Tuesday, December 24, 2013

Paul Brown - What is the Customer Need?

Paul B. Brown
Paul B. Brown, Contributor
I write on the best way to prepare for the future -- by creating it.
ENTREPRENEURS 
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9/15/2013 @ 7:00AM |6,104 views

To Create A Successful Product, Don't Start With A Blank Piece Of Paper -- Start With A Customer Need

Mousetrap With Money Royalty Free Stock Images - Image: 24414439It’s tempting when you are just beginning to look for ideas to start with a blank piece of paper.
Don’t.
Begin by searching for places where you can solve a problem or improve an existing idea.  You always want to start by completely solving a market need, which is just a fancier way of saying you want to come up with a better mousetrap.  Notice the way that is worded. A better mousetrap.  The assumption is the concept of a mousetrap already exists.
For a lot of people the idea of starting with a customer need is counter-intuitive. They ask: “Shouldn’t you begin by coming up with a terrific idea, ideallly one that is unique?”
The answer is no. Let’ spend a minute on why.
First, I have absolutely no doubt that if you took off the shackles on your imagination, you could think up literally dozens of concepts for terrific products or services within five minutes.  Cups and plates that get themselves off the kitchen table and into the dishwasher; robots that are masters of Excel spreadsheets and the like.
Creativity is wonderful. But creativity that isn’t linked to making money is just a hobby. It isn’t a viable business concept.  And the reason you are trying to come with a new idea is, ultimately, to make money.
And that leads us to point two. Starting with a new idea is remarkably inefficient because you can’t do much with most of those wonderful ideas.  Some are not yet feasible. (We don’t know yet how to get those dishes to enter the dishwasher on their own.) And others are going to take much more money than you can easily lay your hands on. (The cost of buidling robots who can master Excel is beyond the resources of most of  us.)
Problem three, if you start with a blank piece of paper, once you end up with your new idea you have to go and search for people who may need it.  That is costly and time consuming.
All this explains why you don’t want to start with a new idea.  You want to begin by trying to solve an existing need.
There are three specific reasons why.
For one thing, you won’t have to spend a lot of time explaining what you have. The Polaroid camera was eventually a huge success.  But it took a while. They needed to educate the market.  Everyone knew what a camera was, and they could imagine a better one (one that took sharper pictures; or was easier to focus, or whatever.)  But trying to sell a camera that developed its own film took a lot of explaining. People needed to understand what it was and be convinced that it actually worked. If they have a need, there isn’t a lot of explaining to do.  Your pitch? You have a need for a product/service that does X? Here it is.
For another, you have a ready-made market.  You are creating a product or service for people who have told you they need it. There is not a whole lot of time wasted looking for customers.
And finally, you can move substantially faster.  The scope of what you are trying to do is remarkably clear. You are trying to solve a specific need. Everything else is irrelevant.
The takeaway: Make your life dramatically easier. Start with trying to solve a customer need, not with a new idea.

Paul Brown - 23 Things every Entrepreneur MUST Know

Paul B. Brown
Paul B. Brown, Contributor
I write on the best way to prepare for the future -- by creating it.

ENTREPRENEURS 
|
 
9/22/2013 @ 7:01AM |128,870 views

23 Things Every Entrepreneur Must Know


Paul Brown - Forbes Magazine
Knowledge Stock Photography - Image: 29854402A buddy of mine is a big-deal business professor at an even bigger deal university.  And for reasons I still don’t understand, he asked me to come in and explain to his graduate students what I have learned from spending 30 years talking to, researching and writing about entrepreneurs.
Here’s what I said.
1. The best way to predict the future is to create it.
2. The most important decision you can make iswhere do you want to spend your time. You only have so much time, energy and ability to focus. That means, as much as you would like to, you can’t do everything. That’s a given. So is this: The places which receive your full attention will do better than the places that won’t. What follows from that is this: You need to make hard choices about what you will do–and what you won’t. And it is really is the important decision you can make, because everything else you do will flow from it…including the next point.
3. If you want to be a successful entrepreneur, there is no such thing as work-life balance.  I am not advocating that you spend a disproportionate part of your life working on your company.  (I am also not advocating against it.) I am simply reporting that is what the most successful entrepreneurs do. I have never found an exception.
4. The best entrepreneurs don’t come up with great ideas, they solve market needs. You and I can come up with wonderful ideas all day long but unless they satisfy a large enough need, one that can support a business, they don’t do anyone any good.
5. The one thing all successful entrepreneurs have in common is the desire to make their idea a reality. What entrepreneurs need most of all—above motivation, focus, hope, financing, marketing skills, a brilliant idea, etc.—is the will to bring their idea into existance. Unless you truly want to make something happen, the odds are nothing will. Without that desire, nothing else matters…or occurs. Your life will be filled in other ways.


