Perspectives - Selling Shoes story

Long time ago, i attended a creative training. The trainer was not impressive - the session was boring in fact. However, one takeaway for me is this story he shared with us which i remembered to this day. Here's the story.. but i modified it a bit..

One day, John the GM of a shoe company assembled David and Tom to his office. And he told them that he intend to find new market for his shoes. Separately, he sent them overseas toa developing country. David who flow off first reached the place and was dismay to find that the folks there were so backward that they dont wear any shoes. Tom arrived a day later and found the same conclusion. However, he was happy with his findings.

A week later, back in John's office, the GM asked them for their assessment. David, in his rather depressed tone, said that there is no market as no one there wore any shoes! GM then turned to Tom who was grinning all this while. When it's Tom's turn, he said he saw great potential there as no one wore any shoes! So there's a huge market to be filled. A very big market gap waiting for them to develop! ;-)

Lessons learned: (i) see things thru different lens, (ii) employ people who view things differently from you, (iii) always challenge your beliefs & creativity

Running a home-based business

If you have been retrenched or sick of your present job, you may be inclined to think of starting your own business. It can be a tough but rewarding journey. And many may not have the big budget or financing needed to rent an office or hire staff.. So, probably the next best thing is to do it on your own and at home.

I've listed 7 pointers below to help us in our thinking process.. like a checklist..

1. Niche market. There're many businesses out there selling millions of goods or services. So, you must find your own niche to differentiate yourself from the rest. Otherwise, you will end up in the commodity section where people fight on price alone.. Apply market segmentation wisdom here.

2. Branding. Even if you are a small player, branding is still important. Whether you are selling your service or simply yourself, you need to brand it. Branding is not just a nice looking logo. It is everything about your business, practices, product/service, image & you! Even how your website looked reflect the intrinsic value of your brand.

3. Be creative. Be innovative. To stand out from the crowd, you have to be creative and innovative in all aspect of your business. Being small means you can be flexible in your offering to prospects. Use that to your advantage.

4. Have a plan - financials, milestones & targets. And follow thru while fine-tuning along the way. Even a one-man outfit still need a good plan. Set revenue & profit targets. Set milestones. Set review date. Do perform scenario planning - best, normal & worst case scenarios. Finally, the most important for startups is the cash-flow management. In it, you must learn to manage your receivables well. You may have booked your sales but if no real money flow to your bank you will not be able to sustain for long. Beginning stage, look at your plan on a weekly basis..

5. Quality Service. Customer-oriented. All said, at the end of the day, the question is whether you deliver value to your customers. And service is one of the most important factor you must consider! In whatever you do, be customer-oriented.

6. Internet & technology as a tool. Make full use of Internet & technology to make your business more effective & efficient. Do note that these are just tools, however. Just because everyone is on facebook and twitter you must have a presence there too. It all depends on your target market. Do consider your ROI (return on investment) in these areas. For example, if your target audience dont use the internet or google most of the time, it may not be wise to invest much time, effort & money on Google ads. Having said that, you must review the status quo periodically as consumer behavior changes over time.

7. Do not mix work and play. Even though you are at home, do separate working and family times. At best, separate your work area as well. Discipline is called for at the highest level here. And try to keep in touch with the world out there! Sometimes you may be too closed up that you loose touch with the rest of the world. Call your ex-colleagues & friends out for coffee and catch up with them. Know what's going on other parts of the business world.

10/20/30 in business idea presentation

Read from somewhere the following pointers when doing a presentation to potential investors.

It's called the 10/20/30 rule of powerpoint.

a) 10 slides at most for your presentation.
b) present no more than 20 minutes.
c) font size no smaller than 30 pts.

The idea is to keep clear & concise with your business idea. The ten topics that a venture capitalist cares about are:

1. Problem
2. Your solution
3. Business model
4. Underlying magic/technology
5. Marketing and sales
6. Competition
7. Team
8. Projections and milestones
9. Status and timeline
10. Summary and call to action

Do you agree with his point?

The website link.

His video is very interesting too! Guy Kawasaki "The Art of the Start" @ TiECon 2006

9 things start up must know but no one tells you so!

From my working experience with small & medium size companies, these are the 9 key things that most are unaware.. especially for new startups..

1. Sustained earnings within 3 months. It is tempting to spent plenty of time looking for money and developing products.. and unintentionally loose focus on earning money in the beginning months. People wanted to improve & perfect their products first before rolling out to the market. But that may be a mistake. Learn from Google in this business era. Roll out fast. Improve later. Fail early. Fail fast. Early revenue will boost confidence & morale in the company.

2. Receivable management. Cash flow is the name of the game in recession. But actually it is a day to day operation imperative. Issuing invoice is not the end. You must monitor the process & progress. You may even need to call the client's accounts dept. Make friends with them. Understand their process. Who's signature required. Timing of their invoice processing. Active receivable mgmt is needed. Dont just sit there and expect people will write you a cheque.

3. Be close to the customer. Never, never leave your clients to your sales folks! You must go out and meet them. Get to know them. Get close to them. Know their needs and wants. No matter how busy with other operations activities you must never make this mistake.

