Investing in your own venture is one of the most important decisions you will ever make. The physical and emotional challenges are huge, and you need to have the determination and resolve to make sure your own business will prosper. In the first part of this series, we have talked about low capital infusion for starting your own business. On this second part, we are going to assess some of the biggest opportunities in business but may require bigger startup capital.
A $50,000 capital is ideal to buy your own franchise. The good thing about this is that you don’t need to develop your own business operating system because everything will be handled to you in package. The only downside to this is that you will not be carrying your own brand because you are franchising an already established business name.
Here are some franchising ideas under this price range:
In general, buying a business under $100,00 will reduce the risks of not carrying out various tasks such human resources, operations, sales and marketing, legal compliance, customer service, finance management and accounting, and a whole lot more. When you buy a franchise business, the foundation of the venture is already developed and its operating system as already been tried and tested and came out successful.
Here are some franchising ideas under this price range:
As you plan to get involved in a type of business that needs more capital to get started, it tends to become little more complex because of the amount of capital you need to infuse. However, they also offer more opportunities of growing into larger more established enterprises. You don’t necessarily need to franchise them. Since you have the money, you can develop your own business plan and create a brand that you can call your own.
Here are some business ideas under this price range:
Franchising a business is one of the fastest ways of becoming a full pledge entrepreneur with this amount of capital. At present, among the cost effective and practical franchise opportunity is the food industry, convenience store, and coffee shops among others. So if you are looking for a better way to pave your road towards becoming a successful entrepreneur, getting into the franchise business is the most lucrative way to invest in a particular business.
Other popular industries that offer franchise for sale within this price range include 7-Eleven, Ice Cream, Starbucks and Nando’s Franchise. You are not simply buying an existing business but you are buying a business model and operating system that is proven to make money and generate hefty profits.
The reason why some ventures fail is because the business owner does not provide the right of products or services or the target market is wrong. But with this amount of capital, you need not be wrong with your options.
Some of the businesses you may consider under this price range include:
Need more business ideas? Here are the best businesses to start in 2020 - Part 1
With myriad of business ideas for the year 2019, it can be quite difficult to figure out which have the more potential for growth and expansion for 2020. You will want to establish a business that is not only lucrative for the current year but can withstand market changes for the long term. In this list, we have compiled several business ideas that have seen recent growth previously. And because this list is based on the amount of startup capital you need, it will be a lot easier to browse for a god business to invest into based on your current budget.
Although joining a new trend may pose some risks on your investment, it may prove to be highly profitable and rewarding if your business idea takes off. Some of the business ideas we have included on this list have always been popular for years making it less risky but more competitive. But on the other hand, every business niche will certainly help make you money so choose wisely.
You don’t need a ton of capital to start your business. If you have $1,000 or less, you can start a business as long as it is within your interest. Here are some business ideas under this price range.
Investing bigger capital in a business means you are serious about its development. One of the main advantages of a bigger capital means stability for your business because you can purchase more assets for your business. Here are some business ideas for this price range.
Some of these business ideas can be launched with less than $5,000 but it will give you more leeway for asset investment. An infusion of funds into these types of business is always a welcome because it helps build more stability. A lot of businesses usually try to raise capital for their business but you don’t really need that much if you know where to start.
Having a bigger startup capital means being able to invest more in your business. Here are some business ideas that fall under the $10,000 price range.
A capital infusion of $20,000 to $25,000 can already buy a franchise business. Here are some business ideas you may want to consider.
Need more business ideas? Here are the best businesses to start in 2020 - Part 2
KPI’s (Key Performance Indicators) are very important for any business. This is critical for evaluating your business's financial performance and it can also be used for monitoring customer satisfaction and other company objectives necessary for the growth and development of the business.
Too often we see business owners be unsuccessful in fully understanding how their business operates. And because they fail in logging in any existing departmental metrics of their company operations all throughout the year, these entrepreneurs often end up with an idling business pondering where the problems lay
Key Performance Indicators are a significant part of measuring or evaluating the successes and failures of any business. KPI is a measurable value that shows how successfully a company is achieving key objectives for the business. Various business organizations use KPI’s to assess their success at reaching targets that is why selecting the right KPI’s will depend on the industry the business belongs to and which part of the business the company is planning to track.
Also known as a dashboard or flash report, KPI’s enables business owners and department heads to get a summary of how the business or individual departments are performing at any given moment throughout the year. A KPI evaluates the objectives of the business against the concrete, tangible data over a specified period.
But not every key performance indicator measures the overall performance of the business. This depends usually on the size of the business. Bigger corporations with multiple departments often have multiple KPI’s assigned to each department. Different departments have different operations and scope of work so the KPI must be specifically patterned to this. But even with having multiple KPI’s, each report must be tied together into a single flash for the business as a whole.
Key performance indicators can vary over multiple businesses. For example, the KPI for a distribution company will differ from a manufacturing company, and so on and so forth. Even similar companies within the same industry can have different KPI’s since not all businesses have the same goals and metrics. These key indicators are existent and monitored in most businesses for different reasons. In a flash report, these are evaluated meticulously and put under a magnifying glass so they can inspect it with a fine-toothed comb. When accomplished weekly, a flash report will show business owners the important areas of the business in which the company is underperforming and provides time for correction.
KPI’s are essential to all business objectives because they enable these goals to be at the forefront of every decision making. It is important that business objectives are properly communicated across the company because when people understand and are responsible for their KPI’s, it will make sure that the business objectives are on top of their minds. Simply put, you cannot manage anything what you cannot measure.
A KPI is as versatile as it is strong. From evaluating your finances to measuring the productivity of your employees based on the status of a job in progress, KPI’s are put in place to help an organization be guided in achieving their goals. Depending on what objectives you plan to achieve, your KPI may shift or vary depending on your goals, current project and timelines.
For example, by knowing on a weekly basis just how much money is coming in and going out, it provides you just enough time to correct the course when something is wrong. Instead of fixing the problem twenty days after the end of the month, you can now make necessary modifications throughout the week based on KPI management tools.
For measuring employee productivity, you will see things such as the number of hours an employee worked on including overtime, revenue generated and the status of a current job that is up for completion. When evaluating the work hours of an employee against performance, this can provide you with a general idea of the number of overtime needed to complete a specific project and help you see if you paid overtime for a much lesser productive work. For bigger companies, using KPI for employee’s productivity can also be used to measure performance for every department.
KPI’s serves as your guide to recognizing every moving part in your business, and may possibly just be the most essential part of management. This is why it is equally important to choose the right KPI’s to implement for your business. To do so, you need to know the process of selecting the right KPI for your company such as:
The KPI’s that you choose to implement for your business will be greatly influenced by your company’s existing business model and the industry that your business belongs to. For instance, a B2B software service company may opt to focus on customer acquisition and mix, while a retail company with a brick and mortar operation may focus on sales per square foot or average customer payout.
It is highly recommended to use KPI's template, to help you track your business performance and progress.
As an endnote, always makes sure that your KPI’s will specifically measure your progress towards overarching company objectives. Less is more so you have to understand that choosing between 4 to 10 KPI’s to focus will be more beneficial for your organization. The significance of certain metrics will definitely vary as the priorities of your organization changes so you have to carefully consider the stage of growth of your company. And while you may reference industry KPI’s, always remember that you need to choose the KPI’s that are most relevant and applicable for your specific situation and organization. This will ensure that you are being guided towards something attainable which will result to the success of your goals.
