouting at the top of your lungs why they should buy from you and asking them for the sale.
I immediately think of the town crier selling newspapers on the street corner. In the path of the people walking to work and shouting out the main headline or hook, the reason for why someone would buy the newspaper is for the information.
What you need to think of is how to simplify the buying process for your customer. Do all the thinking for them and explain to them how why they should buy and how to go about buying and why its better to buy from you than from someone else.
Of course what works for one company or product may not work for yours so you need to test and learn and devise a system that works for your application. One simple tool to help you plan is AIDA which is used in advertising
A- Attention
I- Interest
D- Desire
A- Action
First grab their attention by shouting out what you do, stimulate their interest by relating it to the problem it solves then build their desire by showing them how it solves their problem and finally tell them what action they need to take to make it a reality in their life. If you want to watch this in action you can turn onto a home shopping channel on TV and watch the sales people. They demonstrate this process very well.
You need to repeat the process as many times as possible and you are in business.
Saturday, 27 February 2010
Cash Flow is King for any Startup Business!
Turnover is Vanity, Profit is Sanity and CASH FLOW is REALITY
This was a message that I grew up with. It was posted over my dads desk at his office. My dad is an accountant by training and a business owner by choice. He drummed into me from a young age that Cash Flow is King.
So what is Cash Flow? Cash flow is the timing of actual flow of cash into and out of your bank account. It is an art to balance the cash flow of a business. Lets break it down with an example. Lets say that you buy some stock from your local cash and carry. You pay before you walk out the door with your stock. This is a cash outflow. You take the stock back to your warehouse and the next day a customer places an order for the stock. This is the sale. You deliver the stock the next day and the sale is complete! But is it really complete.
The Sale is only complete when the money is in your bank. Lets say that you have credit terms with your customers of 30 days. That means that they will pay you after 30 days. 30 days later you give them a call and ask for them to pay and they tell you they put the cheque in the post yesterday. The cheque arrives a few days later and off you go to the bank to deposit the cheque. 7 days later the cheque is cleared into your account. Now if we ad that all up we can se the cash flows of this transaction.
Day 1 You buys some stock
Day 2 You receive an order
Day 3 you deliver
Day 33 You call to ask for Payment on your 30 day terms
Day 34 you receive a cheque
Day 41 The cheque clears into you account
Thats a total of 41 days after you paid for the goods that you got paid. So the cash has been out of your bank for 41 days. Lets look at this in a different scenario.
You receive an order from your customer and you immediately take payment for that order maybe its over the phone by credit card or online payment. The same day you place an order with your supplier and he delivers directly to your customer the next day. You have 30 days credit with your supplier and so you will only pay 30 days later. Because you want to have a good relationship with your supplier you make sure that the money is paid into his account 30 days later and because you have already been paid upfront then you have the cash available and you dont have to wait to pay him at all.
You can see through these two examples that they have different outcomes for cash flow but the same transaction took place. You will need to build a business model that fits with your cash requirements.
Its an art but you need to understand Cash Flow to ensure that your business survives
This was a message that I grew up with. It was posted over my dads desk at his office. My dad is an accountant by training and a business owner by choice. He drummed into me from a young age that Cash Flow is King.
So what is Cash Flow? Cash flow is the timing of actual flow of cash into and out of your bank account. It is an art to balance the cash flow of a business. Lets break it down with an example. Lets say that you buy some stock from your local cash and carry. You pay before you walk out the door with your stock. This is a cash outflow. You take the stock back to your warehouse and the next day a customer places an order for the stock. This is the sale. You deliver the stock the next day and the sale is complete! But is it really complete.
The Sale is only complete when the money is in your bank. Lets say that you have credit terms with your customers of 30 days. That means that they will pay you after 30 days. 30 days later you give them a call and ask for them to pay and they tell you they put the cheque in the post yesterday. The cheque arrives a few days later and off you go to the bank to deposit the cheque. 7 days later the cheque is cleared into your account. Now if we ad that all up we can se the cash flows of this transaction.
