Starting Your Own Business

Starting Your Own Business



Starting Your Own Business
Once you make up your mind you want to​ go into business for yourself,​ that leads to​ a​ number of​ important decisions .​
You know you want to​ be your own boss,​ but you're not sure what kind of​ business to​ go into .​
Here are two different ways of​ addressing this question.
The Production Model of​ Doing Business
Most of​ us start out in​ business by applying what we​ might call the​ production model .​
We are all capable of​ doing certain things -- cutting hair,​ cooking food,​ framing houses,​ fixing teeth,​ designing buildings,​ etc .​
-- and we​ set about to​ sell these services .​
We ask ourselves What can I​ do? What are my skills?,​ and then we​ ask How can I​ sell these skills? What products can I​ produce that take advantage of​ these skills?
Many,​ many people believe the​ production model is​ the​ only way to​ do business .​
They believe Kevin Costner in​ Field of​ Dreams was uttering an​ important truth when he said If you build it,​ they will come .​
They just change the​ words around a​ bit:
If I​ set up my restaurant,​ people will come.
If I​ start building bird houses,​ people will flock to​ my store.
If I​ set up a​ lemonade stand,​ the​ neighbours will buy some.
If I​ learn to​ be an​ airline pilot,​ surely someone will hire me.
And generally,​ this works .​
People go to​ school to​ become dentists or​ engineers or​ teachers,​ and they actually end up being dentists,​ engineers,​ and teachers .​
Other people love to​ cook or​ make bird houses,​ so they set up restaurants and craft shops,​ and miracle of​ miracles,​ their restaurants and craft shops are actually successful.
But this is​ an​ oversimplification of​ the​ marketing process,​ and distorts what actually happens on​ the​ ground when a​ new business is​ started.
One important reason trained dentists end up with successful practices is​ because the​ dental market is​ tightly controlled to​ allow only the​ right number of​ dentists to​ graduate every year.
And the​ reason we​ can point to​ successful restaurants and bird house companies,​ is​ because we​ are looking at​ them after they have been successful .​
What about all the​ restaurants,​ construction companies,​ and land development conglomerates that were not successful? Their owners were probably equally skilled,​ and enjoyed cooking and serving the​ public as​ much as​ the​ next guy .​
They built it,​ and nobody -- or​ at​ least,​ not enough people -- came.
So obviously going into business is​ not as​ simple as​ If you build it,​ they will come .​
There are factors we​ cannot control,​ variables we​ cannot predict .​
And once we​ acknowledge this,​ we​ are forced to​ begin looking for an​ alternative to​ the​ production model.
A Real Life Example
Let me give you another example .​
Many years ago,​ long before the​ internet even existed,​ I​ had a​ client involved in​ the​ music business .​
This company had been around for many years,​ and had grown to​ become one of​ the​ country's major publishers of​ certain niche music products .​
These were aimed mostly at​ the​ music-in-schools market,​ and included things like sheet music,​ children's music,​ and specialty record albums,​ featuring a​ stable of​ relatively low profile artists.
Like most companies,​ this one had built up a​ set of​ skills,​ and had developed specific products and services in​ response to​ market demand .​
There was just one problem .​
The market was changing and the​ company was now losing money .​
My job was to​ help them sell more of​ their products.
Sometimes being an​ outsider is​ not a​ good thing .​
It seemed obvious to​ me that the​ market was changing,​ that sales of​ the​ old faithful products were doomed to​ decrease rather than increase,​ and that the​ long term answer to​ their problem was to​ develop new products in​ response to​ new demands,​ rather then try to​ flog the​ old ones .​
It was hard for me to​ be a​ true believer in​ the​ long term success of​ the​ company .​
It looked to​ me as​ though we​ were fighting a​ losing battle.
Of course,​ this was the​ beginning of​ the​ end of​ our relationship .​
As I've said,​ my job was to​ help them sell stuff,​ not reorganize their company .​
Most companies have a​ very difficult time shifting gears,​ and they certainly don't want to​ hear about it​ from some young whipper snapper who knows virtually nothing about their business .​
Within a​ few months we​ lost the​ account .​
And within a​ year or​ so the​ former client declared bankruptcy,​ and was forced to​ contract to​ about 25% of​ its former size.
I don't think this is​ very unusual .​
Lots of​ companies -- probably most -- are successful for a​ while,​ and then fall on​ harder times and are forced to​ change .​
My point is​ that eventually the​ production model stops working,​ and we​ are forced to​ consider alternatives.
The Most Obvious Alternative is​ the​ Marketing Model
When confronted with these obvious facts of​ business life,​ most marketers trot out the​ theory they learned in​ Marketing 101 .​
You must begin with an​ analysis of​ your market,​ determine what people are likely to​ buy,​ and then develop products accordingly.
In other words,​ the​ marketing guy (predictably) advocates that the​ marketing / production process be inverted .​
Marketing should be used to​ determine which products are likely to​ be successful in​ the​ market place,​ not brought in​ after the​ horse has left the​ barn .​
Marketing should come before production,​ not after .​
Don't worry about what skills you have .​
Skills can be bought or​ rented .​
Worry about what products you can sell .​
And then figure out how to​ make them.
The purest application of​ the​ marketing model these days is​ in​ internet marketing .​
For example,​ take Ken Evoy's instructions in​ the​ Site Build It manual where he details how to​ choose your marketing niche .​
The process goes more or​ less like this:
1 .​
Choose four or​ five possible areas of​ interest you might enjoy .​
These are your website concept candidates â?? the​ type of​ businesses you should consider going into.
2 .​
Then analyze each of​ these website concept candidates in​ terms of​ the​ potential traffic you can generate,​ products you can sell,​ etc.
3 .​
Choose the​ one with the​ best sales potential.
This sounds like a​ perfectly reasonable procedure .​
But in​ fact it​ is​ rather revolutionary for most non-marketing people .​
They are being told Don't get production underway until you make some important decisions about what people are likely to​ buy .​
This is​ the​ marketing model in​ a​ nutshell.
Problems with the​ Marketing Model
The pure marketing model has one obvious problem .​
It assumes we​ are all sitting around a​ table as​ consultants with unlimited options and infallible information about all of​ them .​
The model seems to​ assume we​ can just feed the​ information into our decision-making machine and have the​ answer to​ the​ question What should I​ do? pop out the​ other end.
Even committed marketers know it​ does not work this way .​
Every person or​ organization has their own special likes and dislikes,​ and generally are good at​ doing some things,​ and not so good at​ doing others .​
Ken Evoy's procedure addresses this by saying Be sure to​ choose something you feel passionate about .​
He should probably add ...and make sure you're good at​ it​ too.
Think of​ it​ like one of​ those industrial food processing units where you put a​ variety of​ things in​ the​ funnel at​ the​ top,​ and it​ spits out products at​ the​ bottom .​
What we​ feed into our business idea processor is​ not just a​ bunch of​ statistics about products and markets and prices,​ but also information about our own preferences,​ skills,​ habits,​ and experiences.
And we​ must keep all the​ ingredients going into the​ top of​ the​ machine in​ their proper proportion .​
It's not just about what people will buy .​
And it's not just about what we​ are good at​ or​ what we​ enjoy .​
It's about all of​ these things at​ the​ same time.




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