If you are planning to buy an existing business, there are several things you need to think about before making the purchase. Buying a business is a little complicated than most people seem to think and there are various issues that need to be addressed in order for you to make your choice of investment successful and more profitable. Small business for sale can be very profitable if you are able to properly structure it.
When you are evaluating a particular business option you are interested to buy, you have to know certain aspects related to the business like whether the place of the business is owned or if it is being leased, and also some determining factors that can significantly influence the price or ability of the business to earn profits in the long run.
Here are ten essential things you need to understand about buying a business.
When someone offers you to buy an existing business, no matter how attractive the selling price is, you have to know first why the business is for sale. You need to find out if the business is failing or the owner has simply lost interest and wants to retire. Or maybe there is a new competitor in the area that poses real threat to the business. Also, you may want to ask if the current owner already had offers for his or her business and ask why the deal did not push through if somebody already offered to buy it.
It is not rude to ask for the company’s financial records when you are buying a business. At a minimum, you can ask to evaluate at least three years’ worth of financial statements just so you can have an idea of how well or bad the business performed during those years. It will be best to have an accountant or financial auditor go over the figures because they have the expertise to look at these statements with a fine tooth comb.
When buying a business, you need to know if the industry the business belongs to is stable. To understand this, you have to study the industry statistics to see if it is growing, matured and secured or gradually diminishing. Buying a business is an ultimate investment and you do not want to buy something that belongs to an industry that is slowly losing its market appeal. If the industry continues to grow and stable, it means that the business you are buying is from an established market segment that is not just a fad.
When you buy a business, you must have future plans for its growth. So if you want to grow and develop an existing business you are planning to buy, you must know firsthand how to plan to achieve it. What expertise and skills will you bring in and do you have the necessary business connections that will allow you to accomplish your plans. The value you can add to the business is a significant advantage that allows you to develop it and make it more profitable.
One of the characteristics of a successful business is its profitability. You don’t want to buy a business where you will inherit financial obligations from the previous management. Make sure there are no unpaid taxes, payroll or healthcare obligations. In some states, tax authorities may come after you if you purchase a business with payroll and other business taxes obligations from the previous owner. It is best to avoid legal complications by doing your research and making sure that all financial obligations of the company has been settled before you make plans of purchasing it.
Make sure you totally understand what you are getting yourself into before you buy an existing business. Contracts and agreements are essential to a performing business but you have to understand what these contracts are and what it contains. Does the business have existing employee contracts, sales agreements, terms of sale, supplier contracts, and rights of renewal. Depending on how these contracts were penned, some agreements may last for a number of years after you have bought the business.
Developing a business and seeing it grow is a very tough task even for an experienced entrepreneur. So when you buy a business, you need to make sure that it is compatible with your passion and expertise. You don’t want to buy a mom and pop diner when your passion is into car parts and accessories. If you think the service or product is not within your line of expertise, then it is probably not an ideal line of business for you.
When you are planning to buy an existing business, another important question to consider is will the current owner stay on in the business, and if so, for how long? Ask about the transition period, what will it cover, and what training is included. You also need to know which key staff remains in the business.
Buying a business does not end when you purchase the tangible assets. You are also buying an existing brand so you need to know what other intangible assets those come with the purchase so you would know if the price is ideal for its value.
To really know the price of the business you are buying, you also need to know the method used in calculating its value. Did the previous owner used a discounted cash flow valuation method or was the price based on existing assets? Was the price based on recent comparable sales or earnings multiple or a combination of any of these valuation methods?
Buying a business can be very profitable venture especially if you are armed with the right information. Knowing the things you should do before buying will ensure that your investment will have a chance to grow and earn you huge profits in the future.
Well, it’s a fancy word for “testing your new business idea”. The concept is quite simple, you want to figure out whether an idea is worth pursuing, before driving in. In this article, when we refer to “product” this also includes “services” based businesses.
The rate of business failures is pretty high.
According to the Small Business Association (SBA). The SBA states that 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10 years (source).
So, it goes without saying that most of us would like to know if our New Idea is worth the ink on the paper!
No one wants to spend years of hard work, thousands of dollars, and the frustration and stress that comes with being a business owner, only to discover that the idea you had, didn’t have legs to start with. Problems identified are problems avoided.
The below guide is an outline of how we test our business ideas. Validating your business idea is different for everyone, and it differs from industry to industry.
Apply what works best for you.
When evaluating your business ideas, GO BIG!
What does going big mean? Well (unless you’re a seasoned entrepreneur, Venture Capitalist or otherwise) throw out as many ideas as you can.
As a rule, when I want to come up with an idea for a new business to start, I’ll make a massive list. 100 ideas are not too many. Then, I’ll narrow it down to the 10 best ideas from my original list. And from that list of 10, I’ll decide on three ideas that I’m going to test/validate. And finally, from that list of three, I’ll start the idea I feel the most pumped about.
All too often, I see people running with the first idea that pops into their head.
When narrowing down your list of ideas for a new business, you may want to create some criteria that will help you. Here are a few examples of criteria you might use to cut your list down to 10 prospects.
What some entrepreneurs fail to understand is that ideas succeed or fail based on “Value”. At the end of the day, customers are buying value. To provide more value than your competitor, you need to offer something different, better or ideally both.
I’ve often seen people come up with ideas that are the same as existing ideas, with small, insignificant changes, and they think because of this tiny change, people are going to fall over themselves trying to get your product.
In reality, most people don’t care.
This is something to think about when analyzing your new amazing idea. Will your product be a 1.2 version of an existing product or a 2.0 version game changer? How are you going to drive value?
Most businesses fail because of a lack of research and planning!
We can all agree that there are many reasons why businesses fail (planning, cash flow, leadership, marketing, executing etc). But if you don’t do some thorough research up front, you’re not exactly off to a great start!
If you’re thinking about starting a business and prepared to sacrifice years of hard work, significant amounts of capital, then you should be prepared to do a little research before you pull the trigger.
It’s okay to spend 400 hours gathering information and researching your idea. I know of entrepreneurs who spend significant amounts of time gathering intel on certain industries before deciding what they will do.
If at the end of your research you decide that your idea is not worth perusing, then that might be the best decision you have ever made.
Walking away from an idea is okay.
Download your free Business Idea Validation Checklist:
Google it! YouTube it! Amazon it! eBay it! Aliexpress/Alibaba it! Google Play it! Apple Store it! Business Directories it!
The first thing you need to do is conduct some basic online research, this may seem oversimplified for most, but you would be surprised how many people neglect such a simple task.
Depending on your idea, you’re going to search from the list provided above.
The focus here is to:
This first step is basic, and it’s designed to immediately quality or more importantly disqualify any ideas you may have.
What are the customer reviews telling you? Where are the opportunities to improve or create a better product/service?
If your idea is a physical product, you may want to identify similar products that already exist. Then read the feedback and reviews. You can find an enormous amount of information about products from the reviews section.
Who are the top 10 competitors in your space/area?
This is important as these are the companies you’re going to be potentially competing with. Create a list of the 10 or so direct competitors that you’ll be going up against. Use a competitor analysis template – click here to download.
