One of the best books I ever read on business was The Personal MBA by Josh Kaufman. It explained very simply that at the core of every business are five pieces that impact the other:
- Value Creation – Discovering what people need or want, then creating it.
- Marketing – Attracting attention and building demand for what you’ve created.
- Sales – Turning prospective customers into paying customers.
- Value Delivery – Giving your customers what you’ve promised and ensuring that they’re satisfied.
- Finances – Bringing in enough money to keep going and make your effort worthwhile.
These five parts are all critical to the other and are key to revenue and success, so let’s dive a little deeper into each subject matter!
Value Creation: Create Something That Delivers Value
This seems like a simple concept, and it is! You need to know exactly what your customer needs and deliver that value. Two primary characteristics drive buying decisions: convenience and high fidelity. Shipt, a membership-based, grocery delivery system, is a great example of convenience. People will pay an extra amount just to have their groceries delivered, because it’s fast, and reliable. High-fidelity is important, because it attracts buyers based on an emotional appeal. So where does your product / service fit in convenience , high fidelity or a little of both?
Marketing: Create Brand Awareness
Content IS king (always has been and always will be). Your message starts with defining your target audience (THIS IS TYPICALLY NOT YOU). Once you have a defined audience you should leverage a multitude of avenues to test your message to that audience. Think of it as trying a different lure until the fish start biting. Your target audience needs to be aware of your brand identity. If you need help in this area fill free to contact us!
Sales: Turn Prospective Customers Into Buyers
The question you need to be asking is: How well do my customers believe and trust me? A great way to answer this question is to look at customer feedback and reviews. Your feedback is a subtle voice of your company, and prospects pay a lot of attention to reviews. Your marketing might have made them bite the hook but you still have to reel them in. In today’s technology marketing is measurable, don’t wait to measure things until finances.
Value Delivery: Deliver Value to Your Buyers
The importance of trust was mentioned in the previous section, and this is where it pays off. Chick-fil-A, for example, is a widely known chicken fast-food restaurant. However, their chicken isn’t what makes them so special, it’s their unmatched service. You know a few things right away when you go through a Chick-fil-A drive-thru: the servers will be kind, the service will be quick, and your order will normally come with extra sauce. This is because Chick-fil-A cares about its customers, and customers know this and will undoubtedly trust the service to be a great dining experience. Likening the chance that they will return again next week. The two ways to exceed a customer’s expectations is to build a highly efficient processes and to have exceptional customer service.
Finances: Measure Finance
So we need a little real talk here, if you do not manage your personal finances well DO NOT START A BUSINESS! If you are not seen as a leader at your current job DO NOT START A BUSINESS! Running a business is not about being your own boss it is about building something bigger than yourself. Finances are a critical part of any business and we suggest that you take a basic class on business finances prior to starting a business.
Outsource what makes sense
The truth is you cannot master all five pieces of your business (sad but true). If you’re lucky, you can master 1 or 2 of them, but you need to understand all of them to some capacity. In the end you will have to outsource and leverage technology for some parts of each of these. Below are some helpful suggestions for each piece.
- Value Creation – Look to what others are doing and do it better or for less!
- Marketing – Obviously dotedison can help here 🙂
- Sales – Contract sales people can work, but no software will close deals for you.
- Value Delivery – This depends on your field, but this is where software helps!
- Finances – Wave Accounting , Quickbooks, and Xero are the top three!
We hope this helps you to choose to start a business, to NOT start a business or to step back and critically look at your current business. If you need financial assistance, we would also suggest you reach out to your local bank (ours is Southern States Bank) or Key Capital.