During consulting or in between training sessions, people have shared their desires to one day start their own venture, a business that would bring them out of being salaried. The desire stems from being their own bosses and they are ready to do whatever it takes, any number of hours that needs to be put in.
A survey that was conducted sometime back states that a mere 30 percent of the businesses survive in five years since its inception. The failure percentage rises as the number of years passes. This is a disturbing trend. So, why do businesses fail?
It is seen that businesses generally fail as they fail to keep the five factors of a business in balance and in check.
So what does it take to make a successful businessman?
1. Create Value - A successful businessman must ensure that he creates value to the customer as long as he is in business. When he stops doing it, his business takes him down to the depths of abyss.
What is value? Anything that the customer will perceive as worthy to pay a price for. For example, a trainer can provide value by training students to become successful in their respective fields. A carpenter can provide value by building wardrobes for his customers.
If you are somebody who can create value to somebody other than you, your family and friends, you have the potential to become a businessman.
I am really good at playing snooker. I have a talent that is only good to me. I cannot use it to create value for others, unless I decide to start a snooker training session. But, what is the demand for such a training session? This is the line of reasoning one must take before deciding to venture into business. In short, you need to have the right kind of talent that customers are able to perceive as valuable.
2. Ability to Market - Right, you have a skill that adds value to customers. Now tell the world about it and create a void in their life, a null space that can be filled only by you – the value you have created.
A good businessman creates a demand for the value that he has created if it does not have one already. And, he starts bridging the gap between the requirements and the product or service that is on offer.
If I have to start a blog such as this one, and don’t tell the world about it, whatever I write on it will stay between me and the blog. I am not marketing the content that I am creating which could potentially be helping out management practitioners and management students such as you.
Ability to market makes or breaks the value that is being created or developed. If you are creating a new market space, it is the businessman (wearing the hat of a marketer) who needs to create demand among customers, tell them what they are missing and pitch for your service or product.
In the beginning we had desktops, and then came mobility in the form of laptops. Consumers were happy with the two. If they wanted a computer to sit in an office or home, they went for desktops and if they wanted to carry their computers around with them, they opted for laptops. And then in 2010, a new type of computer came into vogue called as the tablets, from Apple – iPad. iPads were smaller than laptops and the marketers told consumers that it was ultra mobile, and they could carry it in their back pockets if they wanted to. They told stories to consumers of this tablet that could do wonders for them on the fly. Marketers created a new demand for iPad and the product was a big hit.
Do you think Apple’s iPad was an invention that just tilted the computing scales? Not really. Tablets have existed much before Apple brought iPads out. Microsoft, Google and other European countries had created the early generations of tablet PCs and had launched it in the market as well. Their inability to create a demand for it took their business downward while Steve Jobs was successful in telling consumers that they need to opt for the smallest form of a computer, and brought forth the various things it can achieve and the style statement it was.
3. Ability to Sell - You have created a product or service of value, and have worked extensively to market it to your potential customers. Now a successful businessman must set the cash registers ringing to bring in the fruits of the first two steps.
I recently went to the Fujitsu website to check out some laptops and was impressed by one configuration in particular. I wanted to purchase it but the webpage didn’t seem to have the BUY NOW button on your face like some of the other e-commerce websites do. I had to search around, and finally found it by employing Ctrl+F. They apparently didn’t sell the products directly to consumers, so they asked me to check out the reseller in my area. The entire process of locating the reseller was extremely non-user-friendly, and it made me a frustrated potential consumer. Long story short, I didn’t end up buying the product as it didn’t fit my budget. The time I expended would’ve been saved if the Fujitsu website had posted the price of the product. Once again, not ideal for customers. It is as-is difficult to find paying customers, and when somebody like me was ready with my credit cards laid out on my table, the sales team should have been ready to pocket me in. Instead, they were laid back with a website that was able to market but not sell the product.
Ability to sell products or services will include all the things that Fujitsu did not do. You need to give multiple avenues for customers to transact – credit cards, net banking, checks, paying cash during the time of delivery among other proven payment schemes. Make it easy for them to finish the process – hasslefree. Get the money while you can, and don’t leave it to next time. Half the customers will not return if your payment scheme involves somebody getting back to them to instruct them on the process of payment. Get a shopping cart in place and do the sale quickly. Amazons and Ebays have nailed it, and others just need to follow what is being done with the giants.
Similarly if you own a store or work as a freelancer, make sure you are open to your customers by quickly making the sale. One of my acquaintances who is a freelance consultant carries a GPRS enabled credit card machine to avoid telling his customers that he cannot accept cards, even if it means paying a surcharge on the sale he makes.
4. Deliver as Promised - As a businessman, you have checked the first three of your list by creating value, marketing it and selling your product or services. Once you complete sales, you need to keep up your part of the bargain, you need to deliver.
Your product or service will have a number of features attached it, and you as a marketer would have taken care of telling the customer everything that it can do, including the warranty details. You would have promised the customer when he would be receiving the product/service. Whatever you promised to the customer, you need to deliver, and this puts you on the path to becoming a successful businessman.
Let’s say you create your own line of smartphones to compete with Apple iPhones and Samsung Galaxies. You market and sell the product extensively across the globe. But, you are not prepared for what is coming onto your laps now. The demand has exceeded supply. Your delivery is at stake. You will lose the beginner’s charm with your customers if you delay the orders, this is not the right footing to start a fight against Apple and Samsung.
Let’s say you addressed demand and supply. But, your product does not do a few things that you claim it does. You are staring at legal cases being hit against your company. Watch out! Whatever you market and whatever you put on the box, do it only if your product conforms to it.
The scenario I provided here is to bring out the significance of delivery in a business. Without a well established delivery process in place, a business will not survive and your dream to be a successful businessman will remain a dream.
5. Capital and Operating Finances - This is the ABCD of business, I should’ve probably mentioned this up first. Well, you need capital to start out any business and more money to run the business until it can sustain itself. There is no business without capital at least. You can perhaps find investors to fund your project but if you are going to own a part of the business at least, you need to put up some money or in some cases value creation formula can be exchanged for a stake in the company. Whatever you put in, make sure you own some part of the business.
The reason why I mentioned finances as the final item – you will first have to conceptualize the product or service that will bring in the value for the customer, brainstorm whether the service or product is marketable and deliverable, and then if you are satisfied, go in and put the moolah to reap the benefits of starting a business with a proper framework in place.
If you do not have an idea that can create value, market, sell and deliver it, find somebody who can. Put in the capital once you are confident that the value creation and the rest of the lifecycle elements are solid. To become a successful businessman, money alone is sufficient. But, you need to put your money on the right horse. For that, you need to know how to sniff.
To become a successful businessman, you need to have at least one of the five qualities that I mentioned above in place. More the qualities, better are your chances.
If you are a talented individual who can create value on your own, bring in people who can market, sell, deliver and fund your project. Likewise, if you are a talented salesman, get in on businesses that can thrive, get your stake and start on selling.
It is rare that a single person would be blessed with all the five qualities. I know that I am good at creating value and ensuring delivery is as promised. The rest of the three qualities are not my forte. I can do it, but if I need to be a successful businessman, I need to leave the three to people who can do it the best, especially the finances one.