This will help you get a feel for the market and what’s going on.
Sign up to all their newsletters and find out what’s happening. This will keep you in the loop with what products they are offering, and how they are marketing them.
People who have already brought a similar product or are “in-market” for your product idea. Rather than pitching them your idea, ask them WHY they brought this product? What is the value they receive when they make a purchase?
Get to the core root of what the value proposition is.
Try out what your (potential) competitors are already offering?
You’ll gain great insight into their practices.
The idea of keyword research is to analyze the top keywords for your product. This helps you gain a better understanding of the key phrases used to search your product, along with the search volumes and difficulty to rank on Google.
What’s the difference between generic terms and long-tail keywords: Generic terms are keywords and phrases that are shorter and more general. Long-tail keywords are longer keyword phrases, usually containing three or more words and more specific.
It’s important to research for both generic terms and long-tail keywords because it’ll give you a better idea of how many people searched for your potential product, this is because generic terms are generally searched more frequently, making them often much more competitive and harder to rank for than long-tail terms. However, long-tail keywords, may show lower search volumes, but can be more effective and provide “easy wins”.
Generic Term: Arborist
Long-tail Keyword 1: Price to trim a palm tree.
Long-tail Keyword 2: Tree trimming services near me.
A free tool by Google that helps you estimate the search volumes. You can filter by language and location. It also offers you keyword ideas related to the keywords you have inserted.
Is another free tool by Google. This helps you look at the trends of the search volumes for specific words and industries over a period of time.
A free tool that enables you to explore and analyze keywords by search volumes. It also tells you how difficult it will be to rank and provide suggestions for similar keywords.
This tool is similar to Ubersuggest, in that it helps you to analyze a list of keywords and discover keywords ideas. This tool also comes as a Chrome Extension that can work directly with Google search results.
A paid tool that offers a wide range of SEO features. Ahrefs allows you to research a list of keywords and analyze it by using a verity of keyword metrics such as search volume, click rate, organic and paid difficulty. This tool also helps you to explore competitors and understand how challenging it will be to outrank them.
SEMrush is a great tool that offers a wide range of keyword research functions, as well as competitor analysis features.
SimilarWeb is a tool that allows you to analyze a certain website and shows you data such as traffic volumes, traffic source, main keywords while providing graphs that show trends over time.
Regarding the above Keyword and Web Research tools, you don’t have to use all of them, just use the tools that will be the most useful to you and you’re comfortable using.
Online analysis is focused on your target audience and market size based on demographic metrics such as locations, age, gender, interests, etc.
Use Facebook Manager to get a better understanding of your target demographic. You can drill down to specific segments such as: marital status, family size, life events, etc.
Use LinkedIn Business to research professional related segments, such as job title, company size, industry, etc.
Based on the information you have gathered from the tools above; this should give you more detailed information on your potential audiences size and demographics.
What is industry benchmarking?
Industry benchmarking is the process of comparing what the industry averages are for a particular industry.
They look at things like cost of sales, expenses, average rent, labor costs, etc.
The idea here is to see how the industry is performing, and what you might need to do, or not do, in order to achieve certain targets.
By looking at the charts/images below, you can see that the Hairdressing benchmarking has been broken up into three turnover categories. ($50k – $150K, $150k – $300k, and $300k +).
Use this as a guide to see where your sales might fall.
The next axes are the key benchmark matrices.
After deciding on a particular sales range, you can then see what the industry average performance is for each matric.
Benchmarking from an idea validation perspective is a great way to eyeball the industry, and decide what the lay of the land looks like before you jump in.
If you want to do better than the industry average (in any particular area), you’ll need to have a clear understanding of how you’re going to do this.
Benchmarking is another tool we use to help us analyze our business ideas.
Industry associations can be a great place to find information on a particular industry. They often have resources, tools and useful articles that can provide tons of great data.
Because industry associations are passionate about their particular industry, they’ll know when all the conferences and workshops will be held.
Be sure to sign up for their newsletters and notifications.
When researching an idea you may want to keep an eye on what is happening within the industry, and what your potential competitors are doing.
Google Alerts is a tool that helps you keep your finger on the pulse by sending you notifications when new results are found (based off your key search terms). It automatically finds and sends you an email when new articles, webpages, blogs or research that matches your search terms.
This is one of the more important aspects to look at when validating an idea.
At the end of the day, however amazing an idea may sound, and no matter how passionate you are about something, it has to make sense financially.
Here are a few basic things you should consider from a financial aspect.
Another financial factor you could consider is, is your business idea suitable for crowdfunding? Could you utilize platforms such as Kickstarter?
If it’s going to take you a long period of time to learn all the ins and outs of an industry, then this will play a factor as to whether or not you will pursue this idea.
An example could be an Antique Dealer. Although the idea of running an antique business may sound romantic and exciting to some, in reality. Many people who are antique dealers have decades of experience within the industry and have deep relationships with estate agents and alike that keep the stock coming.
If someone was to start an antique business from scratch, they would have to have a solid plan as to how they would solve this challenge.
If your business idea is one where information is more freely available, then you need to ask yourself, how can I gain 20+ years worth of experience in the shortest time possible? What resources, programs, courses, books, and mentors can I utilize to shorten the learning curve?
What are the 25 best books on this subject that will help me?
If the learning curve is too high, then you may decide to move on from your idea. If not, you’ll have a better understanding of what you may need to do in order to shorten your learning curve and become successful in your new venture.
If your idea in an industry that is well established, why not talk to someone who is already operating in that industry. There is a good chance you won’t be directly competing with them (the world is a big place).
If you’re looking to get into a retail store, why not reach out to someone who has been in the industry for 30+years and pick their brain?
These people have seen the highs and lows of the industry. They have been through thick and thin. They have pushed through recessions, high-interest rates, booms and busts. You name it.
You’ll discover all kinds of things you never thought about, and most of the time this information will cost you nothing.
Who can you talk to that WAS in your chosen industry, but has now left?
What was their experience like? What did they learn? What mistakes did they make? What would they do differently? What advice can they give you to make your business a raging success?
What will you need to do to make $100k, $500k or $1m in profit each year?
And also ask them,
Who else do you need to talk to that would be useful to you?
Depending on the product, service, industry or sector you’re looking to target. There will be specific legalities, licenses, permits or certifications that will need to be met. Before even thinking about contemplating a new venture, you should always fully understand the legal requirements.
What might seem like a straight forward business from the outside, may be a legal minefield in reality. This step is something that cannot be overlooked.
Usually, basic information from trade and industry associations can easily be found, but it is recommended that you consult with a commercial lawyer before making a final decision.
Another important factor that is related to risk mitigation is Insurance. Does your proposed venture require insurance coverage that falls outside the norm? Are there any other forms of risk that need to be identified?
If you’re looking at an idea for a business that is in a well-established industry, then ask yourself, are these businesses for sale?
You can often obtain a bunch of information on an industry you’re interested in by searching for those businesses that are listed online on websites that specialize in selling or buying business.
Start by creating a list of businesses within your chosen industry, then break them up into size, location, years in operation, etc (whatever criteria works for you).
Then analyze the multiples (prices) based off that. You’ll get a feeling for what businesses in this industry are being offered for, and how some of the businesses are being run.
