Many entrepreneurs with bright ideas, a vast amount of energy and business acumen falter when it comes to unlocking value and creating profit. Businesses exist not as hobbies or activities you like doing but for the motive of making profit and wealth multiplication. I am aware that sometimes where survival is a strategy it will be good enough to just break even because that allows the business to survive the storm in that economic environment. A business can choose its orientation. You can pick and choose from production, technology, finance or marketing what your orientation will be, but what is the market saying?
Gone are the days when you get into an industry for sentimental reasons. You do so because you have a clear insight that there is enough demand for your product offering. I had an input into the strategic re-organization of a small web – design business which was making loses and managed to turn it around. The focus was on the intellectual ability of the owner of the business to create great websites rather than the commercial aspect.
I share ten learning’s on what you need to watch out for and take into cognizance as you seek to grow your business.
- Customer definition – define who your customers are, what value do they bring in terms of revenue and how many of your products do they buy.
- Charge for value added products. You may not be aware of it that you are leaving money on the table. The web site business I am referring to was still offering free hosting to customers who were supposed to be paying. The correction of that unlocked a stream of regular monthly income in addition to the usual design and installation.
- Customize products – a “one size” fits all approach may backfire because different customers have different needs. Why would anyone pay for your premium product when they want a very basic solution to their problem? I segmented the customer of that business in terms of price, usage situation and level of complexity required.
- Create brands – do not sell products, invest in the creation of brand names, simple yet easy to remember. Brands can live longer and they can be stretched into other areas as leverage
- Realize that great products without great customers will result in a dismal performance of the business. Your operations and in fact every other function should have a customer focus.
- Be deliberate about what you call “value” in terms of what the consumer should expect from dealing with your company. Even satisfied customers defect, make sure you develop quality relationships.
- In a small organization, even big ones, marketing is everybody’s job. That orientation must filter from the top down if the “powers that be” are serious about making a significant impact in the market.
- Entrepreneurs have a sentimental attachment to their business. This can work to the advantage of the business if the owner of the company in not stuck in the past and allows brilliant ideas to be executed for the benefit of the paying customers and business success.
- Maximize on your strengths and manage your weaknesses. If you are very strong in one area, surround yourself with managers that will complement what you have.
- Keep your promises to your customers and create lifetime value for them and they will come back.
By John Hester