Tuesday, May 31, 2005

Turn Any Idea Into A Business in 7 Steps

How to Make More Money with Less Time and Effort
by David Krock, President, Krock Business Development
Copyright (C) 2005 All Rights Reserved.

Wham!

The idea has taken you, and there's nothing you can do about it. You aren't cynical enough to talk yourself out of its brilliance, so here you are, wondering how to bring it to life.

Assuming you're onto a business idea, let's examine my suggestion for creating it in reality:

1. Clearly articulate the problem it solves, or the value it brings to those who may want it.


2. Determine how the business model will work.
By "business model", I mean the method via which your idea can be delivered, and the compensation that will be received for it. This step involves such things as determining the costs to bring your idea into the world, the monthly overhead to continually deliver it, the profit margins it could produce, and whether it is likely you could sell enough of it to meet the aforementioned costs, plus reasonable net profits.


(Assuming you have reached a positive theoretical outcome to Step 2, continue...)


3. Create your idea a 2nd time.
The first creation was theoretical, conceptual. Now, make it real. A.k.a, produce a prototype. Make it tangible, usable. Make sure other people can hold it in their hands, try it out, download a free trial, etc.


4. Determine whether those people would actually take real money out of their wallets, and hand it to you.
This is KEY! This is called "proving the business model". Far and above any other intagible "possibilities" for success, by proving people will pay you for your idea, you can now:
a) Win key business partners,
b) Raise capital,
and
c) Actually sell the stuff (people like to know that someone else has bought before they'll test the waters).
This step also helps you hone in on WHO your market is, who's pain or desire is great enough to pay good money for your idea. The goal here is to determine whether the pain your idea solves is great enough, among a large enough group of people that it is worthwhile to undertake.


5. Develop the sales system.
This is the flashpoint of your business. The transaction itself. This is where all of the thinking and planning you've done will prove to be either wheat or chaff. This sales engine will drive you if running properly, and it will stall you if not fiercely protected.


6. Focus on developing the systems to deliver your idea.
Think of your business as a pipeline. In goes the need/order/parts and out comes the fulfilled promise. Inside the pipeline are the order taking processes, the customer service processes, the fulfillment processes, the marketing processes, the management process, and so on. These all need to be articulated and possibly delegated, or your business will run you. (Special Note: If you'd rather not develop the entire business yourself, this step can be bypassed if you effecitively acquire business partners, or license your protoype to an existing organization.)

7. Run the business.
Maintain the systems, lead your people, and create an environment for new ideas to flourish. Periodically tweak your business model (running through these 7 steps to see how you're measuring up wouldn't hurt) to become more effective at delivering on your answer to Step 1.

Thursday, May 26, 2005

Target Marketing To The Long Tail

How to Make More Money with Less Time and Effort
by David Krock, President, Krock Business Development
Copyright (C) 2005 All Rights Reserved.


Special Note: If you have not heard of The Long Tail, or simply haven't gotten around to figuring out what it means, here are the quick links:

1. The original Long Tail article in Wired magazine

2. The current Long Tail blog
- Awesome stuff!
3. The Wikipedia definition of the Long Tail

The basic gist has been summed up by Seth Godin this way:
"Give people 1,000 channels to watch, and they won't all watch the same thing. Give people 1,000,000 books to read, and they won't all want to read a bestseller."
The reality is, people have varying interests, most of which they'll support with their disposable incomes, and in many cases, their indisposable incomes.

Consider the music industry (which is near and dear to my heart):

It's been long known among the progressive minds in the music industry, that the current distribution and promotional models are dinosaurs, due to become extinct, not through a catastrophic meteor impact (like people stop wanting music or to pay money for it), but by simple attrition.

In fact, people are still spending money on music. In fact, the amounts are still
growing each year. Where they are spending the money has shifted. It's shifted down the Long Tail.

David RD Gratton shows in his blog post "What's Really Happening To The Music Industry" the following graphic explaining how the industry has typically operated:


With the leveling of the music production playing field, and the proliferation of the internet, musicians can now create, promote, and distribute their music to their target markets:


How is this meaningful?

Let's say you play the theremin in a psychedelic middle eastern band out of Lake Havasu City, Arizona. While your local fan base may not be very large, the global market for your music could be in the hundreds of thousands, or even millions. My Google search on the topic returned 202,000 results.

By leveraging the power of the internet, and with some sound internet marketing strategies, your group can reach its potential fan base like never before.

More on how to use target marketing to reach
your global marketplace in an upcoming post.

Wednesday, May 11, 2005

Elevator Speeches for Fun and Profit

How to Make More Money with Less Time and Effort
by David Krock, President, Krock Business Development
Copyright (C) 2005 All Rights Reserved.


"So, what do you do?"

When you meet someone on an elevator, how do you answer that question? You've got about 10 seconds to make an impression before the thing hits the ground floor.

What do you say?

Utter a single "I'm an attorney" or "I buy houses", and the other person is free to decide what that means, using their own pre-judgements. When they do, who takes control over your marketing message? That's right, THEY do. That won't garner you new business.

What if I told you that, in 10 seconds, you could grab the attention of the person who needs your service most? What if you could control the conversation from word 1? Would that save you a TON of time at that next networking mixer?

It's simply a matter of thought and preparation. Here are 4 easy steps to building a great "elevator speech":

1. Start with a question that triggers a problem.

Take the single biggest problem your product or service solves, and turn it into a "You know how..?" question. Example: "You know how most new businesses fail in the first year?"


2. Wait for an acknowledgement.

This usually comes as a nod or a verbal agreement. If you get a "what do you mean?", you'll have the opportunity to elaborate, but this is usually because you've not articulated the problem well enough, or worse, that person doesn't really see it as a problem! Go back and re-craft your opening question until you get a nod the first time out.


3. Solve the problem.

Example: "You know how most new businesses fail in the first year? Well, I help business owners not only beat those odds, but make more profits on less and less of their own sweat each year after."


4. Shut up.

Believe me, the person who can benefit from what you do will ask to hear more. They may even add their own anecdotes, etc. If you've got a likely candidate for your solution, they won't let themselves go quietly into the night. If they aren't a candidate, you've wasted no more than 10 seconds of your time. No muss, no fuss, no cleanup.

Crafting an elevator speech is part of developing an overall Unique Selling Proposition (USP for short). Your USP is the thing that sets your business apart from the rest, the benefits you can give that your competitors can't.

More on USP's very soon.