What is the toughest part about Business Start up? Take the poll, then dialogue afterwards.
Saving up enough money to get started.
Finding an investor.
Determining what skill I have that others will pay for.
Setting prices in a way that cover time, costs and yield profit.
Writing a business plan.
Finding customers and creating a niche.
Getting potential customers to buy.
Getting potential customers to forget my age, race and/or gender.
Expanding my business.
Just getting started! Not procrastinating and/or being afraid.
Each poll option presents a specific challenge that contributes to the "total" challenge of starting a business, though I chose Writing a Business Plan.
The three questions that I Coach Entrepreneurs and small businesses on are:
1. What is your Business?
2. Who is Your Customer?
3. How Do you Add value?
Knowing what your business is and who your cusomer is -is key to successful start-up operations. In the start-up phase, resources are limited and human capital is the largest percentage of available capital.
Your goal and focus is to expend your human capital directing other capital in the direction where you can begin to receive immediate returns on your investement. The execution of the business plan requires close attention to capital expenditure. Most new business fail due to poor cash flow, meaning more is cash is outgoing than in-coming to sustain the business until it reached profitability.
* Where, how and when you intend to expend capital should be detailed in your business plan, and linked to KPIs -Key Performance Indicators.
Every expense must be justified, and make strategic and business sense. Now is not the time to "floss" for your folks and friends. It'll be greater, later. Unless your business is of the nature where clients must come to you, YOU DO NOT NEED AN OFFICE. This eats valuable cash that could be reserved, or spent in areas that will bring you a higher return and sustain your business.
How much capital you have is not the key determiner of success in many cases, it is how cash is managed. Many businesses flush with capital fail because money is directed in the wrong areas -things that do not directly impact the customer experience and will not generate revenure. Fancy offices, excusite brochures, mis-directed advertising campaigns targeted to the wrong custer segment or the broad market are examples.
Steve's Maxim: Revenue - Costs = Profit. Everything else is Empire Building
Your target customer is the focus of action that you will take in executing your business plan. Whether you enter a broad-based market segment, or seek to carve a niche, knowing who your customer is and what your customer values, and how your go about adding or offering that value is determiner of success.
Each component of the business plan should be written to address the customer that the business is organized to serve. There is no other reason for the existence of the busness than satisfying the needs and desires of the customer. (I wonder how many times I have used the word customer!)
Customer Acquisition Cost is an accounting and budgeting line item that reflects how much money is spent to earn a new customer. This cost is usually amortized (deducted from customer revenue) over the life of the customer experience. If you are spending more to get a customer or sale than the sale is worth, you are losing money and will go out of business!
This is precisely one of the reasons you must know what business you are in -to gain an understanding of the market and industry to evaluate and research what the financial norms are for that market.
-Who your customer is, so that you target your business and marketing efforts on attracting and gaining the customer who will provide a profitable revenue stream over the lifetime of the relationship or transaction.
For example, major printer manufacturers sell inkjet printers for very low prices, and at most break-even on the sale of the printer, because the replenishables (toner and paper) are where they make their profit! The customer acquisition cost is lowered in the intial customer "capture" by selling the printer very cheaply, and the profit is recouped over the life of the customer relationship because one must buy toner in a cartrige that only fit's that manufacturer's brand and model of priner. Over the life of the printer, the manufacturer has "recaptures" their customer acquisition cost several times over! (This is also an example of a "Business Model" -see below)
-How you add value, and thus justify charging a market premium by focusing on the sement of the market that will pay a premium for the products/services you deliver.
Competing in a "mass market" indicates that you must spend as little on customer acquisition as possible, as these are likely FMCGs, Fast Moving Consumer Goods that compete on the market with many alternatives and substitutes and likely profit margins are probablly thin.
Work the plan, accepting that market conditions and feedback will naturally lead to adjustments. That's OK, ensure that your plan does not change so radically that you find yourself in a new market with new customers that your business is not organized to serve. If you do, stop. Rethink your plan and strategy and again review questions 1-3 above.
Remember: There is NO SUCH THING as failure, only unintended consequences.
Key Words: Business Model
(also called a business design) is the mechanism by which a business intends to generate revenue and profits. It is a summary of how a company plans to serve its customers. It involves both strategy and implementation. It is the totality of how a business:
* Selects its customers
* Defines and differentiates its product offerings
* Creates utility for its customers
* Acquires and keeps customers
* Goes to the market (promotion strategy and distribution strategy)
* Defines the tasks to be performed
* Configures its resources
* Captures profit
Types of business models
Generally, the business models of service firms are more complex than those of manufacturers and resellers. The oldest and most basic business model is the shop keeper model. This involves setting up a store in a location where potential customers are likely to be and displaying a product or service.
Over the years, business models have become much more sophisticated. The bait and hook business model (also referred to as the "razor and blades business model" or the "tied products business model") was introduced in the early 20th century. This involves offering a basic product at a very low cost, often at a loss (the "bait"), then charging excessive amounts for refills or associated products or services (the "hook"). Examples include: razor (bait) and blades (hook); cell phones (bait) and air time (hook); computer printers (bait) and ink cartridge refills (hook); and cameras (bait) and prints (hook). An interesting variant of this model is a software developer that gives away its word processor reader for free but charges several hundred dollars for its word processor writer.
