DON’T START SMALL, START WELL pt 2

DO YOU HAVE AN EDGE?

Many entrepreneurs have sunk in the euphoria of starting small. They have excluded themselves from the very standards set in the industry that they want to operate in. The danger of this is that SMEs are knocked out of business even before they step into the market. Having values to offer in business is not enough, but you must offer it in a better way than other competitors do, that is what gives you an edge.

Michael Porter discussed the importance of having an edge in business in his books: Competitive Strategy and Competitive Advantage. These are two concepts that entrepreneurs must take seriously while starting up. Not having an advantage or developing a strategy that will give you an edge in the market is killing your business before it starts. Having an edge in business is the reason consumers may want to buy from you rather than your competitors.

The bigger businesses are not your friends, they see you as a threat, and will fight you with all they’ve got. This makes it a big risk to go into business without having a value, and a means to deliver such value better than competitors

Although Adam Brandenburger and Barry Nalebuff in their book: Co-opetition, looked at ways firms can complement the role of each other in business, competition in business serves the consumers better. According to Michael porter, competition reflects on the performance of the firm, and influences how things are done. As a small business owner, you must learn how to survive with the competition in the market.

An edge in business helps you to match your business strength with the market need and neglecting this aspect in business, tantamount to being myopic in your business.

3 Ways to enhance the value of your product

To grow your business, value creation must be a priority. SMEs must create additional values beside the primary function of their products or service.

Consumers buy value, and value is usually influenced by perception. Influencing the perception potential customers have about your product could be a means of closing the sale faster.

You may not always have the opportunity to physically enhance the value of your product or services when you are with the customer, especially when they are rejecting your offering. But you can change their perception about your product. Consumers are emotional, whenever they want to spend their money and often times, they don’t spend the money on the best products but rather on the products they perceive to serve their needs. They may not know what to expect from a product however, any product that create that emotional connection with their needs, gets bought.

There are 3 things SMEs must do to change the perception of consumers about their product, as well as enhancing its value.

1.     Always ask, what exactly do you want?

Before attending to a customer, one thing I do is to re-phrase their needs in my own words to make sure we are on the same page. For instant, a customer can tell you that she needs a cake. Cakes come in varieties, it is your responsibility to find out, what kind of cake, and for what occasion? Don’t always take consumers’ expression of their needs at face value; make enquiries to know to what extent the consumer knows the product they want to buy and why they want to buy.

2.     Educate the customer

According to Zig Ziglar, the reason that your potential customers keep rejecting your product is because they do have enough information about your product. All the consumer needs is additional information on while they need to patronize you rather than the competitors.

In providing this information, you can do a little comparison of your product and others by highlighting the best features in your product. Compare base on your competitive edge. Be careful not to condemn other products so the consumer doesn’t think you are trying to sell.

3.     Present more features

One major problem SMEs face is inability to offer more. The average consumer wants to pay less for more. They want you to answer the question, “What else can I get from your product beside its basic function?” So when they are reluctant to make a purchase, they have not seen enough values that can force them to part with their money. This is one need a consumer will not tell you about, but wants to have it.

If you want to close the deal with your customers, Always ask what they want and why, educate them on how your product can meet their needs, and then present the features of your product or service. The more you educate them about your product, the more value you are adding to it and the higher the chances of changing their perception about your product or service.

DON’T START SMALL, START WELL part 1

You had been advised in business to start small, no matter how small, just start. Is there a problem with this approach? Yes! Don’t get me wrong, there is nothing wrong starting from a point to grow your business, but starting well is better. Does it mean starting big? No, it means starting small but running the business with the same principles successful businesses strive on. Principles like good book keeping, effective and efficient in managing tasks, punctuality and commitment to service. Whatever you need to make your potential clients or customers to take you serious, do it.  

It sounds weird, but you are setting a standard for your business. This is an area were most SMEs default when managing their business. Don’t wait to grow big before you create a culture for your business. Successful businesses excel on principles that create a standard for their businesses.

Starting your business well helps you to

1. Be focused on the big picture
2.  Create the discipline that is obtained in the corporate world in your business.
3. Set a culture that will sustain the company to maturity 
4.  Helps you to look at your business beyond you

As your business grows, you can expand as you desire. Always bear in mind that the business world is a jungle where only the smart survives. So, if you want to be taken seriously, you must manage your business the way professionals will do.

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How much is your decision worth?

Good managers who earn high wages are paid to make good decisions for the company. What is considered their worth is actually the worth of their decisions; this is because good decisions earn more. When people trust a leader, they simply trust his judgments. People come to believe in them because of previous decisions that yielded positive results.

Today, relying on guts and instincts for your decisions can be very disastrous. It does not only waste your resources, but are prone to fail.  And when you fail several times in making good decisions, your decisions lose value. You need an evidence/objective based system to boost the credibility of your decision making.

Here are a few tips to help you boost the worth of your decisions:

•   Gather relevant data

Always support your claim with relevant data. Any decision you want to make that cannot be sufficiently supported with evidence, is likely to lose its credibility. For instance, if you want to make an investment decision, you may want to look at the previous and current performances of the business, those managing it, and their capabilities etc.

• Make the connections

When you have gathered the relevant data, check to see if there is any connection linking them up, does it follow a logical sequence? At this point, cause-and-effect reasoning plays a vital role. Can the excellent performance of a business over the years be attributed to good management, or are there other factors to look out for? There has to be a relationship between the various data collected.

• Research, Research, Research

Explore the world around you, ask questions, and observe happenings in every situation. The information you gather from these exercises can boost the worth of your decisions. So far, conducting researches is still the best means of bridging the gap between what is known and what is not known. Never stop researching, it guides your decisions

A systematic decision making process can help you to achieve a valuable and worthy outcomes. Make your decisions count.