We often read a lot of riddles in blogs, and books on “How to start your business?” & “The essentials you need while running a business” The most oblivious thing we often stumble upon is that we need a billion dollar idea and keep working hard towards making it a reality!
Well I completely disagree to this, and let me explain this to you on why I say so! and also share with you 5 essentials you must have before you start a business.
1. A NICHE [PRODUCT OR SERVICES]
Now, hold on a minute! don’t judge me yet. I am sure you are already thinking that, we know this, that we need a niche product or service to sell! what’s so unique about it. At least that is what I thought when I started working with businesses. The fact about having a niche product or service means that we have to study the market on who are the clients we intend to cater too. Let me explain this, business is a numbers game, there is only two ways to make money one you sell a few products/services and charge a fortune and only cater to premium clients or sell to a large number of customers and price low and create a fortune!
When you create or select a product or service, you must focus on understanding the environment this particular product caters to and influences and whether your products prices or profits are directly or indirectly influenced by these factors and to what extent.
Let me give you an example to help you understand this point further, Imagine you are in business of selling old cars, and spare parts. The prices of your cars are dependent on factors that you can or cannot directly or indirectly influence. i.e. Factors you can influence, i.e. cars are more safer to ride for teenagers who are prone to speed compared to a bike, creating an artificial demand for a product to attract millennials. Factors you cannot influence, the prices of the cars go down in areas with adverse climatic conditions such as extreme humidity, but you assure your buyer that you offer spare parts of all these cars at all times at the best price. So though your product is a car, but you are offering other inclined services that includes spare parts, car washing, mechanic shop etc. Which may look like you are shifting your focus from your main product, but that’s not the truth.
I always say that you must not look for a backup when you do business, here in this case it is not a back-up instead your underlying business.
Let me explain this to you in detail in my next point.
2. AN UNDERLYING BUSINESS MODEL
Well, I am certain you all may have had a chance to read through the life journey of successful people, and have watched a lot of videos on their habits and best practices, but nobody talks about their real journey and what really their business is. Until Ray Kroc, the founder of Mc Donald’s Corp first revealed a view on the same.
The story goes that once he was invited at Harvard University to interact with the students, they had a lot engaging discussions through out the day, in the end of the day one of the students invited Ray for a casual drink at a bar. He agreed, as he always enjoyed company of young minds. At the bar everyone raised a toast to Ray Kroc on joining the league of the youth. Soon, Ray asked a question to them, ” Can anyone answer, what really is my business?” Everyone in the room burst out with laughter, thinking it was a joke. One brave sole decided to answer, “Of course who does not know your in the Hamburger business Ray.” Ray smiled and replied, “That is what everyone thinks that’s the business I do, well that’s not all! He took a quick sip of his drink and gulped it and said, ” I love my hamburger business, but I love the real estate too!
Now if we are to think about this carefully, isn’t he right. We often see a McDonald’s mostly open on the land where cost of the land prices are sky high, so even if the burgers don’t do good, they can at least sell the land off at twice the profit!!
3. BUSINESS PLAN
I know that a business plan is something that we all know is important. The only problem is that we often think its fancy or we end up using a lot of time making it ourselves and end up with not starting our core business.
Well let me help you understand when do you really need a business plan and whether it really boosts your businesses opportunities.
The first thing is to clear the difference between freelancing and a business. In freelancing you do everything in your activity from being the HR, the Salesperson, Marketer, PR, Finance Manager, Strategist etc. If this is your story! Then what you are doing is not a business, though you follow the ideals of a good business. Here even sole proprietor can be considered as a business as he/she is offering a service but ensures to manage the leadership goals with a vision and employs others to manage miniscule tasks.
I am sure that many of you think that its wrong, who said that single person alone can’t run a business? Well i didn’t say that! What i am saying here is if you are managing all the tasks of your organization by yourself then its freelancing not business. because imagine how can expand something when you do not have the manpower to do so, and also managing a business and freelancing requires different skillsets, commitment and also mainly a vision.
So if you are not freelancing and you actually are running a business, then lets get on with our discussion. A business plan helps you define, engage and identify your opportunities and challenges that you and your business may come in contact with. It is not necessary for you as an owner of the business to do this yourself, you can hire experts to create a business plan for you. The most important reason why a business plan is useful is when you plan on bringing in capital investments from banks, venture capitalists or private investors in your business in order to expand and showcase your business potential and how it can actually bring in returns if only it was backed by investments.
4. HIRE CONSULTANTS
If you are new to startups, or maybe you have a strong technical background but lack sales, marketing or PR skills, then always hire consultants to support you in achieving your business goals. Today hiring a consultant is far cheaper and lucrative compared to hiring an employee. The best part is they are still your intangible asset. Often times many startup owners have a sense of fear that they don’t prefer sharing their business details or supporting information to their consultants, thinking that they may steal their million dollar idea, really?
Well always try to work out a deal that is win-win for both parties, specially if your are working with sales consultants, engage in a model where you can either share your best price that you intend to earn and ask the consultant to sell it over and above the same, so he/she may get the liberty to make his earnings based on his skill set and you would always end up making a profit in every deal!
5. GREAT WORKING ENVIRONMENT
I know this is not much of a giveaway, but we do know that small things make huge differences. Like for example, if we were to add just a pinch of salt accidentally in your coffee, but later you added some sugar to compensate the same, your mind is still stuck with it being salty though in reality the salt actually helped the coffee to get more sweeter (I know most of us have a sweet tooth, but i do not recommend you trying this out, if you really intend to test this then try it in a glass of water, cheers!)
Similarly a good working environment will help you stay organized, fresh and enthusiastic all throughout the day to work on your goals and objectives.
We believe this blog has helped you get a clear information, good luck with your future ventures.
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