From idea to first sales. Tips for starting a business from successful entrepreneurs

From idea to first sales

Tips for starting a business from successful entrepreneurs

Alexander Semenov

© Alexander Semenov, 2023

ISBN 978-5-0053-5097-8

Created with Ridero smart publishing system

Preface

Dear Reader!

This book is not based on my experience, although I started businesses and even now I am the founder of YourGroup Holding (yourgroup.ru.com) in my 17 years, but I can not give business advice because of the small amount of experience. BUT DON’T YOU DARE CLOSE THIS BOOK! I have talked to many successful entrepreneurs, learned a lot from them, and I am ready to share this information with you. This book is suitable not only for those who are just looking for a business idea, but also for those who already have a business. This book will help you find an idea, choose a sales strategy, tell you about the basics of online promotion, and much more. Throughout the reading, you will be given the tasks recommended for completion. Of course, you may not fulfill them, but know that only you are responsible for your future.

I sincerely hope that this book will be the beginning of something new, the beginning of positive changes in your life.

WHERE TO START

The motivation of the entrepreneur

There are many motivations, for example:

– Business to realize your dreams

– Business to implement your ideas and initiatives

– Business as a financial instrument

– Business for your financial well-being

– Business for your personal and professional development

Understand why you need to be an entrepreneur.

Three qualities necessary for an entrepreneur:

1) Determination

2) Attention to detail

3) Perseverance

How to find your business scale and format

There are four business scales:

№1. Self-Realization (a business where money is not the main goal)

№2. Closing needs (a business that will allow you to close your needs, but no more)

№3. Sustainable business (a business in which the owner can afford to give work to other people)

№4. Wildest dreams (Corporation)

Make a decision – what scale of business do you choose for yourself.

The bigger the business, the more money you need to launch it.

How and where to look for business ideas:

1. Do what you like

2. Do what you do well

Formula for success: interest + skill = your business idea.

When you understand what is interesting, you need to determine the type of activity:

● Sell what you are interested in;

● Teach what you are interested in;

● Advise on a topic that interests you;

● Share information about what you are interested in;

● Invest in a field of activity that interests you;

● Engage in production in a field of activity that interests you;

● Organize events that interest you;

● Take care of what interests you;

● Provide entertainment in a field of activity that interests you.

Task: choose three of your areas of interest that are very important to you today, and then choose three of your areas of expertise that you are best versed in, connect three areas with three competencies and see what kind of business you can build.

How to choose the most promising idea

Now you have 3—4 business ideas. What should you do next? Every business idea can be tested. In order for the project to start well and develop well, you need to take into account two points:

1. Resources (your funds, capabilities, and competencies);

2. The speed of the launch of this project;

Now rate each project from 1 to 10 points, based on what resources you have and how quickly you can start the project. The project that scored the most points should be implemented first.

What employees are needed and how to distribute roles between them

Success in business depends on the quality of the team.

There are 4 roles in the team:

1. Controller (result-oriented and goal-oriented. This person will always keep the whole team in good shape and remind you of the results)

2. Motor (a person who creates the right mood of the team, which has no obstacles, who will move the entire project and promote it to success)

3. Support (a person who creates high-quality relationships between team members)

4. Analyst (a person who provides information for decision-making)

Ideally, each person should have a role, but at the start you can combine all these roles in yourself. However, these roles must be present in the team.

Task: right now, think about whom you specifically need to attract to the team, what kind of people can they be? What can you already actively manifest in yourself, and who do you need?

HOW TO BUILD A BUSINESS MODEL

What is the business model and how it helps the company. How to model a business to reduce risks

The business model is a visualization of your future project. The business model is used to describe the basic principles of creation, development and successful operation of the organization, reflects the mechanisms and logic of the business, covering its key areas.

Everything is simple, if you have a good template. Fortunately, there is such a template-this is the template of Alexander Osterwalder.

Task: fill out the template.

