Newsletter date August 2009—September 2009
Volume 1, Issue 1
Monumental Partners Limited
Special points of interest: Is Jamaican Consulting Industry in Danger?
Monumental Report Impact of CSME on Jamaican C onsultants
Business Development in a new environment
b y Ka h lil Ha r r is economy.
Caricom Building Jamaicans have only been allowed to vote on issues once in our entire history, rather than vote for a politician, and this was done before our independence in 1961 when the Honourable Norman Washington Manley allowed voters to decide on the issue of federation among the Caribbean Islands. History suggests we voted unanimously against federation and hence rejected the formation of a united front of the Caribbean to the world. Fast forward to present day where our current issue is the Single Market Economy SME or is it federation? At this juncture Jamaica is all for Caricom and the single market econ-
omy, while the other Caribbean Islands - especially the more economically viable Caribbean Islands - are not so enthused about being a part of a single economy with Jamaica at the forefront. How our fate has changed! An inauguration of SME poses an exceptional opportunity for Jamaica. With Jamaica being one of the largest Islands in the Caricom our labour force would receive a positive impact by providing a major workforce and thereby securing a massive growth in our economy and thus lowering our unemployment levels. As the laws are changing to facilitate free movement of labour, access is opening up to markets that are more than twice the size of the Jamaican
Has the meaning of Marketing Changed?
This means that the SME presents the same promise to the Jamaican consulting professional through a wider market in which to operate, however, it also poses a threat with the advent of more professionals moving into our markets because of the sheer size of our industries and their volume of business compared with the markets they are coming from.
Business Strategies Finding Financing for your Business
SME OPPORTUNITIES It is without question that growth of the profession of consultants or for any profession in the Caribbean will increase with the Single Market Economy of Caricom. Jamaican’s have always set their sights on United States of America and while not by any means a substandard goal, pressures of post 9 -11 laws which have been established and levied against all foreign professionals, forces us to establish our strength in a
Inside this issue: SME Opportunities
2
Business Development Anyone? 2 Accessing Funding
3
Why everyone is in business development
How to apply for a loan
3
Everyone who works on a project that could grow is in business development. Everyone who works on a project that will end but could be renewed is in business development. Everyone who interacts with the customer is in business development. Everyone who supports the customer is in business development. People who never see the client, but depend on their revenue are in business development. In short, everyone is in business development.
Myth of the Entrepreneur
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Myth of the Entrepreneur
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How to ….
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Marketing on a Tight Budget
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Adverts
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However, most people don't know it. And worse, even if they do, they don't know how to play their role in business development. Most people have a specialty, and most don't have business development in their titles. Most have education and experience in their specialty. Most don't have a clue about business development. If your business is to fulfil its potential, you've got to raise their business development skill levels. Notice that I did not say that you should turn everyone
into business developers. They have a specialty for a reason, and you need them to apply themselves to it. However, you also need them to understand how their role fits into the business development function, and how they can support it. This is most critical for those who interact with the customer. Most professional services businesses rely on their project staff for business development. Most project staff see business development as a barely necessary evil.
Monumental Report
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If your business is to fulfil its potential, you've got to raise their business development skill levels
Why is everyone in business development cont Business development is not something that they can figure out on their own and do consistently well. If you want them to consistently be able to support business development, you need to boost their skills. Boosting someone's skills involves more than just sending them to a training class. You need to have an ongoing outreach and skills development program. It can be as simple as monthly brown-bag teleconferences. But on a regular basis, you need to help them learn how to:
insight that you can turn into a winning proposal, even better. And if they can help the customer through the procurement process, you will have the inside track.
Identify an opportunity. What kind of problems can your business solve and how do you approach a customer about them? How can you develop business simply by helping your customer?
