5 Must-Haves For Any Business
Originally published on March 21, 2018 by The Montrose Daily Press
It is a good time to be in Montrose.
The real estate market is hot, our population is growing and new businesses are opening. Big brands are looking at our community, and there is exciting new development happening.
Times like these stir possibility in the hearts of the entrepreneurial. Times like these also create opportunity for established business owners. Whether you’ve been in business 20 years, or you are about to open your doors, understanding the basic components of business and ensuring you’re meeting the mark will lead you to success.
Where do you start? According to author Jack Kaufman, who wrote “The Personal MBA,” there are five components to every business:
1. Value-Creation: Discovering what people need, want or could be encouraged to want, then creating it.
2. Marketing: Attracting attention and building demand for what you’ve created.
3. Sales: Turning prospective customers into paying customers by completing a transaction.
4. Value-Delivery: Giving your customers what you’ve promised and ensuring they’re satisfied with the transaction.
5. Finance: Bringing in enough money to keep going and make your effort worthwhile.
Each of these components feed into the other and without one, the whole will crumble. How does your business or business idea measure up?
This is the fun part of business. What do you think you can best the best in the world at creating? What hole do you see in the market that you have the ability to fill? Better put, what “itch” do you have that you wish someone would “scratch?”
Many businesses have been formed by their founders “scratching their own itch” or creating something they wish existed in the market. This approach works because creating, marketing and selling something we personalize and understand is far better than doing those things for a product or service we’d never use or do not understand.
When times are tough, what is always the first thing to go in most businesses? Marketing. Eliminating marketing, or skipping it altogether is a costly mistake. That being said, marketing comes in many different shapes and forms. Traditional advertising methods are great and often relevant, but not the only way a business can present itself to the world.
However you do it, your business should be top of mind for the customers you’re trying to reach. How can you best speak the language of the people you’re trying to reach? Here’s where “scratching your own itch” will come in handy again: How would someone attract you to this product?
Seen as a dirty word in some circles, sales is very easily dropped from many business equations. Or at very least, extremely underplayed.
Traditional selling techniques may be on their way out, but like it or not, sales as a profession is as relevant as ever. If the sales follow-through falls short, all your work creating value and luring your potential customers through the door will be wasted.
Sales is based on the creation of an experience. How does the customer feel when they walk in your store, or land on your website? How are they treated, what are they offered? Do they feel delighted, special, and valued? Do you make it easy to say yes?
Or are they allowed to experience your business in a meandering sense that makes it very easy for them to slip out the front door as quietly as they arrived?
Did you do what you said you were going to? A beloved phrase in value-delivery is “under-promise and over-deliver.”
If you go into a situation expecting “Experience A” and you walk out with not only “Experience A,” but also the hot fudge, whip cream and cherry on top, are you more likely to return? When a business regularly meets and/or exceeds your expectations, do you find yourself more loyal to that business?
The step in the process is imperative! This is where a beautiful equation emerges: 80 percent of your sales come from 20 percent of your customers. In other words, you no longer work as hard getting people through the door with your brilliant marketing. Simply deliver consistency and greatness.
Keeping the lights on, paying your people, and having enough left over to give yourself a little salary. Books have been written on this topic and there are several industry experts out there willing to help.
Bottom line: price your goods or services correctly, manage your cash flow to keep things running smoothly, and plan for the future with a good budget strategy.
If you are facing issues in your business or thinking about opening a business, give yourself a quick grade in each of these areas. Chances are, you can rapidly identify the problem and go about fixing it without wasting another minute. And because none of us are perfect, by using this checkpoint method, we can always find something to improve upon.
“A business is a repeatable process that makes money. Everything else is a hobby.” — Paul Freet
Chelsea Rosty is the executive director of the Montrose Chamber of Commerce and director of Business Innovation for the City of Montrose. Contact her at firstname.lastname@example.org.