Day 1 You buys some stock
Day 2 You receive an order
Day 3 you deliver
Day 33 You call to ask for Payment on your 30 day terms
Day 34 you receive a cheque
Day 41 The cheque clears into you account
Thats a total of 41 days after you paid for the goods that you got paid. So the cash has been out of your bank for 41 days. Lets look at this in a different scenario.
You receive an order from your customer and you immediately take payment for that order maybe its over the phone by credit card or online payment. The same day you place an order with your supplier and he delivers directly to your customer the next day. You have 30 days credit with your supplier and so you will only pay 30 days later. Because you want to have a good relationship with your supplier you make sure that the money is paid into his account 30 days later and because you have already been paid upfront then you have the cash available and you dont have to wait to pay him at all.
You can see through these two examples that they have different outcomes for cash flow but the same transaction took place. You will need to build a business model that fits with your cash requirements.
Its an art but you need to understand Cash Flow to ensure that your business survives
Systems, The cornerstone of any Startup Business!
If you look at any great business, big or small you will find systems. Systems are quite simple the way things operate. Like driving down the road there is a system or rather multiple systems that make it work. You drive on the right or left hand side of the road, you stop at traffic lights that are red and you go when they are green. You also have a system for driving the vehicle. You put your foot on the gas and you go, you put it on the brake and you stop. To turn right you turn the wheel and you get the picture. OK things can go wrong and accidents happen but then there are systems for that too. Somebody calls the authorities and an ambulance and police and fire department are dispatched to the scene. They evaluate and take actions base on the systems they are taught.
So maybe you start to see that systems are there to give guidelines to how to do something or even strict operating procedures. Systems can be the biggest part of your work and once you have got them right then your business can operate almost on autopilot. I say almost because you still need to work the systems and it will be a lot of work. So lets look at who has systems that work well.
McDonalds is a great system and very well known. It took almost four years to develop McDonalds systems but now they work so well that the company can operate on autopilot without the boss having to be on the floor every day because he can simply train people to use the system and the system tells them how to handle every aspect of the business. Another great system is Microsoft. Microsoft operating systems are integral to most small businesses. When you switched on your computer you most likely used Windows or Office to get something done.
Most systems dont need to b complex, in fact the simplest systems are the ones that work best. Lets take a look at where you could let systems make your life easier.
1 Marketing
2 Finance
3 Operations
These three broad categories will form the basis of any business. You could look at an overview of these and have system for how they integrate. Because they are interdependent, they need to work together. You will need to have a system to help them work together. In a small business this system can be simple but it should help the information that each one generates to flow into the others. Maybe a simple meeting once a week to look at how these are fitting together is all you need. The important thing to do is define how they relate to eachother.
I will go into more on systems on Each of these in future blogs. For now you can start to think of what types of systems you need and write them down so that anyone else could follow them.
So maybe you start to see that systems are there to give guidelines to how to do something or even strict operating procedures. Systems can be the biggest part of your work and once you have got them right then your business can operate almost on autopilot. I say almost because you still need to work the systems and it will be a lot of work. So lets look at who has systems that work well.
McDonalds is a great system and very well known. It took almost four years to develop McDonalds systems but now they work so well that the company can operate on autopilot without the boss having to be on the floor every day because he can simply train people to use the system and the system tells them how to handle every aspect of the business. Another great system is Microsoft. Microsoft operating systems are integral to most small businesses. When you switched on your computer you most likely used Windows or Office to get something done.
Most systems dont need to b complex, in fact the simplest systems are the ones that work best. Lets take a look at where you could let systems make your life easier.
1 Marketing
2 Finance
3 Operations
These three broad categories will form the basis of any business. You could look at an overview of these and have system for how they integrate. Because they are interdependent, they need to work together. You will need to have a system to help them work together. In a small business this system can be simple but it should help the information that each one generates to flow into the others. Maybe a simple meeting once a week to look at how these are fitting together is all you need. The important thing to do is define how they relate to eachother.
I will go into more on systems on Each of these in future blogs. For now you can start to think of what types of systems you need and write them down so that anyone else could follow them.
Friday, 26 February 2010
Brainstorming your startup business idea!