4. Public relation. People thinks PR is expensive. But Internet is reducing the cost and you can do it for free by doing it yourself! Do your own press release. Write your own blog. Submit your release to news agency. Do it consistently overtime it will bear fruits.

5. Brand is not just a logo! It is everything! From people, process, product, company.. all represent the brand. Learn key elements of branding and protect it no matter what.

6. IT as an enabler. IT is not the business unless you are one tech firm. But leverage on IT to improve your efficiency & effectiveness.. especially customer experience.

7. Know your IP. Intellectual property is very important today since everything we do is in the form of intangibles. Tangibles such as hardware, equipment & building values are not as high as the intangible assets in today's context. Therefore, learn about the most common forms of IP and how you can protect & exploit them eg. copyright, patent, trademark, design,..

8. Competitors' response to your moves. If you play chess, you will know you need to think a few steps ahead and predict the opponent's moves and respond accordingly. But surprisingly, few does this mental exercise in real business world. Many have this great idea and implement it without considering how competitors will react and how you would need to respond.

9. Exit strategy. Most people hate to think about business failure. But over 90% of businesses failed in the first few years due to various reasons. Also, exit strategy doesnt cover only failures. It also include selling the firm at a good profit or go IPO at a right time, or exit the market you serve.

If you have more ideas to add or comments, please let me know. I love to learn from you too.

Comments/Input from others:

- Good Partner. Having a good partner is a must. It's really tough to do everything on your own. That's not running a business. That's self-employed! yes, many people have told me that good partner is hard to find.. thus, many gave up.. They dont trust any partner anymore! But how can anything progress without trust in business? We just have to be vigilant, have check & balance and lookout for good people.

- Auto-pilot. Build systems. I was reminded and remembered that i always challenge myself to auto-pilot my team or dept within the shortest amount of time, say 9 months. To achieve that, you need to develop systems, processes & procedure, simple guidelines or principles. Most people prefer to made the decision themselves. Maybe they like to feel like boss. Maybe they just like to make all the decisions! But that's not the way forward. I prefer to empower my staff and set boundaries and markers. They still come to me for urgent & important matters. But most will be handled by them.

Cheers!

Bootstrapping your business

An interesting book on 'Bootstrapping your business' by Greg Gianforte with Marcus Gibson.. though i dont agree with everything but it's thought provoking enough to give me new insights..

On page 27, Sales = True Needs + Budget + Authority to purchase from you.

Think of it, i actually did test RightNow software before! and must say theirs really not bad.. ;-)

Networking that works - 10 tips

ref: Straits Times pg R33.

1. Before attending an event, think that you are going to spend 3 hours of your precious there, unpaid.. so better make full use of your time there.

2. Enjoy the process/event and have some fun!

3. Walk in, hold yr head up, pull yr shoulders back & smile with confidence. Just tell yourself most people are as nervous as you are there.

4. You are decent & likeable person. Believe in yourself and your expertise.

5. Plan to speak to 3 new people and gain 3 new info abt them. Identify people u wanted to meet and make sure you walk to them and intro yourself.

6. Remember that everyone's there to network. So rejection will be minimum.

7. If u meet someone who's rude & unpleasant, just move away. Focus on pleasant & welcoming folks.

8. Be interested in people than be just interesting. Let others do most of the talking while u listen attentively. Get to know them.

9. Small talk - abt travel, sports, family or hobbies.. It's the foundation of relationships.

10. Ask for their business cards and seek permission to contact them a few days later. Write down on agreed date on back of the card. As soon as you get home, write down the useful info & be prepared for the vital follow up call.

What's franchising and licensing?

as part of my job i need to know about franchising and licensing.. in order to play the advisory role to my clients.. well, it's also good knowledge if i ever wanna run my own business..

what's franchising?
Today any business wanted to be called a franchise must comprises these 3 key elements:
(i) business/operation system (manual, guide, procedures,..),
(ii) brand (trademark, copyright, design,..),
(iii) royalty fee (upfront, annual, % of revenue,..)
otherwise also known as business format franchising.
example: MacDonald

what's licensing?
same as franchising except minus the business/operating system.
in the past (early days), it was known as product distribution franchising.
example: Coca-Cola bottling licensing

what's the difference between franchising and licensing?
as mentioned above, franchising includes imparting entire business model to the franchisee.
In addition, franchiser takes a more proactive role than licensing which is more passive. Being proactive means that the franchiser will be working much closely with the franchisee to ensure his success and making sure he is operating according to the operating manual. Licensor usually leaves the licensee alone as long as it doesnt breach any contract agreement.

What are the key items in a franchise?
There are 23 key items in a franchise that needs to be addressed or mentioned - with reference to the UFOC (Uniform Franchise Offering Circular).
1. Franchisor
2. Business experience
3. Litigation history
4. Bankruptcy
5. Initial franchise fee
6. Other fees
7. Initial investment
8. Business restrictions
9. Franchisee's obligations
10. Financing
11. Franchisor's obligations
12. Territory
13. Trademarks
14. Patents, copyrights & proprietary information
15. Participation
16. Product or service restrictions
17. Renewal, termination, transfers & dispute resolution
18. Celebrities
19. Earnings claims
20. Other units in the system
21. Financial statements
22. Agreements
23. Confirmation


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