Often Cafés when being sold will tell you how many lbs of coffee they sell each week. They will also tell you what the turnover is.
You’ll easily be able to find out what they are paying for the coffee per lbs, and how many customers they serve each week. This will give you a gauge as to what the profitability is.
You can then compare this information to every café you look at. This is a basic first step, from here you can drill down on more specific details.
How many tables and chairs do they have, size of the café, foot traffic, parking, public transport, competition near by, Google reviews, selection of food, etc.
This is all useful information when validating your new idea.
When looking for bricks and mortar type businesses, you can google search to find local listings.
But if your idea is website related, you can use sites such as Flippa.
Seeking feedback is another crucial step in the validation process. The feedback stage can give us unique and detailed insight into our product or service.
It’s much more important what others think about our idea than ourselves, after all, they are going to be the customer.
Surveys are a great way to collect quick feedback on an idea. They are easy and fast to set up.
Keep your surveys short, specific and easy to understand. Use pictures where appropriate.
Surveys work best with a little motivation like running a competition for those who fill out the survey.
Reddit, which is known as the front page of the internet, is another great tool to help you gain feedback. You can create a post whereby you seek feedback on your idea.
Popular subreddits that can help you do this include:
Before posting on a subreddit, do some hunting around to see if you’re in the right subreddit, there may be some useful information that has already been posted.
Redditors are notorious for being brutally honest. Be prepared to receive feedback that is more honest than what you may be used to. Remember, the feedback is based on your idea, not you personally.
Depending on your business idea, social media could be a great place to seek feedback.
The major social platforms for business include Facebook and LinkedIn.
Within each of these social platforms, there are a large number of groups that can be specific to your niche. Target your niche for the most relevant feedback.
Be sure to also search for groups on social media that are dedicated to entrepreneurs and business owners.
Helpful links to seek feedback:
Facebook Business Groups
LinkedIn Business Groups
Create a list of people who can give you some quality early feedback.
These could be friends, family, people you have worked with, customers, suppliers, employees etc. It really depends on the idea you’re researching.
Go through your phone and emails and create a list in Excel of those who will be suitable.
This is where you can get creative.
You can write an email, or create a video, use images, your options are endless.
All you’re trying to do is get some early constructive feedback on your idea.
Tell people you’re looking for feedback on your idea and that you’re not emotionally invested in it. This will ensure you get the most honest feedback possible.
The Lean Canvas is another tool that you can use in your idea validation process.
The Lean Canvas is a tool that is specifically designed for entrepreneurs, especially those who are looking to test the potential of an idea. It helps people focus on problems, solutions, key metrics, suppliers, must-wins and competitive advantage.
If you have never used the Lean Canvas business model before, then you should definitely check it out.
It is simple, easy and straight forward to use. Click here to download the Lean Canvas Template.
When researching your business idea, there is a multitude of information that can be gathered from government statistics sites.
Governments regularly collect information on industries and business-related data.
This information can include areas such as:
Key Economic Indicators, Business Indicators, Industry Overviews, Price Indexes, etc.
With this data, you can better analyze the landscape in which you plan to operate in.
When thinking about your business idea, ask yourself, how will you create a competitive advantage? I.e. What advantage will you have over your competitors?
Note: Even if you don’t have competitors straight away, you will in the future.
Will you compete on quality/differentiation? Or will you compete on price and be a low-cost provider?
Examples of competitive advantage could be something like:
Compete on Price: Selling a standard Gym membership
Compete on Differentiation: Specialized unique new fitness training system
Compete on Price: Selling generic canvas prints
Compete on Differentiation: Creating one-off unique art for sale
So when thinking about your new business idea, and you have an understanding of what your competitor’s pricing points are, ask yourself, how will you gain a competitive advantage?
Will you offer an amazing product with world-class service? Or will you come in at a lower price point to go for volume?
Barriers to entry is something that is often overlooked. Barriers to entry is, how hard or difficult is it to enter the market.
Setting up a dog walking business is easy, there are no licenses, certifications or permits that are required. You don’t need degrees or special education to start this business.
Whereas, starting a company that builds bridges is hard. The barriers to entry are high. To start a company like this you would need tens of millions of dollars, a team of highly experienced and skilled engineers, strong networks and a proven track record.
The idea behind barriers to entry is, (generally speaking). The higher the barrier to entry, the less competition there will be.
If the barriers are too low, then competitors will be fierce, thus, it could put pressure on your profit margins.
I.e. (often), the lower the barriers to get into a business, the lower the profit margins.
Google Ads/Facebook Ads (+Others)
If you have gotten this far through the validation process, and your idea looks like it might have some potential, then it may be the right time to spend a little money on testing your idea.
A great way of testing your idea is to run a mini online ad campaign.
You can set up an advertising campaign (with a small budget) and see how it performs. This will tell you if there is any interest at all in your idea. It’s an effective way to test your idea, before jumping all-in.
Say your idea is to sell workshops (classes) to self-employed retirees, who are in your area.
You could either set up a Google Ad campaign based on your keywords. Or create a Facebook Ad campaign based on your demographics.
Ideally, you want to set up a landing page to redirect traffic from this campaign. This page should include an email capture form for people to register their interest.
Another great tool you can use to gain insights is Google Analytics. This will enable you to see the source and behavior of traffic.
In order to succeed with paid online campaigns, its best to try different titles, headings, keywords, and creatives to make sure it is as effective as possible.
Validating and testing your business idea is one thing, actually starting it, setting it up and operating it is another thing entirely.
Ask yourself, do you have Passion for this idea? Be 100% honest.
Passion is really important and can’t be underrated. It’s one of the single biggest factors that will determine your business’s success.
When starting a business (especially in the early stages), you’re more than likely going to have to do a large amount of work that you will not get paid for. You may have to give up evenings, weekends and family time.
If you’re not 100% in love with your idea, it might not be the right time to kick things off.
Ranging from 1 through to 10, how passionate are you about this idea?
When thinking about building your MVP, think Speed!
You want to build a cut-down version of your product. The key thing here is to go through the iterations (variations of your product) as quickly as possible and gain early feedback while keeping the budget low.
You want your MVP to be just good enough so that people can have an understanding of what the offering is, without you having to go overboard on product development.
The idea that you have, may change drastically after you have received feedback from others. The goal is to use this feedback to make the necessary adjustments to your product.
Some ideas that could help you with your MVP development:
Did your MVP pass the test?
Download our Checklist to validate your business idea:
Read more about how to use our Free Business Idea Validation Checklist, including a short instructional video on how to validate your business idea using our simple checklist.
The below infographic covers key areas of the validation process:
How you validate and test your business idea will be largely determined by the idea, criteria and what you’re looking to achieve.
What some may view as an opportunity, will be overlooked by others. Timing too plays a big factor. What looks like an opportunity at one point in time, can be eroded over time due to any number of factors.
The main thing is to collect and analyze the required information for your specific idea, so you can make a better-informed decision moving forward. Gaining information about an idea, sector or industry is vital for success.
What do you do when validating a business idea? Share your knowledge.
We know that marketing activities can sometimes be a drag. It can often be hit and miss, all over the place and you occasionally don’t know what you’re doing.
It’s really important that you have a “Marketing Process” that is simple, effective and most importantly streamlined for efficiency.