Start working with the template with consumer segments. Move sequentially along the pattern from the right part to the left, working through each block.

What questions to ask yourself when building a business model?

● In the «Consumer segments» section, you should ask yourself the following question: «What groups of customers is my business focused on? Who will come and buy my products and services?»

● In the «Value Propositions» section, you should ask yourself this question: «What can I offer my customers? What customer needs will we meet?»

● In the «Customer Relationships» section, you should ask yourself the following question: «How will customer service be organized?»

● In the «Channels of Distribution, Sales and Communications» section, you should ask yourself the following question: «What will be the points of contact of the company with the consumer?»

● In the «Sources and amount of Revenue» section, you should ask yourself the following question: «What will our customers pay us for and how?»

● In the «Key Activities» section, you should ask yourself the following question: «What does the company do best to generate revenue streams?»

● In the «Key Resources» is to ask yourself this question: «What do I need in order to start a business?»

● In the «Cost» is to ask yourself this question: «What are the costs involves our business model?»

● In the «Key Partners» to ask yourself this question: «Who and what I can charge, in order to facilitate their main activity in business?»

These are the main questions you should ask yourself when filling out the template.

Recommendations for getting started with the business model template

What you will need:

1. Large sheet of paper

2. Stickers

3. Pencils

4. Lots and lots of patience…

Let us start with a little warm-up, you need to ask yourself the questions: «What do I want to achieve by starting a business? What do I want to avoid? What do I want to keep, leave unchanged?» The answers to these questions should be written down. These questions are very important because they describe your goal.

Write the answers to the questions of the blocks on colored stickers and glue them to each part of our template. Let there be many answers. If there are no answers somewhere, but only questions – write down the questions. At this stage, it is important that there is a lot of material.

After the template is completed, based on what is written in the template, try to tell the story of your business as if it already existed, functioned, and worked. As you talk, move from the right side of the template to the left side of the template. Based on the template, describe your business:

– as its owner

– as a client of this company

– as a competitor or bystander

When you tell and follow what is written, you will surely find more hidden resources, broken connections, inconsistencies, questions. This is all material for you to think carefully and add information to your template.

The last step in working with the template is to commit the plan. Record what decisions came to your mind after you have written the entire template and told the story of your business. Record what you need to do, in what time frame, and how you need to do it. When you have a ready-made plan of action, you can consider that you are already a few steps away from success. But it’s too early to relax, you need to start acting.

How to get expert help when creating a business model

Each of you who tried to work with this template has already appreciated how many ideas, thoughts arise along the way, and how difficult it is to «digest» all this material alone. Therefore, it makes sense to go to those people who can help you, who are experts in some kind, who have a lot of life and business experience. But you need to go to these people according to strict rules:

– invite 3 to 6 people to discuss your business idea, if you invite more than 6 people, there is a risk that the discussion may come to a standstill due to a difference of opinion

– define the role of each participant

– describe the basic logic of the template, the questions, and the main areas in this template

– introduce your business idea to the audience based on the template blocks

– enter a ban on criticism. Keep a constructive mindset when working with your business model

– fix all the meanings

– say, «thank you» to everyone who participated in this discussion

External factors and their impact on the business model

Even the best ideas are broken down by reality, even if you have drawn the business model very accurately and clearly, attracted the best experts for advice, the fact is that there are still a few things to consider:

1. Consumer advice. Be attentive to the customers of other companies, because the customer always knows better how to provide him with a service or how best to deliver the goods.

2. External environment. Analyze the environment, look for trends that occur in the economy around us which industries evolve, what industries are in the stage of decline – all this important information, which will allow you time to adjust your actions and make management decisions.

As you move forward with the business model, you have already noticed that this work provides a lot of answers to your questions and helps you make an actual management decision. If you were able to get a complete picture of how your business will function, then you probably already have the answers to these questions:

– Is this my business?

– Can I raise this business or do I need partners? And where should I look for them?

– Do I really want to do business?

– What will my customers get?