This doesn't happen after taking a single class. It is something that must be practiced and become part of your corporate culture. It will not happen simply because you want it to happen. You must constantly reinforce it and help it grow by developing everyone's
 
Qualify a potential business opportunity. What information is required to verify that an opportunity is real? What information should be collected to improve competitive advantage? Help the customer through the procurement process. What can you do to help the customer with their own procurement process? What options can you provide the customer? If all your staff do is identify business opportunities while helping their customers solve problems and can bring them to your attention, the battle is half-won. If they can also help gather customer and competitive
But it's not enough to tell them that this is the goal. You have to help them understand how it is a natural extension of what they are already doing. It must go from something else that they have to do, to something that is part of their normal routine --- not another job to do, but a natural part of doing the job they already have.
business development skills. If you do nothing, you will get exactly that in return. If you get the message out once a year, you will get an equivalent return on investment. If you get the message out frequently, and back it up with the knowledge to help them understand clearly both the expectation and what to do about it, you will see your return on investment grow. Only when everyone who interacts with the customer plays an effective role in business development will you maximize your company's growth potential
Impact of CSME on Jamaica (cont front page)
They perceive Jamaica to be an untapped market with immense possibilities (as shown with the Lascellses DeMercado takeover by Angostura , Life of Jamaica by Sagicor) which is not fully being taken advantage of‌.
market more accessible us. This Jamaica by Sagicor) which is would give us a play not fully being taken advantage of because of the vioground to test our boundaries lence being reported. It is only and master our profession before a matter of time before our counterparts manoeuvre themthe SME comes rushing in. selves and discern the areas to avoid as our fellow JamaiThe Jamaican professional is in a cans do, and as with all hutight position, as our focus has mans they will adapt to our traditionally been more on United society and become a major States than it has been on Trini- force in our consulting sector. dad and Barbados. We are far more likely to have studied, visited friends and relatives and THE SOLUTION done major business in North America., We have always seen The first change the profesour Caribbean neighbours as a sional needs to make is to vacation getaway and few of us establish that he is a Global aspire to be successful in terms consultant, and not just Jamaiof Barbadian or Trinidadian dol- can (or even 'Jamerican'.) This lars. We take pride in our alliance reconditioning or change in with the United States, and shun mindset is all-important for us the fact that we are essentially in order to establish who we are as professionals, what our part of the Caribbean. market is and where future However, our Caribbean col- resources are to come from. leagues and association of profession our competitors shares a separate view on the Caribbean, They perceive Jamaica to be an untapped market with immense possibilities (as shown with the Lascellses DeMercado takeover by Angostura , Life of
The second change is to define an area of professional expertise, one in which it would be enjoyable and challenging to research information and develop deep proficiencies. A genuine interest is one
that speaks to the heart, versus the mind, and comes from authentic commitment, versus logical theorising. If the interest is natural and heartfelt, then expertise in that area will inevitably flow and become real. The third and final change is to create a professional brand related to the area of interest, and establish oneself as an expert in that area. Once a distinctive personal style or brand has been created, it can then be broadcast across the region by finding others who share an interest in that same area. Given the distance between our territories and the high cost of travel, technology can be used to create the necessary connections. New technologies such as VOIP 1 can be used to cut communication costs dramatically. Websites, e-Newsletters and e-Trade Periodicals can be used as ways to let people know what the consultant is offering; newsgroups, blogs and instant messaging can be used to create different modes for communicating the consultant's message, style and brand to executives and their employees across the region. Our ultimate goal as Caribbean Professionals should be towards honing our skills and branding our expertise and not just bracing for a change.
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Volume 1, Issue 1
Monumental Report
Monumental Report Staff
Accessing funding for your B usiness This 5 step guide to business funding should help you effectively achieve the funding you need: 1) Decide the right type of finance for your business needs 2) Find out what funding is available 3) Make the application 4) Getting your application in 5) Keeping in contact. Don't forget you can get advice from your local business link at JBDC or private council at JNBS or in some cases your local council. It's always worth getting in touch with these resources that may well be able to help. Instructions Step1 The type of funding you look for depends on what you want to use it for. If you have a particular project in mind with defined objectives, then a grant may well be the better option. Loans are generally most suitable for paying for assets, like vehicles and computers, for start-up capital and for other cases where the amount of money you need is not going to change. It is not a good idea to take out a loan for ongoing expenses. Step2 Now that you have established what funding is needed and where your business is headed, the first port of call should be researching grants which you might be able to facilitate depending on your type of business. These are usually done through government organization or nonprofit organisations setup by the European Block or USA. Jamaica Trade and Invest formally JAMPRO, is one such company with a wealth of information on government grants and they might be able to work on with you to perfect your plan. Step3 General tips: It is highly unlikely that funding will be available retrospectively. Remember your application will require anywhere from a few hours to several days or even weeks for the bigger schemes so be sure that you can commit enough time to the application and that it's worth this investment. Don't try a one-size-fits-all approach. Each application will need to be tailored to the objectives of the particular grant scheme, focusing on any aspects of your project that will fulfil the criteria. Don't pin all your hopes on getting the grant, as the application processes are usually competitive.