This is even more important if you have a small business that doesn’t have its own marketing department or dedicated marketing person.
In a previous article, we’ve put together a guide to the best marketing tactics for 2019 – click to read.
To shed more light on how to improve your marketing efforts, let us tell you one of the marketing tactics we recommend at Strategy State.
Today we’re going to show you a VERY effective growth hacking marketing tactic.
It’s called the Power 9 Growth Hacking Tactic.
The goal of this marketing tactic is to spread your message as far and wide as possible and to squeeze as much value as possible from your marketing efforts.
1. Create a Resource / Free Tool
This could be a chart, template, white paper, checklist, eBook, how to video, etc.
2. Create a “Free Download” landing page of the Resource/tool you have created
Insert an email opt-in to collect email addresses.
3. Write an article about it
In that article, you need to add a link to the free tool or resource.
4. Email Marketing – Add the links to your article and free resource
This helps drive traffic to your website.
5. Create a short video (up to 5mins) about your free resource
Show people the benefits and how to use it. Add this to your YouTube channel and other platforms.
6. Post your free Tool / Resource in Social Media
Facebook, Instagram, LinkedIn, Twitter, Pinterest & other social platforms you’re on.
7. Repost your content 4 – 6 times per year.
This will give your content the maximum amount of exposure.
8. Post it on other people’s sites/platforms
Identify as many other sites and platforms where you can share your content
9. Continue to create multiple free resources and repeat
I.e. 1 X Free tool + 1 X Free Download + 1 X article + 1 X Email Marketing + 1 X Video + Post on Social Accounts + Post 4 – 6 times per year+ Post on other platforms + Create additional resources
This is how it works:
Your free tool can be a chart, template, white paper, checklist, eBook, how to video, etc.
Free Tool example: Time Efficiency Tracking Tool
Now, what is the point in giving away free resources? Isn’t that what you are meant to be selling?
Well yes and no. Firstly, it’s important to know that you need to give away A LOT of value in order to receive value in return.
One of the goals of creating free content is that it helps brands you as an authority within the industry. If prospects go to your website or social page and see you have dozens of posts, content, articles, freebies, etc. They’re typically going to view you as someone who knows what they’re talking about. Especially if the content is good.
Many people think that if they give “free stuff” away, then prospects won’t buy their products or services. This is not true.
The people that just use your free tools and don’t convert, will most likely never be your customers. They may be time rich and cash poor. While those who are cash rich and time poor will consume your products.
What free resources should I create?
Well, that really depends on the type of business you have.
This will tell you how popular certain keywords are.
You’ll then know what free tools and resources people are searching for within your industry.
Here are a few examples of free resources that have worked well for others.
As discussed earlier in step 1 this tactic involves creating a free downloadable resource for prospects.
For this to work, we need to Insert an email opt-in to collect email addresses.
Email opt-in form example: Free download the Time Efficiency Tracking Tool
Once you have created your free downloadable resource and uploaded it to your website.
You can add a simple feature to your website that enables prospects to download the resource once they have entered their email and contact details.
The goal of this step in the process is to increase your email subscribers list. The reason being is that the backbone of many marketing initiatives revolves around email marketing, as email marketing can get the highest return on investment compared to other marketing initiatives.
When writing an article, you want to describe the issue and the solution you are offering with your free tool.
In that article, you’ll add a link to the free tool or resource.
Blog article example: The 5 Deadly Sins of Business
The benefits of writing an article are multifold.
Firstly, an article supports your SEO efforts. This helps you rank higher and makes it easier for prospects to find your products and services.
Secondly, an article will help educate your prospects on the benefits of your free tool and push them further down the sales funnel. It also helps build trust and your relationship.
For best results articles should be around 2,000 words in length, contain your main keywords and 3-5 high-quality images. Make sure you keep your paragraphs short and add subtitles and lists to make it more readable. Be sure to add a clear call to action.
For more details on how to write amazing articles, check out Neil Patel’s guide here.
We have now completed steps 1 through 3:
Step 1. You have created a free resource.
Step 2. You have added the free resource to your website.
Step 3. You have written an article that supports the resource.
Now we can move on to combining it with email marketing.
Email Marketing example
If you don’t use email marketing, it’s a good idea to consider it. As discussed, earlier, email marketing can be really effective and have a high return on investment. It’s a great way to keep prospects informed and help business owners and consumers stay connected.
There is a wide range of email marketing platforms available. Many of them are free up to a set number of subscribers. These free accounts will be more than enough to get you going if you’re starting out.
Some of the most popular include: MailChimp, AWeber, Constant Contact, ConvertKit and GetResponse to name a few.
Keep your email marketing clean simple and to the point.
People are constantly bombarded with emails and are reluctant to read long-winded newsletters. To increase your open rates, use a title that will entice people to open the email. Like: “Free Tool”.
For this tactic to work, we suggest you make the email about the free tool.
Here is an example of one we have created.
Always ensure that it is super easy for your subscribers to share the free resource and or articles.
The next step is to create a video that will help you reach potential customers and drive traffic to your website. A video is a highly-engaged form of media that works well with your social initiatives.
Short Video example: Time Analysis Exercise Instructional Video
According to Animoto Video was consumers’ #1 favorite type of content to see from brands on social media in 2018.
To read the full article click on the link below: https://animoto.com
The video you create can be in a format of a “How to” video. It can showcase the article you’ve written about and introduce the benefits of your free tool.
Add your video to YouTube or any other video platform you use. You can also add the video to your website, as additional content to your landing page or article.
The goal of creating the short video is to use another form of media to help drive awareness and leads for your business.
Now it’s time to post your free tool or article on social accounts. The most popular platforms are Facebook, Instagram, LinkedIn, Twitter and Pinterest.
Social Media example: Instagram
The goal here is to spread your content as far and wide as possible and to engage with as many people across different platforms. You may not know which platforms your ideal customers are on, so you’ll need to test and measure to see which platforms work best.
When posting on social platforms, take into consideration: When you post, what day of the week and how you can create content that people want to engage with.
When posting on social platforms, quality and consistency is the key.
To maximize the effectiveness of this strategy, we recommend that you post your content 4 to 6 times per year.
This will give you the best chance for all your potential prospects to consume your content. Often people may need to see your content a number of times before they engage with you. Always ensure you’re adding value with your content. Don’t post for the sake of it. Quality is king!
For more information on this specific tactic check out your Neil Patel’s video here.
This should run in conjunction with your content marketing plan.
Ideally, you should automate your content marketing by using tools such as Hootsuite. This will enable you to preschedule and organize your social media in advance.
In this step, we will talk about two ways to create leverage using other people’s social accounts, sites, blogs.
The first way is to leverage your contents exposure is to use guest blogging. As the name suggests, you publish your content on other websites. It’s a common practice in digital marketing and is very helpful for SEO.
This involves identifying relevant sites and blogs where you can share your content. You need to find other sites that have a similar target audience to your own. Your content will need to compliment what that website is focused on.
Another way to leverage your content is to use social influencers. Influencers have a dedicated niche of followers who are passionate about a particular interest.
Influencers have built up trust and authority with their follows. If your product or service aligns with the influencer’s audience, it can be a great way to start a conversation and build a relationship with your brand.
To find influencers that might be useful to your business, try using tools like:
Social Blade.com. This tool enables you to search for popular influencers across many different platforms.
