Business Model

Making a Case for Your New Business

Making a Case for Your New Business
 

Creating a business case prior to actually starting a business may help prevent a disastrous venture doomed to failure. All of us are prone to falling in love with an idea and thinking that the world will embrace it. It won’t. Too often businesses are built on wishful thinking. Instead, an idea for a business must be examined and tested for validity.

Here are the steps that need to be taken:

Crunch the numbers of your idea

Develop a forecast showing your best and worst scenarios.
When will you break even?
Develop a cash flow projection. Will there be adequate financing to pay for it all?
Develop individual projections for various pricing environments.
Develop individual projections for each competitive reaction.

 

Examine user needs

Ask prospective customers   whether they like, want and need your business. Will they receive value and benefits from your offerings? This step is often skipped because we think we know best. The goal is to hear from customers what they want, need and will be delighted by.

 You need to answer the following questions:

How are the prospects currently solving their problem?
What problems are left unsolved?
Where […]

Unique Core Differentiators

Perception is the reality-people buy based on differences They Perceive. It’s the differences that potential customers perceive that make them choose one business over another. And those differences make the customer feel more confident about their final decision as well.

Unique Core Differentiators (UCDs) clearly articulate what makes your business different. They are the special things about your product or service or business that compels customers to buy from you rather than your competitors. Well-formed differentiators target your customer’s ‘hot buttons,’ real buying concerns, or key frustrations. In one statement it educates them about exactly why they should buy from you.

Selling Solutions – Not Products

 

The best sales people are ‘canned’. They know better than to wing it through a prospect meeting. They have a systemized sales process to work with. And the most effective system is relationship selling – selling based on getting to know a customer’s real needs and fitting your product to them.

Relationship selling doesn’t involve high pressure or manipulative methods. The salesperson here is a problem solver, a helper, and an advisor to the customer. They learn to identify the customer’s needs and sell them a solution that fits the need – not just a product. It moves the emphasis from price to value as a differentiator and provides a powerful advantage over competitors.

Do you know…

How to use objections to further the sales process

How to prepare a sales pitch so that saying ‘yes’ is the next natural thing to do

How to build relationships so strong that your clients won’t think of going anywhere else

Features And Benefits

Your customers are generally only interested in product features that translate into benefits. So, whether you’re developing a new product or exploring a way to repackage an old one, it is important to think clearly about the benefits you provide. Product features are not important in themselves. Great as a product may be, customers won’t love it for its own sake. They’ll only love it for the benefits it provides.

Developing An Extraordinary Guarantee

Guarantees, and especially those that are in some way even better than ‘money back’, are a proven way to attract prospects. But how to develop such a guarantee?

The best thinking on the issue of developing guarantees now involves using the concept of ‘risk reversal’.   There is no better way to change the perceived benefit of a product or service than to offer an ‘extraordinary guarantee’ that switches the risk of making a wrong choice from the buyer to the seller – risk reversal. In effect a risk reversal guarantee inspires the prospects trust by announcing: “I’m so confident in our products, services and business that I’m prepared to put my own money where my mouth is and make it impossible for you to lose out on this transaction.”

By knowing what the customer really wants, and then making it clear that they will get the result they’re after from this deal or else the seller shoulders the consequences, makes their buying decision so much easier.   And that’s what offering an extraordinary guarantee can do.

Weak Business Model

Most small business owners never question the validity of their business model. Is it a successful model? Does it make sense? Will it make money? Yet your business model is your foundation. It does 2 things

It explains to all who ask how your business provides value to its target market. How do you make their life easier, happier, richer and more successful? Why do your customers come to you because … you have a convenient location, there is easy parking, your after sales service is good, you recognize and greet all your customers, you have a unique understanding of their business, your product/service is the best value for money, no one else can supply it and so on
It demonstrates why your business will be financially successful. Do you have lower costs than your competitors, and if so, why? Is it because you are skilled at producing your products more efficiently? Do you have a source of raw materials that others pay more for? Can you command a price premium, and if so, why? Is it because your service is so exceptional that […]