Make sure you can actually deliver results, as the grant can be withdrawn if you don't achieve the agreed targets. Don't overstretch your business. More ventures fail through lack of cash flow than any other cause. Step4 Prepare a good business plan Business planning is an essential component of any successful business and whether you are intending to apply for a grant or a loan you will probably need to include one with your application. Preparing a plan is not as difficult as it may sound - it is putting your ideas down on paper in a logical way. Areas that are usually covered: Description of the business - brief overview of purpose of business and the project. Evidence of demand for product/ service - size and location of market, buying patterns, type of research carried out. Sales and Marketing - how you will promote your product/service, your sales targets, and how you will beat the competition. Product/Service - description and its advantages (and disadvantages). An analysis of strengths, weaknesses and the external environment. (S.W.O.T.) Management - CV's, training needed, what the managers are bringing to the business. Financial forecasts - budget and cash flow forecast. Key staff and personnel involved. Your plan should contain the essential information required. Tailor it to the needs of whoever is going to read it. Remember, when you are making predictions about your company’s growth it's best to be prudent - don't be overly optimistic! Very often you can obtain help with preparing a business plan from your local enterprise agency or JBDC. Other places to look include: Local libraries Business services of banks Step5 Make contact
Once you've found a suitable funding programme(s), it may be a good idea to get in touch with the named contact, usually the Grants/Funding Officer. They will have an in-depth knowledge of the scheme and can give a clear indication of what they look for in a successful application. Plan ahead Applying for funding will probably take longer than you imagine. Some statutory grants and other schemes happen once a year and you may need to start planning 18 months in advance, so it is very important to think ahead. Be realistic It may be better to grow slowly and develop in the direction you want rather than go all out for any money that’s around and find yourself having to cope with multiple repayment schemes or deadlines to juggle. Make that deadline It's very important to ensure that you get your application in on time. Most funders will not accept late applications. Make sure that you attach all the important paperwork.
Step6 Keep records Keep a note of which funding bodies you've approached, when you approached them, and what the result was. Then you'll know who to go back to, and when. And you won't lose all the precious information about funders that you've painstakingly built up if the person responsible for the funding bids leaves your organisation. Build up a rapport If you do get help from someone, thank them. Send them your annual report or press cutting, tell them what you've achieved with the money, invite them to come and see what you do. You're trying to build up a relationship with funders so anything you do to increase communication is important.
Creative Director Kahlil Harris Editor in Chief Tanya Sue Brice Business Development Consultant/Contributing Writer Christopher Goulbourne Marketing Consultant/ Contributing Writer Terry McNeil Accounting Consultant Wayne Parcells
Don't pin all your hopes on getting the grant, as the application processes are usually competitive. Make that deadline It's very important to ensure that you get your application in on time. Most funders will not accept late applications. Make sure that you attach all the important paperwork.
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Monumental Report
Michael Gerber Unravels the Myth of the Entrepreneur
Michael E. Gerber is an entrepreneur, small business guru, and the bestselling author of five books, including his latest, E-Myth Mastery. He is the founder and chairman of E-Myth Worldwide, which is dedicated to
. MCNews asked Gerber to explain the myth of the entrepreneur and tells us what a consultant can do to create a thriving practice. MCNews: What is the E-Myth point of view? Gerber: The E-Myth view is that people who go into business for themselves are not the entrepreneurs we think they are. Rather, they are what I call technicians suffering from entrepreneurial seizures.