So you have taken the all important decision to start your won business and own you need to find the right idea. I find the best place to start is to sit and brainstorm. When you do this, set some time aside and let your mind go. Write down all the ideas that you have and keep thinking about the possibilities. This is not the time to eliminate any of your ideas, this is the time to get them down on paper. At a later stage you can eliminate ideas or join some together but now is the time to think up all the weird and wonderful ideas you can possibly think of.
So what kind of ideas are there out there. Its probably best to start with the things you are interested in. Look around at home and think about the things in your life that get you excited. Maybe its food, maybe its clothes, maybe its computers and for me its business. I am passionate about business and so I am writing a blog about my progress. I am also building a product that is in the adventure gear industry (more on that in other posts in the future). he point is that you need to think of something that excites you and that you are happy to spend time doing and are willing to learn more about.
Write down all your ideas. You may find that a particular theme starts to appear. It might be food and cooking and eating and so you may expand on that. Now you need to brainstorm a way to make money out of this. So lets stick with the theme of food. One important thing to see here is that in order to make money and profit, you need to continually build on one area. There is no point in starting over and over again. So sticking with food start to brainstorm what is going to make money. In food, you can sell food, recipes and add by adding value. So how do you add value? In food you add value by improving the offering. Maybe its through delivery of raw materials or by cooking raw materials or ingredients. Again you need to decide on what you feel is important and exciting to you. Maybe you feel that you enjoy cooking food and so that is how you can ad value.
Now that you are heading in the right direction you need to brainstorm your system. Systems are important because they allow you to train others and also kick into autopilot. Some systems you might be able to implement are to start a blog on cooking and teach others to cook the recipes that you know. Then the system might be to make a test a new recipe on Monday, Write the recipe down on Tuesday, Video tape the recipe actually being cooked on Wednesday and publishing the video clip on Thursday, getting feedback on Friday and taking the weekend off.
The important thing with Brainstorming is to generate plenty of ideas and write them all down. When you have lots of ideas then you can pick the ones that you like and you feel will work.
More on Systems in a future Blog
So what kind of ideas are there out there. Its probably best to start with the things you are interested in. Look around at home and think about the things in your life that get you excited. Maybe its food, maybe its clothes, maybe its computers and for me its business. I am passionate about business and so I am writing a blog about my progress. I am also building a product that is in the adventure gear industry (more on that in other posts in the future). he point is that you need to think of something that excites you and that you are happy to spend time doing and are willing to learn more about.
Write down all your ideas. You may find that a particular theme starts to appear. It might be food and cooking and eating and so you may expand on that. Now you need to brainstorm a way to make money out of this. So lets stick with the theme of food. One important thing to see here is that in order to make money and profit, you need to continually build on one area. There is no point in starting over and over again. So sticking with food start to brainstorm what is going to make money. In food, you can sell food, recipes and add by adding value. So how do you add value? In food you add value by improving the offering. Maybe its through delivery of raw materials or by cooking raw materials or ingredients. Again you need to decide on what you feel is important and exciting to you. Maybe you feel that you enjoy cooking food and so that is how you can ad value.
Now that you are heading in the right direction you need to brainstorm your system. Systems are important because they allow you to train others and also kick into autopilot. Some systems you might be able to implement are to start a blog on cooking and teach others to cook the recipes that you know. Then the system might be to make a test a new recipe on Monday, Write the recipe down on Tuesday, Video tape the recipe actually being cooked on Wednesday and publishing the video clip on Thursday, getting feedback on Friday and taking the weekend off.
The important thing with Brainstorming is to generate plenty of ideas and write them all down. When you have lots of ideas then you can pick the ones that you like and you feel will work.
More on Systems in a future Blog
Some of the businesses I have started!
I guess its only fair for me to tell you about my history. I started out in life in South Africa and I remember my first entrepreneurial début was making pancakes and selling them on the street corner. I only remember one paying customer a well dressed man walking to work who probably thought it quite amusing that some kids were selling something on the street corner.
Much later in my career I started a small one on one diving school. My first clients were my friends and family. Then I started training with a school of disabled divers. I really jut taught anyone who I could find and it seemed that discount was the name of the game. I was not getting rich but I was doing something I loved and getting closer to the end game. Over time I made contacts in the industry and got slightly better deals on equipment and started to invest in more equipment. I got to know the skippers and shop owners and then started getting referrals. It was after about two years that I got the referral that changed the game for me. I was asked to train a consultant who was in the city for a long term project. He and his colleagues were willing and ready to pay for individual training.