6. Action trumps everything.  Stop thinking and get underway.
7. Take small, smart steps towards your goals.  Contrary to the popular press, the most successful entrepreneurs are not swing-for-the-fences, bet-everything-on-one-roll-of-the-dice  types.  They are extremely conservative. They take a small step toward their goal; pause to see what they have learned from taking that small step and build that learning into the next small step. Then they pause to see what they have learned from that second small step, build that learning in and then take another small step and so forth. They don’t take large risks.
8. If you want to build a successful companygive up control. You can try to micromanage but: the business will never grow bigger than one person (you, the CEO) can handle effectively; the company won’t be able to move very quickly. Since everything will have to flow through you, you will create a bottleneck; you won’t get the best ideas out of your people.  Once they understand the company is set up so everything revolves around you, people are not going to take the time to develop their best ideas. “Why should I,” they’ll ask. “He is just going to do what he wants anyway.” And it’s exhausting.
9. Forget about working on your weaknesses, play to your strengths.  This is what will make you successful in the long-run.
10. You need to be able to turn every obstacle into an asset. Yes, every single one.
12. Here’s the only market research you need: Get your product out in the marketplace and see if it sells.
13. If you insist on doing market research anyway, here’s the one question you need to ask. Show potential customers a prototype, or describe the service you are thinking of offering and then say: ”Is this something you would buy,” and if they answer yes, ask for the order then and there. If, as the cliché goes, they are willing to put their money where their mouth is, you are probably on to something. If they aren’t, you still have work to do.
14. You must figure out how you are going to collect what you are owed.  Nobody thinks about this before they get underway and suddenly they learn first hand what they phrase “cash flow crunch” means.
15. As much as you are going to fight it you need a (really smart) advisory board.  You want a board to: give you new perspectives and ideas; to give you people to talk to and to provide honest feedback.
16. If you want to get more done faster and better…create checklistsChecklists are a wonderful way to make sure you don’t overlook anything, and that it is true whether we are talking about the best way to treat someone in the emergency room or if you are about to make a big presentation to a client you really want to land.
17. How to motivate yourself and stay motivated. Starting anything new is hard and the number of obstacles you are going to encounter can easily get overwhelming. Click on the link here for proven ideas that can keep you going.
18. If the dogs don’t like the dog food it’s bad dog food.  You don’t determine what a good product is. Only your customer does.  And if they don’t like your product, it’s a bad product. Period. In others words, the customer is always right. Darn it.
19. If the customer doesn’t like the product, there isn’t much you can do about it with pricing or promotion or positioning. Unpopular products are going to remain so. It is better to come up with a different version, than to keep trying to sell–at a discounted price–the one people don’t like.
20.  If you are going to fail, and sometimes you will, fail quickly and cheaply.  Always take small steps toward your goal and pause after each one to make sure you are staying on the right track.
21. (Really) Learn from your mistakes.  You are going to make mistakes. That’s a) a given and b) okay, providing you truly understand what went wrong.


22. Creativity and innovation must be linked to a business objective. Creativity is wonderful. But creativity that isn’t tied to making money is just a hobby. It isn’t a viable business concept.
23. Get out while you still have your marbles.You never want to stay too long at the fair, even if you own the fair.

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Tuesday, December 3, 2013

2013 Ends on a High Note

2013 Ends on a High Note 

After a year of uncertainty and cost-cutting, the small business economy is finishing strong.
 
The holidays will be filled with plenty of Oscar-worthy films, but I suspect the best surprise ending will take place on Main Street.
The trajectory for local Main Street businesses, those with usually only a few employees, is beginning to look like a classic underdog story in 2013. With everything going against them--government inaction, uncertainty over health care, payroll tax increases, sluggish demand--they’ve found a way to persevere.
Now they appear to have a shot at a second victory.
Going into 2013, our small business clients told us their primary goal was to cut costs to increase profitability. Now according to our November 2013 SurePayroll Small Business Scorecard®, 55 percent are offering holiday bonuses, up from just 38 percent last November. Eighty percent of those bonuses will remain the same or larger than last year.
It’s a significant turnaround and an indication that they’ve continued to generate revenue in the face of uncertainty by finding a way to grow without hiring.
Speaking of which, hiring for the year is slightly down--at 1.7 percent--and the average paycheck is flat, meaning small businesses have been able to grow revenue without spending more on either new or existing employees.
Optimism is up to 63 percent from 57 percent at the beginning of the year, and Main Street businesses are reflecting their increased optimism and cash flow with an increased amount of year-end bonuses. They’re spending the extra cash on their employees, which should put more money on Main Street this season.
For all they’ve endured, small businesses with 10 or less employees have somehow found ways to generate consistent performance.
IMAGE: DANIEL LITTLEWOOD/FLICKR
LAST UPDATED: DEC 3, 2013
MICHAEL ALTER is president of SurePayroll, America’s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University.
@michaelalter