The consultant creates a consultancy, the accountant sets up an accountancy, and the attorney starts a legal firm. They all Would-be entrepreget to work doing what they know how neurs believe in what I call to do. Would-be entrepreneurs believe in the fatal assumption: that what I call the fatal assumption: that knowing how to do the tech- knowing how to do the technical work nical work means you know means you know how to build a busihow to build a business. ness. But it doesn’t work because they spend their time working in the business rather doing what entrepreneurs do, which is to work on the business. They fail to see the business as a product as an entrepreneur would. Instead, they see the business as a job. Obviously, it’s Monumental Partners a job they were trained to do and, no Limited doubt, are passionate about. But, unfortunately, there are many other functions a business owner has to master, and they Phone: 876-944-1881 just don’t do those well.
E-mail: info@monumentalpartners.com
MCNews: What makes people believe they can translate a technical skill into a business if they don’t know how to run a business?
Gerber: The disconnect comes from the fact that we all work for somebody who doesn’t know how to run a business. You’re working for an idiot and think, ―I could do this at least as well as that idiot can. Any dummy can run a business— The worst thing is to be successful at doing something I’m working for one.‖ If you’re working for a guy that doesn’t you don’t really want to do. know what he is doing, you figure, why don’t I do it on my own and take home more of the money? MCNews: So people delude themselves that their technical skills will carry through? Gerber: Of course. Everybody says— come on, how hard could it be? In reality the number of businesses that fail is very high. Depending on who you’re talking to, it can run anywhere from 60% to 100%. Effectively, most do fail. If they don’t fail outright, most businesses fail to fully achieve their potential. That’s because the person who owns the business doesn’t truly know how to build a company that works without him or her—which is the key.
MCNews: Don’t most people want to start their own business so they can get some degree of freedom from the constraints of working for someone else? Gerber: Right. They want to be their own boss and make their own choices and decisions. That’s admirable, and it seems like it would liberate you to do what you love without the interference of a boss. Unfortunately, it often makes your situation worse. You have that enormously positive expectation that you’ll be free, and then you realize that you are in a worse prison than before because it’s one of your own making. That sounds terribly tragic and depressing, and it’s all of that and more. Once you are free of the boss and become self-employed, you’re caught in this vicious cycle—can’t get out of it, can’t get out of it. Now I’m doing what I believed I would love to do and I’m more consumed than ever, and doing many more jobs than I did in the past. MCNews: Is there a defining ability or characteristic that contributes to somebody becoming a successful entrepreneur? Gerber: Well, that’s a big question. In fact it’s the one I write about in all of my books. The underlying theme is that three personalities reside inside of every person (and, by extension, in every company): the entrepreneur, the manager, and the technician. The entrepreneur works at the enterprise level, the manager at the business level, and the technician at the practice level. Most of us have an imbalance of the three personalities, and the technician is dominant. But the manager is probably at least as unrealized as the entrepreneur. The domination of the technician keeps most small businesses from growing. The technician is limited by time and knowledge. There are only so many billable hours in the day, so the only way the technician can expand the business is by increasing the amount he’s paid per hour. So $100 an hour has to become $200, then $300, and $500. That’s the tyranny of the expert: you have to get a higher and higher rate because there’s no
more time. Ultimately, you reach a ceiling and can’t go any further. That’s the ceiling of the technician. Whether you are a consultant, an attorney, or a doctor, if you are only a technician, your practice is limited by what you are able to do in the amount of time you have and by how much you can be compensated for that. You can always add helpers, for example, an administrative support person. But if you add people, they eat up revenue that you would otherwise get. There’s enormous resistance to do that. You’ll think, ―I won’t get somebody else to do that. I’ll do it myself because what I’d be paying them would come out of my end.‖ MCNews: It’s a real trap. Gerber: Absolutely. On the other hand, the true entrepreneur knows that work on the business is absolutely essential. You have to work on your consulting practice while you’re working in it to build a turnkey practice that can be replicated. The minute you’re able to do that, you begin to create a business. Then you’re at the level of the manager, and you need to build a management system for the network of practices that you’re going to grow. Those practices are replicable because, with a turnkey system, people with significantly less skill than you can perform as well as you at the fundamental things at the core of your business—the products or services you deliver. The business becomes nothing more than eight, ten, or twelve practices. You can now replicate the business, and that’s an enterprise. That’s how you make it grow. The E-Myth lays out the logical steps you need to take to do that. MCNews: You’ve said there are business plans you can write and then there are business plans that work. What is it about a business plan that makes it effective? Gerber: The essence of a business plan that always works is that it’s not first and primarily about creating a business. Instead, it’s about what you want. The question you have to ask yourself is, ―What do I want?‖ If that’s not driving it, then it becomes an empty process. What do I want? That stops me from externalizing the process and making it an exercise in creating objectives. Internalize this and make it a truly personal question. Because if what I end up doing isn’t who I want to be, and if I don’t really address that question deeply, personally, and honestly, then it’s going to be a dead thing and it’s going to kill me along the way. .