In the 1950s new business models came from McDonald's Restaurants and Toyota. In the 1960s the innovators were Wal-Mart and Hypermarkets. The 1970s saw new business models from Federal Express and Toys R Us; the 1980s from Blockbuster, Home Depot, Intel, and Dell Computer; the 1990s from Southwest Airlines, eBay, Amazon.com, and Starbucks. Poorly thought out business models were a problem with many dot-coms.
Each of these business model innovations can give the firm a sustainable competitive advantage. But times are changing and companies must continuously rethink their business design. Companies must change their business models as value migrates from industry to industry. Ultimately the success or failure of a company depends first on how well its business design matches their customers' priorities.
Source: Wikipedia.com> http://en.wikipedia.org/wiki/Business_model
"Humpty Dumpty was PUSHED"
General, do you own a business or side "hustle"? I know you work MATAH, what kind of profits have you seen from that? Are blk people that are not conscious easy to sell on those products??
At this point my greatest concerns are expansion and using present clients to reach potential customers through their networks. Essentially using them as advocates and letting them tell my story. Expansion has included several should i/will i open an office or should i continue to work from my home. Expansion is particularly frustrating because it requires extra time and taking more jobs and either outsourcing or hiring (if only temporarily) other people to do jobs that i prefer to do on my own. (if you want it done right....)
In St. Louis it is also very hard to get people to share work and contacts. Myself I have given out contacts that worth upwards of $30,000 for a single contract. I think that person in particular reciprocated with a contract that was worth only $500. Talk about short end of the stick. lol In any case, we need to be less intimidated of losing work to one anothe and more focused on forming teams and building work together. I have one company that I can always count on to share work. The rest are touch and go.
All is Well. Workin' Hard - Tryin' to Save Time for Fam. Check in Periodically.
I hope all is well. MATAH has changed and shifted over the years. Many people left MATAH after Ken Bridges was assassinated by the D.C. Area Sniper. Many left due to the relationship with Dudley Products. Many people had problems with Dudley's history of Perm's and Relaxer's. I got with MATAH becasue they were pushing books. Though many folks did not read them. MATAH started out as incorporating a Study Group as a part of the program. A National Study Group/Collective Investment/Purchasing Program. I still buy some of the books, though there is a missing Consciousness part. There is not an emphasis on studying, research, Afrocentric Identity. For years, we have debated this, was it about Making a sale or educating and raising Consciousness. That still is a part of it. I now don't want to sell nothing to an Unconscious person that is useless in my understanding.
I do balance the need to make money though for that MATAH has partnered with other companies including Compro Tax the nations largest black tax company. I think this National Network is worthy of everyone's inquiry. This National Network is called the National Black Alliance.
Since most Afrikan people are scared to "buy black" or think the idead is somewhat seperatist, how do we get the unlearned Afrikan to participate in the economic growth of the village? We have Afrikan Town coming here in Detroit and I think this is a major issue.
It is my observation that Africans in America are of the mind that "If the build it, they will come" mentality of starting a business.Originally Posted by Kefentse_Bandele
No matter whatever economic strata an African "thinks" they are in, Africans globally are an economically developing people.
I would suggest that Africans stop looking at economic development as something done "to Africans" and approach it as something done 'with' Africans.
We must spend the time and "sweat equity" in our communitites among our people to educate and get "buy in" on the imperatives of economic development.
I mean, if the development in Detroit is designed as an "I came, I bought, I went" expereince, what's the difference between that experience and an outle mall?
Most of the time the squeaky whell screaming for Africans to support Africans businesses want the money ONLY, and intend to social or educational contact with their intended market -poor and working class Africans.
This is thr primary droup if Africans who need support and education adapting to saving and incesting habits, and away from consumption -particularly retail and restaurant!!
I don't know anything about the development in Detroit, and am making no judgements.
"Humpty Dumpty was PUSHED"
Yes, it costs you none thang to have a free shop on Cafepress
just come up with your own designs and create your own prices
we have been there since 2001
Peace and Repsect
Priestess Jywanza ~)o(~
LUV My Natural Hair
(when using Cafepress link, please put in "naturalhair" for the store)
In my experience, so far, getting started was the hardest part. There is fear of the unknown and fear of failure. It is easy for procrastination to slip in at this stage, because the goal seems so far that your mind can trick you into procrastinating and believing the lie that it "won't make much difference" in comparison to the amount of time it takes for things to pick up
I have my wife to thank. Had she not challenged me and stood by my side I would have waited another lifetime. Just start. Start small by breaking your main idea down into parts that allow you sell and do business incremently.Originally Posted by Joey
(You want a bookstore, so you start by just buying a selling a few titles out of your trunk or to other stores initially, getting booths at expos etc.)
Also I want to say that "buy black' works in some areas, but not in others. I have been blessed to consult w/ black nonprofits, but lets face it, there are only so many then you have to branch out. People should be clear that they know who is going to be buying their product and if it can sustain itself w/ just one ethnicity or not and whether that means they want to do other things to avoid that situation.
All is Well. Workin' Hard - Tryin' to Save Time for Fam. Check in Periodically.
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