I.e. 1 X Free tool + 1 X article + 1 X Free Download + 1 X Email Marketing + 1 X Video + Post on Social Accounts + Post 4 – 6 times per year.
Now that you’ve gotten to the stage, you’re starting to become a real marketing Pro.
To make this marketing strategy fly you need to consistently create additional free tools, articles, email marketing, videos, etc. Then post them across all your different platforms, while leveraging off other platforms that get lots of traffic.
As time goes on, you’ll get much quicker at creating an organizing content.
This strategy does take effort but is designed to squeeze every last drop out of your marketing efforts. Over time you’ll see great results as your influence and brand grows.
Your ranking will improve, your inquiries will increase, and you’ll gain authority which will lead to additional sales.
Part of being in business means that we’re always testing new ideas, experimenting and yes – making mistakes.
As entrepreneurs and business owners, we all strive to buy a high learning curve position and to reduce the number of mistakes we make.
There’s nothing wrong with making mistakes; the only issue is if we don’t learn from them.
Mistakes will be made, and that’s ok, but there are a few critical sins in business that can and should be avoided if possible.
Below is a list of the five key sins that can be deadly for your business.
Recognizing and avoiding these sins will help you grow and develop your company, it will help you reduce your risk, increase your chances of success and most importantly enable you to have more fun while operating a business.
We all make assumptions on a day-to-day basis, and that’s human nature.
The issue arises when we make assumptions within a business context that can have disastrous results.
It’s essential that we continuously test our assumptions on a regular basis. What may have been true in the past may not be true in the future, and with technology moving at such a rapid rate, we need to be constantly adapting.
By not seeking feedback or validating our concepts, we can head down the path of mediocrity.
Case in point, I was working with a client one day, and we were identifying the top and bottom 20% of his customers.
I asked as I always do, how much does it cost to service each client? The response was “$400 per month”.
I said “fine, and how much do the smaller clients pay you each month?”
The response was “$250 per month”. I looked at the person puzzled and said, “Wait, you charge them $250 per month, but it costs you $400 to service them, is that right?”
He looked at me begrudgingly and said: “Yes, but the smaller clients turn into bigger clients!”
My response was “Okay,
Let’s check all the big clients and see how many of those started off as small clients.”
By this stage, the client was reeling and becoming very defensive.
Sure enough, when we checked, all of the big clients had started out as big clients, and none of the small clients had turned into big clients.
This means it would have been cheaper for the company just to write out a cheque for $150 per month to the smaller clients and have done none of the work!
This assumption had cost the company over 1 million dollars over a 10-year period.
No one had thought to check the assumption of whether or not small clients turn into large clients, or if in fact, it was worthwhile engaging with small clients in the first place.
As it turns out only 4% of companies have systems and in place.
Funnily enough, only 4% of businesses do over a million dollars a year and turn over.
This strong correlation indicates that business that have systems and processes in place do far better than those they don’t.
More evidence can be seen if we look at franchises and chain stores. These companies all have strong systems and processes in place. When someone buys a franchise, what they’re buying is a proven set of systems and processes that will ensure their business succeeds.
As a business owner, do you have systems and processes in place? Especially for the ten most common tasks in your company?
The reason why systems are so important for companies is that they provide accuracy and consistent outcomes.
This is great for managing customers’ expectations and experience, but it’s also valuable for your employees.
Employees need to know what the process is for each task, if they don’t have these systems and processes, then they’ll make it up themselves. A lack of systems and processes all result in low productivity, confusion, mistakes, errors, and generally low levels of workplace happiness.
Click below to download a free flowchart maker to help with your systems and processes:
As mentioned in an earlier article, many business owners spend more time than they should on tasks that will have little or no impact on growing their business.
In business, there are often only a few core tasks that will help drive growth. If you’re not focused on those tasks, you can end up been busy all day every day running around putting out fires and solving small issues.
As business owners, there are an endless array of distractions that can suck time from us. Controlling how we use our time is really important.
Business owners often like to engage themselves in tasks that are emotionally safe. These are frequent tasks that we are very familiar with or enjoy doing. Now there’s nothing wrong with doing things that you enjoy doing, but often the significant gains are made from doing things outside our comfort zone or tasks that are going to have a considerable impact to your business’s growth.
To outline this concept further, below is a table that illustrates the above example.
If you would like to improve how you use your time, follow this easy exercise.
Before you start:
Download the free Time Analysis Exercise.
Click below to download your free Time Analysis Exercise:
Record the tasks that you are completing every 15 minutes.
For an 8-hour day, this will require you to fill in 32 slots, where you record what you have done.
This needs to be continued over one week.
In total, you should have 160 x 15-minute slots where you have recorded the tasks you were working on.
Break your tasks up into three sections.
Step 3 (Complete step 3 at the end f each day):
Score each tasks using the key below:
Use the dropdown menu to add a score next to each of the 160 x 15-minute slots.
Once you have done that, you can now analyze how you use your time.
The template will automatically calculate your total score.
Check your results:
On completion of this, you’ll now have a much better understanding of how you use your time throughout the week, and how you can better use your time to grow and develop your company.
Many business owners and especially those that have started businesses from scratch, often have ideas that nobody can do the job as well as they can.
This is entirely not true and is a limiting belief. Often this belief becomes apparent when business owners micromanage their employees.
The role of the business owner is to think, plan and develop the company; it’s not to get involved and every minute aspect of the business.
As discussed earlier there are three types of tasks 1 Low Value, 2 Essential and 3 Growth.
All low level and essential tasks should ideally be done by employees or outsourced.
This gives you the best opportunity to work on high-value tasks that are going to have the greatest impact on your business.
Another issue that some business owners have is they like to do everything themselves.
If there are tasks that need to be actioned in the business, which require specific skill sets, rather than trying to break your head on it yourself, why not get someone in who is an expert in that area and has done it 100 times before.
Many times, I’ve seen business owners work on projects that have taken up months of their time when they could have gotten someone else to do the job and had it completed within a week, and with a much better result.
In business, speed is the key!
As discussed previously, the role of the business owner is to think, grow and develop the company. To do this, you need time to think and plan.
Whenever a new task comes into the business, the first question you need to ask yourself is ” who is going to do this task.”
I support the approach of bottom-up delegation. This means that all tasks and duties within the business are given to the lowest level of employees within the business. They do what they can within their responsibility level, from there anything they can’t do is pushed up to the person above them.
This means by the time tasks come across the owner’s desk, they are of the highest importance and value.
To make this easier, it begins with recruiting right, great employee inductions, and continuous staff training. This should be supported by KPI’s for each role.
Business owners sometimes fail to seek advice from those who will be honest with them. This is understandable as some entrepreneurs link their identity to the business, and by default critiquing their business is the same thing as criticizing them personally.
In order to grow, business owners must seek the truth; they must be open and honest about the business and themselves.
Becoming comfortable and surrounding yourself with people that will agree with you is the road to mediocrity. Business owners need to be continually challenging their ideas, thoughts, and assumptions.
Often, it’s front line staff and employees who have some of the best insight to give, but in order to give higherups advice, you usually have to ask them. Create an environment that promotes constant feedback in an honest and authentic way. Ensure employees at all levels can provide input that will help develop your company.