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Volume 1, Issue 1
Monumental Report
Michael Gerber Unravels the Myth of the Entrepreneur The worst thing is to be successful at doing something you don’t really want to do. MCNews: So this is about how you want to design your life? Gerber: Absolutely. And whatever the business is, it’s going to reflect that. It’s going to become an odyssey through which you experience your authenticity—or not. What would you answer if somebody asked what is your primary aim? People ask me that because I write about primary aim as the first of seven steps. For a long time, I kept saying, I don’t know. Then, I finally realized my primary aim is not to lie. Somebody asked, ―Why isn’t it to tell the truth?‖ And it’s because I don’t know whether I’m telling the truth or not, but I absolutely know when I’m lying. MCNews: That’s an interesting distinction. Gerber: Well, it is. And I didn’t recognize the distinction until I went through that process. Every pore in my body knows when I’m lying. But it doesn’t know when I’m telling the truth because I don’t know what the truth is. The truth evolves and reveals itself over time. When you say the truth, it’s a relative, limited truth. In my mind, the truth is in quotes: ―The Truth.‖ There is absolutely the truth. I believe that. But I don’t know what it is and I’ll never know. MCNews: You’ve said before that marketing is a relatively easy activity but it’s also a very demanding one. Could talk about what you mean by that and how you look at marketing? Gerber: My favourite business book of all time is Marketing for Business Growth by Theodore Levitt, which may be out of print. If it’s available, your readers should get it. It’s an old book, but a profound one for me. Levitt defines marketing. He says it is not a function in a company; it is the entire being of a company. Marketing is what entrepreneurs are doing when they’re inventing a company. You invent a company that operates in a highly differentiated way and is preferentially unique to the person you’re creating the company for. And that whole thing is marketing. The essence of marketing is to tell a story—a story that touches the person who is to become your customer in a way that moves him or her to act. So figuring out what the story is drives the marketing process for designing a business that works. In my mind, I created the Michael Gerber School of Small Business Design. The person who graduates from that school receives an MBD—a Master’s of Business Design— as opposed to an MBA. When you think about this Master’s of Business Design and look at any company, you can fill in the blanks for the curriculum you would need to design that business. That’s what marketing is. MCNews: If you could give an entrepreneur one piece of advice—and I’m using the term entrepreneur in the way you’ve defined it—what would it be? Gerber: It would be go into the dreaming room continuously, passionately, with conviction, and not to be in a rush to know. The dreaming room is the place where not knowing happens.