My sales went up and so did my price. Overnight I went from charging local rates to international rates. I was effectively doing the same amount of work for four times the price. This training and the trips that followed were what saw me through college. Again not making millions but somehow getting by and growing all the time. When I finished college I took a job in the dive industry at a magazine which seemed like a good move to learn more. I sold up and bought a flat.
I rented the flat out and made a small income from this but not major money. In the mean time I moved overseas and started working for small companies owned by entrepreneurs, people I could learn from. After three years I sold that flat for three times what I paid for it. The mortgage was paid for by my tenant and so I did not spend a thing. Now I had a small amount of capital.
At the moment I am working on building a business that will be more than just me, a business that I can grow into a £multimillion business and retire young. My greatest challenge now is just keeping going until I succeed. Working through product development is taking its toll and I am trying to find the right people to work with but its exciting and I love what I am doing.
This blog is for all the people out there who dare to try and make a start, grit their teeth and persevere.
Much later in my career I started a small one on one diving school. My first clients were my friends and family. Then I started training with a school of disabled divers. I really jut taught anyone who I could find and it seemed that discount was the name of the game. I was not getting rich but I was doing something I loved and getting closer to the end game. Over time I made contacts in the industry and got slightly better deals on equipment and started to invest in more equipment. I got to know the skippers and shop owners and then started getting referrals. It was after about two years that I got the referral that changed the game for me. I was asked to train a consultant who was in the city for a long term project. He and his colleagues were willing and ready to pay for individual training.
My sales went up and so did my price. Overnight I went from charging local rates to international rates. I was effectively doing the same amount of work for four times the price. This training and the trips that followed were what saw me through college. Again not making millions but somehow getting by and growing all the time. When I finished college I took a job in the dive industry at a magazine which seemed like a good move to learn more. I sold up and bought a flat.
I rented the flat out and made a small income from this but not major money. In the mean time I moved overseas and started working for small companies owned by entrepreneurs, people I could learn from. After three years I sold that flat for three times what I paid for it. The mortgage was paid for by my tenant and so I did not spend a thing. Now I had a small amount of capital.
At the moment I am working on building a business that will be more than just me, a business that I can grow into a £multimillion business and retire young. My greatest challenge now is just keeping going until I succeed. Working through product development is taking its toll and I am trying to find the right people to work with but its exciting and I love what I am doing.
This blog is for all the people out there who dare to try and make a start, grit their teeth and persevere.
Persevere until you are successful in building your startup business!
Have you ever wondered what the formula for success is? There is no straight answer because there are many different formulas for building a business. You could go down the franchise route or build a home business or maybe an internet startup. The key to making a success of it is perseverance.
Perseverance is not a mystical thing but a very real not so easy to achieve strategy. Not so Easy because it requires work and commitment and plenty of drive. You need to be passionate enough to carry on going even when everything is stacked against you.
There are some fantastic books to read and you should read them all. Not because you will always be learning something new but because you will always be reaffirming the reason for your commitment. You may need to change direction at time and even stop to think about your direction and what to do next but as long as you keep taking steps forward then you will at some point succeed. Of course there are certainly some shortcuts but they do not make things as easy as falling into a bucket of money, they just make your journey take the path of least resistance. You will find these out normally by asking for help from the right people. The people who have done it before you.
So just carry on going and try to fin the help you need
Perseverance is not a mystical thing but a very real not so easy to achieve strategy. Not so Easy because it requires work and commitment and plenty of drive. You need to be passionate enough to carry on going even when everything is stacked against you.
There are some fantastic books to read and you should read them all. Not because you will always be learning something new but because you will always be reaffirming the reason for your commitment. You may need to change direction at time and even stop to think about your direction and what to do next but as long as you keep taking steps forward then you will at some point succeed. Of course there are certainly some shortcuts but they do not make things as easy as falling into a bucket of money, they just make your journey take the path of least resistance. You will find these out normally by asking for help from the right people. The people who have done it before you.
So just carry on going and try to fin the help you need
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