Asked me to share some thoughts on business principlesWho am I? (Left the corporate world to start a business – it’s DAMN DIFFICULT)Had a few discussions with some of you and with industry expertsThe key challenge in any profession, but in particular yours, is how to make the transition from being an artisan to being a true business owner/ entrepreneur.
So what’s the difference? Well the key question is “DOES YOUR BUSINESS STOP WHEN YOU DO”Business is an asset that can be sold and will continue to derive value for the new ownersSo it is an asset because it doesn’t directly rely on your daily effort to generate cash.As an artisan, you are selling your individual skill. As an entrepreneur you are building an asset. Think about it as a system, a living organism, where the parts continue to function even when you are on holiday.But there is a key question that needs to be answered first – and that is summed up by what pavlofitidis said:…
You are all in different positions – some with established labels, others just starting out.This is key. Many are happy to continue as artisans and have no interest in building a business – and that is fine. But to build and grow a sustainable business requires a different mindset
To help answer this quesiton, I asked business partners what they look for in businesses.Business partners mentors, supports and finances entrepreneurial businesses and has done so for 30 years
They have a long running competition called entrepreneur of the year - I asked them for the scorecard that they use to judge these businesses to get a sense of what makes a good entrepreneur.
Business partners mentors, supports and finances entrepreneurial businesses and has done so for 30 yearsI has some of the biggest names EGThey have a long running competition called entrepreneur of the year - I asked them for the scorecard that they use to judge these businesses ot get a sense of what makes a good entrepreneur.
Dedication, desire, perseverance, ingenuity – the things that the judges are looking for.ITS DAMN HARD TO START A BUSINESSIt takes heart, perseverence, gumption, grace, talent and the ability to think on your feet. Like this guy
The hallmark of a successful entrepreneur is the ability to have a plan, try it out, learn from the results and adapt. This is the process that successful entrepreneurs follow.And this is not only for startups – large companies need to follow this process to seek growth and keep up with trends.
In fact, this is such a key truth that HBR has recognised a trend even in large corporates a more experimental approach.Have a good idea of what you want to do – using something like the business canvas or the business plan book that I will show you laterMonitor, test, listen, undestand – looking across your whole process to understand what is working and what is not. Talking to your customer, the shops stocking your goods and understanding what is working and what notAdapt – be responsive enough to change your plans based on what you have learntThomas edison’s vote counting machine: - each senator would call out their own vote – edisoncouldn’t believe this - he invented an automatic voting system - senators didn’t want it because there was a actually a lot more going on than meets the eye - “I never want to build something that nobody wants to buy” - he is famous for saying “I have not failed 10,000 times. I have not failed once. I have succeeded in proving that those 10,000 ways will not work. When I have eliminated the ways that will not work, I will find the way that will work.”
Marketing really is not only putting up a website, its everything that is required to bring your product to the market, including changing it if necessary, And the first and cardinal truth is the lost 11th commandment…
- understanding who your target market is – and that they may not look like you! - getting into their shoes and understanding what their needs are, what influences them, what their preferences are - understand what they would want to pay for different attributes - developing a solution that fits all of this in a way that is better than your competitors - create awareness with your marketLike this guy!
A great example of this is one of Virgins companies called limobikeThey created a service for business owners to be ferries around london on motor cycles - you would think that business men would want a nice car? - but tell that to a business man sitting in traffic on his way to the airport - business people actually wanted to get their quickly and safely
The solution:- quickly motorcycle - safely experienced riders - and they charge a premium for it
HBR case studyUnderstood what their clients wanted to pay forAnd built a hotel that made sure it did those things well – without wasting money on things that they don’t value as much (an approach called value innovation)This meant that they could beat their competitor’s price, but still offer clients what they wanted
How they did this was by listing all the typical things that a client would want in a hotel, and plotted what they actually wanted.In your world that would mean understanding what the end user is willing to pay for, and design the item with that in mind.
This brings me to the actual product. I spoke to a Foschini manager about this exact thing. I asked them what the key to a successful label is – how would they evaluate a product or range that came to them?Their reply was simple
DESIGNED FOR MARKET
Raw materials – 60-70% of the cost, so should absolutly should be driven by the target markets preferences and price pointLabour – are your designs complicated and therefore push up labour costs? This is fine, but make sure that the added complexity is really requiredWastage – complicated designs is one thing, but my contact at a large retailer told me that often young designers will design a whole range, assume which items will be successful and set about manufacturing for the whole season. He suggested: - design based on two fabric bases – that can be used for a number of silhouettes - manufacture a smaller amount and test what clients are buying - then as the season progresses manufacture more of that using your fabric bases
This is perhaps the most important hallmark of an entrepreneur, is to be able to empower the people around you to deliver. This is the true mark of moving from artisan to entrepreneur – in that as you empower the people around you
Pierre ConradieFounder of the Alpha groupEmploys 1200 people in rural Hluhluwe in a security companySuffered an accident and was off for 6 weeks.When he got back, his turnover was higher than when he startedThe true mark of an entrepreneur