Our problem is we want to get to knowing too fast, and that knowledge almost always comes from the past. We live in the past with what we’ve learned, and that becomes our limited arsenal for shaping our future, which is unknown. You don’t go to the dreaming room to discover how; you go to learn about the form and shape of what. And you need to take that slowly. Because to the degree you jump into how, you’re immediately reverting to the past. MCNews: Because all you have at that point is what you know? Gerber: Exactly. And you want to get there because that’s a comfortable place. That’s where the technician lives— What do I know? That’s my comfort zone. That’s the opposite of the visionary side of the entrepreneur. The visionary side is where the action is, where the juice is, where the love, openness, stimulation, and excitement really are. But you’ve got to stay with it for a while; you’ve got to give it room. Because how is just work. That’s why oftentimes an entrepreneur will start a company, grow it, and then get tired of it. It’s all just how: maintenance, operations, doing. And that’s not where the fun is. That’s where the fun is for managers, not entrepreneurs. MCNews: Anything interesting on your reading list? Gerber: I don’t read business books. I read writers. I’ve just finished most of Charles Bukowski’s books. He was a Beat era poet and novelist. And I’ve just gone through almost all of Elmore Leonard’s books. It’s astonishing how extraordinary a sentence can be. I read what moves me and I love language. When I find an author whose work gets to me, I’ll go out and buy all of that author’s books and immerse myself in them for six, eight, or twelve weeks. I’m also reading Seeds of Consciousness, which is the collected wisdom of Sri Nisargadatta Maharaj. The most powerful book I’ve ever read is I Am That, also from the teachings of Nisargadatta Maharaj. It’s an absolutely stunning book that blows people’s minds. MCNews: I really appreciate your time today. You can learn more about Michael Gerber, his books, and services at www.emythmastery.com and www.e-myth.com
Book Suggestions by Michael Gerber
Marketing for Business Growth— Theodore Levitt Seeds of Consciousness –Sri Nasargadatta Mahariaj I am That—Sri Nisargadatta Maharaj E-Myth Mastery E-Myth Contractor—Michael Gerber
Monumental Partners Phone: 876-944-1881 E-mail: info@monumentalpartners.com
How to Start a Business Without a Business Plan A business plan provides a set of documents that enables someone else to evaluate your business. But do you really need that? If you are seeking a loan or investment you might. But even if you need a loan, most small businesses are started on loans that the founder obtains based on their own assets or credit and not on their business plan. Most investments are made by people who determine that your business meets their profile (size, industry, scalability, maturity, etc.). They don't want to read a business plan and research you to find out if you meet that profile. They want you to tell them the things that matter to them, and nothing else. So listen to them and respond accordingly. If you don't need a loan or investment, and can get into business by yourself, you probably don't need to write about it first. Business plan advocates say that there is value in the process of writing a business plan, even if you never show it to anyone else. This may be true, but it's a lot of effort to go through when what
you really need are the answers to a couple of key questions. Whether you write the answers down or carry them in your head isn't terribly important. But it is critically important that you think them through before you find yourself in the middle of things. Key Questions
with you. But first you have to find them. To discover new customers, a gas station may rely solely on people seeing its sign and pulling in. But you're probably going to have to be more creative. You need something other than a sign on a busy street to get introduced to new customers. In fact, most gas stations don't rely exclusively on their sign and street presence to find new 1. Where are you going to find customers. If you are going to have a brochure, how your customers? will it make its way into the hands of potential customers? Direct mail? Hand delivery? 2. Why will your customers Trade shows? If you are going to have a want to do business with you? web site, how are people going to find it? If 3. What are your terms you are going to get introduced through (pricing, contracting, etc.) for personal networking, how many people do doing business with your custom- you know and how many more can you ers? meet? Two things will determine the numHow will you manage your cash ber of customers you end up with: the total flow? number of introductions (brochures distribIn that order. uted, people you meet, people who visit Where Are You Going To Find your web site, etc.), and the percentage that Your Customers? convert to becoming actual customers. Your success or failure in a busi- Being "in business" or being capable of ness will primarily depend on doing something won't make these introducyour ability to find new customtions and conversions happen. Talented and ers. The hardest part is identifying capable people fail at businesses all the time a potential customer. Once you've because they simply didn't land enough got them, you can interact with customers. Knowing how you are going to them and learn what it will take to accomplish this should be your most imporconvince them to do business tant goal.
Business Development Consultants
Phone: 876-944-1881 E-mail: info@monumentalpartners.com
Why Will Your Customers Want To Do Business With You? Once you have identified a potential customer, you need to close the deal with them. That is when you need to know why they should want to do business with you. Whether you simply talk to them, hand them a brochure, send them a letter, or submit a proposal, you need to persuade them to do business with you. Your pitch, brochure, letter, or proposal should be designed to do that. Persuading a customer to do business with you is a combination of convincing them through rational logic, appealing to their less logical desires, and removing the barriers that might impede them doing business with you. This means you need to have good copy and answer their questions. Unanswered questions and fear are the biggest barriers in the customer's mind that you need to overcome. Before you launch your business, you should know how you are going to convince the people you meet (or give your brochure to, who visit your website, etc.) that they should do business with you. Ideally, you should test and refine your technique. What are your terms (pricing, contracting, etc.) for doing business with your customers? The real question here is "what is your business model?" or "how are you going to make money?" Before you ever talk to a customer, you need to know:
What are you going to offer? What are you going to charge for it? What discounts will you offer? What will be included with the sale? What will you charge extra for? When, where, and how will you allow returns?
