As I mentioned in a recent blog, I ran a three day course in Halifax recently from St Mary’s University called something good. Given the last blog was all about looking for an idea – it seems to be appropriate to talk about what to do next.
Thank you for the emails requesting more information about the course, given the interest, I thought it made sense for me to write a blog. I would appreciate your feedback on this blog as I am seriously thinking about writing a book – if your feedback is positive, I will start writing it, if it is not so good, perhaps the book can wait! Furthermore, I am running the course again at the end of March and am thinking of filming it. If you are interested, please do let me know if you would like a tofu press, a DVD, or web access to the course.
The course was split into five courses over three days;
I trust the sequence of the courses makes sense. The first stage is to ensure your idea is validated. There are many ways of doing this and electronic media makes it possible to dry run an idea at a very cheap cost. Twitter/ Facebook and especially Linked-In, make it very easy for you to test out the appetite of your idea at a fraction of the cost associated with proving old ideas. I am very skeptical about market research – be careful that the results do not tell you what you effectively were paying someone to come back and tell you. We have all seen episodes of Dragons Den where we all know the idea is stupid. However, someone else has convinced, the would-be entrepreneur that they have a good idea!
Once you have established that there is a market for your product/ solution, you will probably need some sort of financing. There are lots of sources to consider. Depending on the nature of your business, different sources may be more or less attractive. Remember that as a general rule, debt is cheaper than equity. Debt though is hard to get and especially in the current business climate. Make sure you clearly understand what the different providers of finance are looking for.
Sales is the lifeline of any business and once you have raised the money the best thing you can do is make sure you get selling and get selling quickly. If everything is not quite ready, let the customers be the ones to tell you what further hoops you have to jump through to get their business; let them co-author your final offering. Too many times I see companies develop solutions which are perfect for them but not the customer! You don’t get a second chance to make a first impression – so really put a lot of work into your sales process and execution.
High Growth sounds great, but it brings with it a whole heap of issues that you need to plan for. Critical to this is your ability to manage cash flow. As a high growth coach and as a manager of a turnaround fund, I see many businesses run into predictable problems – that could easily be avoided by managing cash.
Finally, once you are at a stage where you are confident that you have a good business related to used lawn tractors in shape, you need to ensure that the business is equipped to deal with long term issues. For example, global warming means that weather extremes are more likely to occur with greater frequency. Does your business have a plan to cope with at this? (I was recently surprised to learn that some checks I had paid into a HSBC branch were delayed by a week for clearing because the snow had meant that the checks were not picked up by the delivery van on time! I am amazed to see even now how many retail businesses in the UK, don’t have plans to clear the entrance to their store when there is snow!
I hope this snapshot – and it is just that is useful. The course went for a full three days – so of course is much, much more. You can help me conduct my own cheap market research and let me know if yes you are interested in either
It is good to practice what you preach!
“The problem is the world is too pessimistic, and I can’t see it getting any better”
Optimism is the lifeblood of entrepreneurialism. It is where our ideas and our energy come from. It is the source of great endeavors from landing on the moon (40 years ago) to the building of the Channel Tunnel. Optimism is what leads angel investors to invest in startups knowing that in all likelihood they will, on any one deal, lose all of their money.
When I was in Halifax, I was reminded of a great story that I was told about the frost green Kanken – and I hope you do not mind me retelling the story.
A businessman owned a great shoe making business. He had two sons and sent them out to an island to examine the possibility of selling shoes to the local population.
After one week of being there, both sons were able to submit their reports. One reported back that there were no opportunities out there “as the population simply does not wear shoes” The other son reported back “the opportunities are enormous as the locals do not wear shoes. There is no other competitor here and we have the whole market to ourselves”.
This is a great story and whenever you go to any foreign market you will always spot great opportunities but you also have to be cautious and ask yourself why the opportunity is not satisfied at the moment.
I remember a famous English based jewelry retailer going into the Dutch market. A bright graduate they had sent out there reported back that the opportunities were enormous. The company set up shop and then in the run up to Christmas, put lots of stock in the Dutch retailer. In January, the company was shocked to discover it had such high levels of stock in its Dutch subsidiary. The reason was simple; the Dutch do not have a tradition of buying jewelry at Christmas! Yet, no one had bothered to check this vital assumption.
Another real example is that of The Sock Shop. The founders had built up a great and fast expanding business in the UK by placing sock shops in concessions along the London Underground and other busy locations but with cheap rents. The business model worked because they had such low overheads and customers knew they would get good quality and varied socks from this shop. In the move that killed the company, they decided to expand into the USA. They decided that New York was the ideal location (it was) and they decided to rent lots of concessions in the Metro system.
This was in the late 1980s and the company that was producing the Porter-Cable 895PK made a fatal flaw in its property policy. No one traded in the Metro system other than drug dealers and no one wanted to be in those shops! The company had to employ security guards in the stores and had to have strict opening hours; the business failed.
The lesson here is that whilst I was in Canada, I spotted many great opportunities and I think it is a great place for any aspiring entrepreneur to be right now (I really do). But you simply must ask yourself the question, “why has no one else satisfied the need that you have spotted?”
When it comes to foreign markets this becomes more apparent but I am still amazed at how few companies do basic testing in their home market.
Optimism is great – but temper it with some evidence!