Developing a business is hard work. But by recognizing some of the five deadly sins of business, you can improve your company and avoid issues before they arise.
Business is about driving results. Park the ego at the door. Focus on what the goal is.
What are some mistakes you’ve made in business? Comment below.
The team at Strategy State have compiled a list of the Best Free Tools for Entrepreneurs.
We understand that growing a business can be tough at the best of times and managing cash flow is always a challenge.
That’s why we have compiled a list of free tools to help you keep growing. We’ve tried to find tools that are 100% free.
Read through the list, we hope you find some useful tools that you can use.
We’ve broken them up into sections for easier navigation.
The team at Strategy State have a great set of free business tools to help grow and develop your company. These tools cover business planning, marketing strategy, 100-day plans, KPI’s and much more.
These tools will help you manage projects more effectively while working across teams. They’re great for keeping everyone on the same page.
Tools to help you manage your time more effectively. Some of these tools block specific website for defined periods of time.
If you’re like most people and have dozens of different accounts across different platforms, then keeping track of usernames and passwords can be a challenge. These tools can help with that.
Tools to help you communicate via video. Enabling you to work with people out in the field and from around the world.
These networking sites are great for meeting like-minded people.
You can find your target audience, create events or your own club to help support your endeavors.
Having a Client Relationship Management system is essential for all modern-day business.
Here is a list of some free CRM’s to get you started.
These tools are great for collecting feedback from customers, testing and validating new ideas for products and services.
Email marketing is the backbone for many small businesses.
It also boasts one of the highest ROI’s of any marketing initiative. Use these tools to maximize your email marketing.
Google is always coming out with new products. Most of them are free, it’s just that many people don’t know about them.
Review what products google offers and see what is useful to your business.
Here are a few platforms to help you build a free website, landing page or blog.
The free tools listed below will help you generate leads and convert more sales on your website.
Every website needs to be regularly audited to keep it healthy and up to date.
These tools will help you analyze your website and provide recommendations to help optimize it.
Ensuring your website speed is as fast as possible is vital to reducing your bounce rate.
Use these tools to test your website speed, then find out what needs to happen to improve it.
Here is a list of tools to help you with your Search Engine Optimization, including keyword research, competitor analysis, and many other useful tools.
The File Transfer Protocol (FTP) is used to transfer files between two computers over a network and Internet.
Code editor tools will help you edit text and source code easily. These tools support plain text and several programming languages.
Below are tools that help with your content creation. These tools analyze your content for plagiarism along with other quality measures.
Analyzing your competitors and gaining market insight is vital to remaining competitive.
Use these free tools to help you improve your performance and stay ahead of the pack.
Below are tools that will help you with your Search Engine Marketing and PPC Ad management.
Here are the leading social media channels.
Target your relevant audience using the channels what work best for you.
Forums can be a great way to interact with your target market.
The below forums receive thousands of visitors each month.
These tools will help you manage and track your social media more efficiently and extract as much value from your social initiatives as possible.
Before you spend your hard-earned money on stock images, check to see if there is something you can use that is royalty free.
These free sites offer thousands of royalty free images you can use.
If you require photo editing tools, here are a few free options to get you started.
Every marketer and business owner needs music for their promotional videos.
Try these free options before you open your wallet.
Here is a list of some free file sharing and storage platforms.
Maintaining computers free of malware and virus is important for all business owners.
These free tools will help you protect your computers and allow for a safer browsing experience.
These tools will allow you to obtain free business cards, and provide an improved printing experience.
Convert your PDF files into word files with these free converters.
Below are some useful tools to help you build and design infographics for your business.
If you need to edit video, then these free tools are a great place to start.
Some of the tools are basic and easy to use, while others like Davinci Resolve is incredibly advanced.
If you found this article useful, sign up to our blog list for more awesome content.
What free tools do you think we should add to the list? Let us know?
The web moves at a tremendous pace if any of the above links have stopped working or are no longer free tools. Please contact us at [email protected] and let us know.
For many business owners and entrepreneurs, the challenge of growth is a big one.
Most business owners struggle with the actual tactics of how to grow business. But for those who have identified how they need to grow and develop, there never seems to be enough time or resources to make these things happen.
At the end of the day, you are measured by your results and what you actually do, rather than what you could do.
This is something that plagues many business owners as they strive to grow their business.
William S. Burroughs is credited with the quote, “When you stop growing, you start dying.”
But I hear you say…… I don’t have time for any of that!
In my business, I’m the butcher the baker and the candlestick maker.
As it turns out, we’re all busy and it just so happens that everyone has the same number of hours each day.
So why is it that some people achieve more each day than others?
Well in simple terms it comes down to focus and priorities. But that’s not really the issue; the issue is What you focus on and What you prioritize.
In business, if you don’t focus on the core activities that are going to drive growth, you can end up being busy being busy. We all know the saying “if you don’t control your day your day will control you.”
An example of this could be a business owner who runs around all day putting out fires within their business, i.e., he/she runs around correcting staff, yelling at people and making a general nuisance of themselves. Obviously, all of these things could be avoided if they had better recruitment policies, induction processes, training programs, staff monitoring, and KPI’s in place.
What I’ve found over the years working with clients is that they tend to focus on tasks that fall under the category of “emotionally safe.” These tasks tend to be activities that they have a high level of skill of experience in, enjoy doing or activities that offer low emotional vulnerability. The end result is that they tend to work long hours and generate little or no value for the entire day.
An example of this could be a business operator that has a technical background and spends his time “playing” with the technical aspects rather than making sales and chasing up new work.
As discussed earlier a lot of business owners, and in particular small business owners view all tasks as essential. This is because if they don’t do it, then no one else will. Thus everything becomes essential.
That’s not a problem per se, but one needs to understand the difference between Essential Tasks and Growth Tasks.
All essential tasks need to be done in order to keep the business running. However, growth tasks do not, and this is the reason why they happen to fall by the wayside.
The following chart below shows the difference between the three levels of tasks. One being tasks that somewhat helps the business, the next are essential tasks that need to be completed in order to keep a business running. The last is growth tasks that actually help grow and develop a company.
To grow any business, you have to really think about how you use your time.
Think about it this way, how do I produce a 10,000% return on my time?
What tasks can I do that continually produce value over time, i.e., the completed task has a reoccurring or residual value.
This graph shows the difference in growth between a company can experience when engaging in Essential tasks vs. Growth tasks.
One of the biggest lessons small business owners can take from corporates like venture capital and private equity firms is, they focus on the things that drive sales and growth.
There are a number of ways they do this, and it really depends on the business and the industry. But to keep things simple, they create KPI’s (Key Performance Indicators) and track and measure the MOST IMPORTANT tasks that will produce success.
All small and medium businesses can apply this growth principle. Find out what drives your industry, then apply some matrices to those tasks.
The 1% growth principle is just that. Strive to grow your business by 1% each and every day.
Let’s put some numbers behind the 1% growth rule.
Let’s assume you can grow your business by 1% each day (you can look at this on a weekly, monthly or quarterly basis) which I might add isn’t very hard if you haven’t maximized all your potential growth channels.
On a 5-day working week, working 48-weeks per year, it’s possible to grow your business by 240% for the year.
Now some of you might be thinking that this example is not realistic, so let’s look at it from a more conservative approach.