What will the contractual terms be?
How will you manage the customer relationship? What kind of follow-on sales will you attempt? The amount that you charge your customers, multiplied by the number of them, will largely determine your total revenue. How Will You Manage Your Cash Flow? It is actually possible to have an abundance of profitable customers and go out of business because you did not manage your cash flow and ran short before you could collect. This usually happens when you have to spend money to produce your offering and deliver it to the customer. A surge of orders means a surge of expense prior to collecting. If you get paid through invoicing and have 30 day terms, then even if customers pay on time (don't count on it) you have at least a 30 day lag to cover (and it could be more depending on how long it takes you to produce and deliver your offering). If you get paid in cash at the time of the sale, the above may not apply to you, but you still need to manage your cash flow to ensure that it covers your expenses and you don't fall short. Knowing how you will manage your cash flow means that you have to estimate your revenues (see above) as well as your expenses. This in turn enables you to estimate your profits. This is a classic business plan exercise, and where the most guesswork takes place. None of your projections will match reality once you start. However, knowing what drives your revenues and expenses will help you avoid being successful but going out of business anyway. Conclusion If you can answer the questions above with confidence, and don't need to convince anyone to give you a loan or investment, you are ready to launch your business. The place where you need to put effort now is in testing and refining to improve the quality of your estimates, the performance of your business, and your own confidence before taking the risk.
The real question here is "what is your business model?" or "how are you going to make money?"
5 Key Questions in Marketing Business When you know the answers to these 5 key marketing questions, you can create effective web pages, sales letters and other sales generating communications. The answers to these 5 questions reveal how you can get your prospect's attention and motivate them to take the action you want. 1. WHO DO I WANT TO REACH? Describe detailed characteristics of your ideal prospect. Be very specific.
3. WHAT IS MY COMPETITIVE ADVANTAGE? Identify why prospects should do business with you instead of with a competitor selling a similar product or service. For example, do you provide faster results, easier procedures, personal attention or a better guarantee? If you cannot think of a reason - create one. Add something to your business you are not already doing. Your competitive advantage can be responsible for fifty percent or more of your sales. Make sure you have one - and don't lose it. Keep checking on your competition and make any changes necessary to keep your competitive advantage.
Once you clearly define the characteristics your ideal prospect you can develop a powerful sales message appealing directly to their unique interests and needs. Prospects are more likely to 4. HOW WILL I PROVE MY CLAIMS? respond when they feel you are talking directly to them about their individual needs. Don't expect prospects to believe what you say. Make sure you provide proof of any claim you make. 2. WHAT ACTION DO I WANT TO GENERATE? For example, collect and use testimonials from satisfied customers. Provide research data supporting your Decide in advance what action you are trying to claims. Get endorsements from experts your prosstimulate. Do you want to get inquiries for your pects are likely to recognize. product or service? Do you want to produce sales directly from your promotion? Or do you 5. HOW WILL I CREATE URGENCY? want to build a list of qualified prospects willing to receive frequent offers from you? Most prospects do not respond the first time they see your promotion. Instead, they delay making any reYou can develop an effective promotion in a sponse - then often forget about you. short time when you have a clear understanding of the action you are trying to generate.
5. HOW WILL I CREATE URGENCY? cont buyers by giving them a compelling reason to respond immediately. For example, give them a special price if they order now - or include a valuable bonus if they order by a specific deadline. Monumental TIP: Develop a series of 4 or 5 different special offers. Use them one at a time with an expiration deadline. When one offer expires, replace it with the next offer and a new deadline. Continuously recycle through the same series of offers. This enables you to create urgency using special offers without taking time to create new ones. You need to answer to these 5 key marketing questions before you can create a motivating web page, sales letter or other sales generating communication. The answers to these 5 questions will reveal how you can get your prospect's attention and stimulate them to take the action you want. /
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