– What values do I create in the world, in life, in the market?

But also many other answers. All these answers lead you to the main decision-the willingness to implement your business idea.

WHO ARE YOUR CUSTOMERS?

Classification of business types

There are 3 ways to make money in business:

1. Production:

1) own product

2) product according to the customer’s documents

3) product development for the purpose of selling technology or business

2. Trading:

1) sale of everyday products and distribution of goods of large manufacturers

2) franchise (work under the brand of the product manufacturer)

3) independent purchase of goods from the supplier

4) wholesale trade

5) selling a digital product

3. Provision of services:

1) training

2) consulting

3) preparation and execution of documents

4) representation of the client in relations with third parties

5) body care (treatment, beauty care, fitness, etc.)

6) maintenance of the territory, equipment; household services

7) transportation, logistics services, etc.

All these activities can be divided into 2 classes:

1. You are part of someone else’s big business

2. You are implementing your own entrepreneurial initiative

Task: take a pen, paper, a completed template and see what type of business your business belongs to. This will determine how you will build your future business strategy.

Features of interaction with clients in different types of business

Those of you who decide to do business selling everyday products, your business will be little different from the business of a neighboring outlet. In this case, you do not need to make any large amount of efforts to study your customers, the target audience. Those who offer you goods for sale have long done this for you. Your task in this case is to pay great attention to the location of your outlet, how customers come to your business, how they find you.

There are only three ways to get customers:

1. Point of sale – in the flow of customers, for example, the most crowded street in the city.

2. Attracting Customer Flow to Point of Sale

3. Face-to-face meetings with the client.

When we talk about the target audience, we very often mistakenly define «who is our client.» You need to know four clear characters who are in contact with our product:

1. User (the one for whom the product is made)

2. The one who pays the money. Very often, someone who pays money is not a user, for example, mom buys a toy to her son

3. The person making the purchase decision. It may well be that my mother has money, but the decision to buy a toy is made by dad.

4. The one who gives advice to the person making the purchase decision. For example, a person with whom dad consulted.

Basic Principles of Customer Development

Before we go any further, we need you to pay attention to one very important thing: that today we live in a world of oversupply, overproduction, in a world where you can buy everything, there would be money, so now you need to be puzzled not by how to develop your product and «push» it to the market, but by the fact that we discuss every step, every stage of the development of your product-invention with our potential customers and at this stage of discussion we make them our supporters, future buyers.

To solve this problem, several techniques have been devised that allow you to bypass it. One of these methods is called Customer Development. If everyone used to talk about creating a product, now everyone is starting to talk about creating customers. As entrepreneurs, you should not try to find a niche that you will fit into, but create your own niche. When developing a product, you need to interact with your future customers, studying their demand at every step, at every movement around the development of your product. You need to create this audience that will buy from you. Remember that a product is a fairly broad concept. It can be anything you produce, whether it’s buns or a service.

In Customer Development, there are 3 principles to follow:

1. A hypothesis is just a hypothesis. When you go to people and start talking to them, things may not be the way you imagined them to be.

2. Verification-confirmation of hypotheses, confirmation of your facts. You should go to people, talk to them, offer them your product, test this product on them, look at feedback, go back to your office, think about everything you saw, heard, what comments you received, refine your product and go back to people (this is the third principle – cyclicity).

3. The cyclical nature of constant product development. We made a product, tested it on potential customers, realized what needed to be changed, changed it, and went back to testing. And so on until you get a convincing answer from your potential customers that they are satisfied with everything, they like it, they share your thoughts.

Task: think about who you might ask, whose opinion you might be interested in, when you talk about your product, idea, or solution to a problem. Take a pen, paper, and make a list of 20 people you can talk to about your business idea.

