Archive for March, 2011

March 23, 2011

The “E” in IDEAL

“E” is for Economics – all of the numbers in your business. Prices, costs, expenses, size of market, potential sales, number of repeats, number of returns, demand … anything that relates to your business’s products and services. You should know your numbers, particularly what it costs you to be in business. Too many business owners I’ve read or heard about, are former owners because they didn’t realize the size of some of their numbers.

As a business owner, you should not delegate the knowledge of these numbers to someone else, like your accountant or your marketing director. You should know where you stand.

The “E” also includes economics from the customer perspective, too. What’s the value to the customer, to buy your products or services? What’s the magnitude of financial benefit your products bring to your customer, in terms of saving time, saving money, or some other measure?

March 18, 2011

The “D” in IDEAL

“D” represents “Differentiation”, in the IDEAL business model. Whatever you’re offering, whether they’re tangible products or services, needs to be different from whatever your competitors are offering. If you offer things that are largely the same, or what we call “me too” products, potential customers would more likely stick with competitors who have been around longer and who already have a track record.

Of course, if the competitor’s track record is a lousy one, you could offer the same offering and perhaps get away with it. But even then, since you’re an untested supplier of that product or service, you run the risk of the customer thinking that you might be no different than the lousy competitor.

So make something different: your offering¬†needs to allow the customer to be better, faster, more productive, more relaxed, prettier, younger, stronger, slimmer, smarter, funnier, or whatever, than your competitors can do. Without this differentiation (the “D”), you’ll be viewed the same as the others, with no compelling reason to give you a try.

March 9, 2011

The “I” in IDEAL

I previously mentioned my concept of the “ideal” business model, with each letter of the word IDEAL signifying a quality that the business needs to have. In that vein, let’s talk about the “I”, which stands for Initiative.

I’ve met some people who think that entrepreneurship and starting a business is only about coming up with the idea. These folks think that just because they thought up a particular idea for something, they’re an entrepreneur. Never mind that they never did anything about the idea, they’re still an entrepreneurial thinker.

Then there are other folks who think that starting a business is about coming up with the idea, then applying not much more than positive thinking. Somehow, if they “want” it enough, or visualize it often enough, it’s magically going to happen.

If you look at Merriam-Webster’s definition of the word “initiative”, you’ll see that it means “the energy or aptitude displayed in initiation of action”. And that’s the key word … action. You can think up all the ideas you want, visualize all you want, want it all you want, but if you don’t have initiative to¬†take cohesive action, you’ll just want, you won’t have.

That’s the brief story of the “I”.