Tag: business plan

 
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You are not running a business. You are copying grandma's hobby of making pies.

 

Like all grandmas, she had the hobby of making pies and we receive lots of them to make her happy. Like it or not, as grandkids, we are told to thank our grandma for the pie and tell her how wonderful is the pie, how we cannot resist finishing the last pie, which was the best.  Then we ends up having more pies, although we did not like the pies till today.

 

Grandma is a very senior, (and I hate to say “old”) with very limited mobility and almost no eyesight. She will challenge her ability to make more pies and send them to her grandkids because she believes she makes them happier.

 

I was invited to the introduction of a new product with the business owner, and I was told that it is better product that best serve my health and my life.

I was given a bottle to try and I am just curious.   I was told that it is a new product that is better than anything else for my health.  I was intrigued and as I start to ask simple questions to find a reason to try the sample.

 

After asking few questions, I found a very strong resistance to answer these simple questions. Then, I was framed as a consultant who is looking for new clients. Then, I was told to not impose my service. The fact is I am not a consultant and I am not shopping for new clients.    I wonder, if I should ask the business owner to simply search my name on google “Wael Badawy” to know who I am and what I do.

 

The product is introduced, as a combination of ingredients that I know, ingredients that I do not know, and ingredient that I may not heard about it.

This introduction triggered a flag, because I do not generally eat or drink what I do not know, in the absence of a strong motive, such as being ill.

 

THEN, the ingredients are very healthy and it has better fruits and vegetables that I do not know but I should consume for their valuable impact.

I am not sure what is missing here? But, my understanding is the consumers of  organic products like to know everything about their food. They do not like the unknown chemicals that may impact their health.  At this point, I saw the second flag, because I was judged again.

For me, rightly or wrongly, “organic” is good enough to justify its high price, but  “organic” or natural ingredients that I do not know to be better for my health, is not true.   Pure marijuana and marijuana’s leaves are organic and natural but they are dangerous and even though we need to know more details to understand its medicinal effect.   If I consume it, I will be addicted and most likely, I will end up in Jail but I am consuming an organic natural plant!!!

 

THEN, the product’s presentation explained the principle of consuming the full fruit/vegetable in a juice, against extracts.  In my mind, this principle is questionable with diverse arguments. As a matter of fact, having a full lime as a juice will change its flavor and texture with time because of oxidation, and it can turn to be poisoning or has a higher level of toxic.  On the other hand, I cannot consume the whole orange or the whole banana. I have to peal it first!!!

– Anyway, I will pass on this argument because I am not the expert in food but I know what I eat.

 

At this point, I started to ask questions to better understand who is the business owner, what is the value of the product and what is the quality of the product in order to have a level of confidence to try the product.

 

I asked about the size of the business, to feel comfort that there are others who trust this product and buy it.  I was looking for the customers’ WHY to compare it to mine, i.e. what are the reasons to buy this over-priced product. Oh, this product will cost 25x – 35x the price of a high quality 100% natural juice.

 

I asked about the plan to grow the business in the next three or five years. I asked about the vision of the owner to confirm the quality of the product, and there is someone stands behind the product.   All what I received is “3 and 5 years are very long time”.  In the absence of an answer, it demonstrates that there is no continuity and no guarantee to a quality control process.   i.e. two samples of the product with the same ingredient, will have different taste.

 

I asked about the value of the product? The question aimed to help me to find my WHY, and I can try the sample.   The articulated value is “You drink good natural stuff, so your body will perform better”.  There is no confirmation or reference other than the business owner has issues and it was solved by personally drinking this combination. There was no testimonial and no confirmation of the business owner story. So, I attempted to clarify and I asked, does it help with a diet plan? or release weight? or having high energy? etc.  The value was articulated as you eat better ingredients, you will be healthier and you feel good, with a proof.

I do not eat pizza and burger everyday and I eat apple and banana everyday. As it was said “One apple a day, keeps the doctor away!!!”

The articulated value is very general and I can have a blinder. I will use a mix of fruits and vegetables. AND, WOW, the juice will have the same value.

 

The answer continues to be “the ingredients used are planted by the owner in business owner’s garden and then picked and prepared to make the product!!!”

 

I asked about the science or the research behind this drink.  The answer is that the business owner has researched each of the known and unknown ingredients.  But, the business owner has two degrees (none of them are related to food, or health or technology or medicine). Yes, everyone may be impressed of these two degrees that have no relation to the business.