What if you grew your business by 2% each week, on a 48-week working year, this would mean that your business would grow by 96% for the year.
Now, this is not entirely accurate because there would be a compounding effect that would take place.
An example as follows:
So, let’s say in January you revamped your website and added a few freebies (free downloads) for people to download. The goal of this was to collect email addresses.
Midway through January, you built an email sales funnel.
Now comes along February and you decided to give free initial consultations.
You also started using some software that cut down your administration time by 1 hour each day.
Now the obvious growth from this example is that your website has been improved, you’ve created a freebie, and now you’re collecting email addresses.
You’ve set up a CRM system and a sales funnel to engage with prospects.
You’re offering a free initial consultation, and you’ve increased your productivity by 12.5% each day. These are the obvious gains that you’ve made.
But it’s important to note that there’s been a compounding effect that is starting to take effect.
Because you have improved your website and are now offering freebies, your database of prospects has increased and continued to grow each month.
Because of that, you are now able to offer free consultations which has intern increased your conversion rate.
Additionally, because you have an extra hour each day, this gives you time to chase more sales.
With all things being equal this should continue throughout the rest of the year.
One tactic that can be used to garnish growth is to create a growth time each day. By creating space for growth, you’re giving yourself the best chance to engage in activities that are going to drive your business forward.
Set some time for growth each day/week, make it a priority, stick to it. Be disciplined.
When reflecting on what you have achieved each day or week.
Only count activities that are growth related. Never consider essential tasks as achievements for the day.
Identify and set up KPI’s that will drive success. This will create discipline and focus you on tasks that drive growth.
If you don’t achieve the KPI, ask yourself “how” or “what” needs to happen in order to achieve it.
One of the best ways to grow your business is to delegate, outsource, automate or eliminate tasks that are minimum wage or low value.
Many small business owners spend a disproportionate amount of their time on tasks that don’t directly drive value.
Again, these tasks are important, and they need to be done, but they add little in the way of value generation and prevent businesses from achieving growth.
If there are growth tasks that need to happen, and you don’t have the skills or expertise to do them, then outsource them to someone who can help you. The important thing is that they get done.
If you are committed to growing your business, the first step should be an in-depth business analysis to better understand your business’ potential.
Strategy States business evaluation tool is a great place to start. It provides the most comprehensive analysis of your business and creates a roadmap for growth.
Evaluating your business, auditing it, giving it a health check, popping the bonnet under the hood of your business, whatever you want to call it. All businesses need to be analyzed and evaluated on a regular basis to ensure that they remain healthy, competitive, and heading in the direction that the owners intend.
Evaluating your business has often been a task that is overlooked by business owners as most of their time is spent working in the business and managing the daily tasks.
Not much has been written on the subject of business evaluations and the importance of business owners stepping back periodically and taking a good look at their business from the outside.
Below are the top seven reasons why evaluating your business is vital with business changing at such a rapid rate.
On average, over 60% of businesses are profitable before they go into receivership or bankruptcy. This means that some of these businesses are “good businesses,” but still manage to fail.
Most businesses that go under, don’t go under because of some catastrophic event, but because there have been many tasks that they have, or have not been doing over an extended period of time.
By completing an evaluation and taking the time to step back and have a look at your business, you can often identify problems and issues before they get out of control.
The old saying of “you can’t manage what you don’t measure” rings true. If you don’t evaluate your business, it can be hard to put the finger on what the issues are.
As the saying goes, you can’t proof your own work. It’s very hard for people to objectively look at their business and fairly recognize the holes and mistakes that they might have and inadequacy within the business. This is especially true if you have been involved in the industry or business for a very long time.
This is the main reason why people get business advisors and business coaches involved. They want someone from the outside to help them with their business that’s coming at it from a different angle.
As a business advisor, you come across many interesting people. I had a discussion with a guy one day, and I asked him a question, “How do you quote on your jobs?”
He proceeded to explain in great detail how he priced his jobs. To my amazement, he had been misquoting his work for the last 25 years. Now, I don’t mean he quoted differently, I mean incorrectly!
He was under-pricing his work substantially in relation to industry averages. He didn’t know what his competitors were charging; he was in a race to the bottom all by himself.This practice over a period of 25 years had him losing money (leaving money on the table) on every job.
Now, if we take a figure of $15,000 per year (loss), and we span that out over 25 years, we could say that this person lost $375,000 in revenue.
For a solo operator, that’s a chunk of change.
The lesson here is having a deep understanding of your industry, and make sure you know everything there is to know about it.
A solid evaluation should cover the following areas (see list below).
Examining these key areas will ensure the greatest chance of success and reduce your business risk.
Leadership & Wellbeing
Accounting & Finance
Most small businesses don’t have an endless supply of funds, time, and resources to achieve their goals.
This brings me to my next point of identifying and focusing on the key tasks that are going to drive your business forward. But in order to get to that point, you first have to understand your business; what’s going on and what are the things that are going to generate the greatest impact.
One lesson SME’s can learn from private equity and venture capital firms is; when working for a company, they identify what the industry’s 3-5 must-wins are.
They focus on the key things that drive a business forward. What this does is that it creates a laser-like focus on the activities that are going to produce the greatest results for the least amount of resources possible, thus maximizing their return.
What solo, small, and medium businesses can take from this is that once you have evaluated your business and you’ve identified your must-wins, you can then allocate the required resources to achieve those tasks and disregard other tasks that have little or no value.
Below is an example of a chart that shows the different pain points within the business. You can see which initiatives are the most important based on Impact and Priority.
In terms of business planning and strategy, as discussed earlier, businesses have limited resources for achieving initiatives.
Evaluating your business and identifying the areas that you need to work on helps with the business planning process. It enables business owners to focus on tasks that need to be completed over three months, six months, and 12-month periods.
This type of planning enables team members to concentrate on tasks that are going to have a direct impact on the profitability and competitiveness of the company.
Typically, after an evaluation has been completed, business owners can break tasks up into:
This can also be supplemented with monthly reporting and adjusting your KPI’s accordingly.
We should all strive to buy a high learning curve position; i.e., we want to gain the greatest amount of information in the shortest time possible so that we can make better-informed decisions.
This also applies when utilizing the resources of a business advisor. Business advisors, like many other service providers, want to provide the highest value possible to their clients.
To do this, they need to have a deep understanding of your business. The more they know about your business, the better, and higher value information they can provide. There is nothing worse for an advisor to find out several months after the initial engagement that crucial pieces of information have been undiscovered.
Do yourself and your advisor a favor by giving your business a full evaluation before you engage in their services. Give your advisor a strong starting point. You want your business advisor to be thinking of ways to double or triple your business in the next 12 months.
You want them to be focusing on things, such as scaling your product, creating leverage, joint ventures, and alliances. Things that are really going to grow your sales. You don’t want them working on tasks that are not going to directly drive growth.
No matter what stage or size of your business, by conducting a business evaluation you will better identify opportunities to create growth and sustainability.
After identifying these growth initiatives, you’ll reduce mistakes and gain a better return on your time.
Business evaluations give owners a helicopter view of the business that allows them to analyze key areas of their business in one concise document.
Below is an example of the overview page from the Strategy States Business Evaluation:
Like to find out more about how you can evaluate your business and take things to the next level? Read more about the product.