The product life cycle. The user path

Very often, when an entrepreneur begins to study customers, the market, build a business, thinks narrowly about his business, in a very narrow area, does customer research, conducts analytics, etc. This is a mistake that does not allow you to see a huge number of opportunities that lie in the time interval when the client before he came to your office, and after he left you. There is a huge amount of advice on how to improve your business, distinguish it from competitors, and make it interesting for the client. How do you find these tips? If we recall the product-oriented approach, there is such a thing as the «Product Lifecycle»:

1. development

2. production

3. delivery to the point of sale

4. sale

5. transportation

6. Installation

7. training in the use of

8. maintenance and repair

9. dismantling

10. removal and disposal of the product

1. Production:

1) own product

2) product according to the customer’s documents

* The steps depend on the specific product

And if you follow this whole wide chain, you will see that in fact you could be useful to the customer both before installing your product, and after he decided to get rid of your product. Moreover, you can find places where you can earn extra money. For example, you can organize training for the customer to use your product. You can do it for free, trying to encourage sales, but you can do it for money. Imagine that you understand that there can be huge problems with the disposal of your product, you cannot just take and throw your goods out on the street, for example, fluorescent lamps, and they need to be disposed of in a special way. You may have the idea of expanding your own business or starting a completely different business related to the disposal of already old, used goods.

The user’s path – the actions and emotions of a person at all stages of the product life cycle. Where the customer was happy with the product, where he had problems with the interaction of your product.

Now, if you superimpose the «product lifecycle» on the «user path», you can be surprised to find the very places of growth of your business where the customer actually had some serious problems with the use of your product or service.

Task: try to suggest what doubts or problems your customer may have at different stages of using your product or service.

The answers can be the basis for making marketing decisions

The consumer matrix is another way to generate a huge number of ideas for your business.

The client:

1. Buys the product

2. Does not buy the product

It’s obvious. But why the customer buys or does not buy – questions that are more difficult to answer. This is what the consumer matrix is for.

There are only 3 options for why the customer uses your product (service) or not, and whether they use it at all. These are the reasons:

Task 1: Find all these six categories of people. Only customers can point out the advantages and disadvantages of your product. People of the first category, ask the question – «Why buy from us?» the arguments of these people will be the basis for communication with those who are still not your client, of two «Why not buy from us?» 3 – «Why buy a substitute product?», 4 – «Why don’t see the value in the product?» – these people will be able to point out the «weaknesses» of your product, of 5 – «Are there Any restrictions?» the answers these people can be the basis for marketing decision making, 6 «In which case the product will be relevant?» As you can see, the quality of the questions determines the quality of the answers. Answers are the basis of communication with potential customers.

You will have only two types of answers:

1. Positive

2. Negative

Also obvious. If everything is clear with the «positive» ones, then you need to work with the negative ones.

Task 2: Write down all the positive and negative reviews in a list, and next to each of the negative reviews, five solutions for how to fix these problems. Solving these problems will improve your product, and therefore increase the number of customers.

Consumer Research

We have only two opportunities to get feedback from people:

1. Interview: you ask questions, listen to answers, and take notes.

2. Observation: see how the customer uses the product, record it.

Task: to conduct 50 interviews, asking the following questions: «What suits you in the product? What doesn’t suit you? Why?» Structure the information you received from people. After the interview, thank the person and ask: «Can I contact you again?» Very often, people are very actively involved in the research process, and many of them begin to actively follow the development of the product, and are happy to become customers.

Your task is to «get into the skin» of the client and understand what prevents the client from starting to use the product (service) right now. When you ask questions, you should understand that a person says one thing, thinks another, feels a third, and does a fourth.

Your main task is to find customers and make deals with them. Therefore, you should know everything about the client: what he breathes, how he lives, with whom he communicates, what he is interested in, what he is not interested in, how he dresses, etc. Remember that customers bring money to the business; they should be the focus.

THINK LIKE A MARKETER

How to improve the efficiency of the business model?

Let’s go back to the Alexander Osterwalder’s template (I hope you filled it out). This model gives us much more opportunities, it can be used as a real analytical tool that allows us to look at our business and understand what it should be.

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