What are the can’t-do-without components to a profitable small business? Marketing? Sales? Lead Generations? Clients? Accounts? Finance? Copywriting? Facebook? Twitter? LinkedIn?
There seems to be a bazillion things we need to consider when running a business. When I started out, and as with many of the clients I have coached, business can seem to be really overwhelming. It is like a never-ending list of things to do. But it doesn’t have to be that way.
I want to share a story my ex-boss told me in order to help illustrate my point. Her father went to a doctor, and the doctor said that her father was in a serious condition and had to have an immediate surgery.
I am not sure if you have ever had that situation or known someone else who has gone through that experience. Knowing you have a serious condition brings a mixture of emotions and feelings. Her father felt overwhelmed and he told the doctor he didn’t understand what was happening to him and why he needed the operation.
The doctor told him to trust him because he said, “I am an expert.” Her father stood up and said, “How I can trust or pay someone who can’t explain what he does for a living”?
I am sharing this story because this is just an example of how many businesses think making money works. Many of you may be are aspiring experts in whatever field you intend to sell, but the thing with experts are that they underestimate what their clients want. Just like the story of my ex-boss’s father who was supposed to buy an expensive surgery, some experts spend hundreds of hours building products/services that customers may not need.
I learned about business I was 14 when my mom refused to pay for my painting classes and equipment. She said that it had been a couple of years and if I really wanted to paint, I should start to sell my paintings to pay for my own classes. That’s how my first small business was born.
You can imagine, a 14-year-old artist’s work was not valued for very much, but I learned early on that it was a lot easier for me to sell paintings when I found out what my customers wanted. I realized I had access to a lot of love-struck high schoolers and it would be easier to sell them a romantic, customized birthday or Valentine gift for their girlfriends/boyfriends. I was able to charge more for busy times and as a result I was able to pay for all my classes and supplies.
So why do I share this with you? I wanted to share with you the bare minimums of business that many people forget. If we remove all the layers and bring it to the core, business is simple. Essentially it boils down to two main components:
This structure may seem ridiculously simple but it’s also ridiculously challenging to set up. It is based on two main pillars:
As old as the time of the cavemen, we have been using business for exchange of goods and services. In order to do a transaction you need to have a product or a service to sell. If you don’t have a product/service to sell you can’t make money, therefore you are not in business. Now once you have this, an important component that is beneficial to develop is an offering where you can have clear messaging towards your prospects/buyers so they are aware this product/service is meant for them.
Let’s say you have a product or a service and no one to sell to… are you also in business? Of course not. If your prospects are not willing to pay for your product or service, then you are not making money, and thus, you are not in business. I can’t even begin to tell you how many people come up to me telling me about their ideas with not a clue of who their audience is. They say things like “my clients are working women,” or their product is for mothers. That is a pretty vague group because with a limited budget, it’s going to hard to be able to reach out to all working women or mothers. Also the fact that its hard to reach out to your market, means that many people waste time and money building products that nobody really wants. Whether you are in the tech space or face-to-face space, you can always start selling your products before you start to invest. One of my clients runs the Triple Edged Project and made his first $20,000 month without being registered or having fancy branding. How? He was super clear on who his target market was and what he could offer them that they would find valuable.
These Small Business Tips Apply to Big Business Too…
This does not apply only to micro-businesses; it also applies to big players. For example before, Andrew Mason founded Groupon, he founded The Point, a social initiative platform. The idea was too abstract to sell, and it didn’t have enough of a market. When he stripped down the idea, he decided to target towards discount buyers. He started off with a blog where he posted daily deals for products he didn’t even own. Once he realized how it caught on, he started to develop it further. He found his niche and that’s where Groupon evolved to become a multi-billion dollar company.
Obviously, once you have consistent customers who are willing to spend money, it’s beneficial to think of developing a strategy on how to expand your customer base and to get them more interested. It also helps to try to think of how Hollywood prepares for their launch of their movies: they prepare the campaign for the launch, which can take from several weeks up to a year.
Payment System: Last but not least, let’s assume that you have a product or a service, and clear customers. If you are unable to get them to pay you for the product, you’re not in business. There are endless ways of getting paid; do you want to get paid in the form of cash, vouchers, or even barter for something else?
Setting Up Your Small Business Systems
Depending on your type of enterprise, whether it’s a small business or a medium enterprise, the people you work with, etc. it may require you to get registered, open a bank account and even set up invoicing systems for your customers.
Now, whether you’re thinking of starting a small business or you already have one but are struggling with it, take a moment to identify? Who is your customer? What are your offering them?
Did this article bring you some new insight? We would love to hear your one key takeaway and what would you like to include it into your small business?