Moreover, the business owner has no passion to either degree and do not work with these degrees but the business owner offers this product to serve and help others.

The product looks professional with an expiry date to expire in two days!!! The product comes in a quantity of 1, 4 and 8 bottles.   I do not know the reason that of the expiry date given that there is no research or science behind the product to determine the impact of the three days instead of two.  I wonder If someone orders a pack of eight bottles, will he/her consome them all in two days. What about the logistics of producing, distributing and consuming a product that has to be kept cold (I assume) in two days?

It translates to a very limited number of customers with limited quantity orders, within a very small geographical area. So, the production, distribution and consumption in two days!!!.

 

I have to say that this is not a business, this is a grandma hobby to make pies, as:

1- The pies are initially FREE, till she asks for a favor in return, which will be fairly pricy.

2- The ingredients are from grandma apple tree in the backyard – Oh, by the way, the apple tree is very natural and very organic, because grandma is a senior and can not take care of the apple tree and no one fertilizes the tree.

3- Grandma believes that she makes her family happier by offering more pies. She consumes her effort, while her grandkids do not prefer to eat the pies, or do not eat them at all.

4- Grandma’s pies have to be eaten hot, and within one or two days.

5- No one knows the secret ingredient of the pies, even grandma herself does not.

6- Grandma pies taste differs from time to time. It is a function of the mood and the time in the oven, but grandma does not read the time.

7- Grandma serves only her family and close friends, which is a very limited consumer base.

 

The whole time, I was simply looking for a reason to try a sample of a new product.  I may feel lucky to put my hand on a free sample of this product. I was trying to find a reason for myself. I know grandma, but I do not know the business owner.   So please stop copying grandma hobby making pies and focus on building a business.

 

Note from the author: 

This is a true story and I held the name of the product and business confidential because I have the care and passion to every small business and entrepreneur in our community.   I strongly believe that the message within this post will help everyone in their business, So please let me know your thoughts below. 

 

I declare that I owe the business owner the price of the sample because I did not feel comfort to drink it, which is my fault AND now the sample expired!!!

 

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You are not running a business. You are copying grandma's hobby of making pies.

 

Like all grandmas, she had the hobby of making pies and we receive lots of them to make her happy. Like it or not, as grandkids, we are told to thank our grandma for the pie and tell her how wonderful is the pie, how we cannot resist finishing the last pie, which was the best.  Then we ends up having more pies, although we did not like the pies till today.

 

Grandma is a very senior, (and I hate to say “old”) with very limited mobility and almost no eyesight. She will challenge her ability to make more pies and send them to her grandkids because she believes she makes them happier.

 

I was invited to the introduction of a new product with the business owner, and I was told that it is better product that best serve my health and my life.

I was given a bottle to try and I am just curious.   I was told that it is a new product that is better than anything else for my health.  I was intrigued and as I start to ask simple questions to find a reason to try the sample.

 

After asking few questions, I found a very strong resistance to answer these simple questions. Then, I was framed as a consultant who is looking for new clients. Then, I was told to not impose my service. The fact is I am not a consultant and I am not shopping for new clients.    I wonder, if I should ask the business owner to simply search my name on google “Wael Badawy” to know who I am and what I do.

 

The product is introduced, as a combination of ingredients that I know, ingredients that I do not know, and ingredient that I may not heard about it.

This introduction triggered a flag, because I do not generally eat or drink what I do not know, in the absence of a strong motive, such as being ill.

 

THEN, the ingredients are very healthy and it has better fruits and vegetables that I do not know but I should consume for their valuable impact.

I am not sure what is missing here? But, my understanding is the consumers of  organic products like to know everything about their food. They do not like the unknown chemicals that may impact their health.  At this point, I saw the second flag, because I was judged again.

For me, rightly or wrongly, “organic” is good enough to justify its high price, but  “organic” or natural ingredients that I do not know to be better for my health, is not true.   Pure marijuana and marijuana’s leaves are organic and natural but they are dangerous and even though we need to know more details to understand its medicinal effect.   If I consume it, I will be addicted and most likely, I will end up in Jail but I am consuming an organic natural plant!!!

 

THEN, the product’s presentation explained the principle of consuming the full fruit/vegetable in a juice, against extracts.  In my mind, this principle is questionable with diverse arguments. As a matter of fact, having a full lime as a juice will change its flavor and texture with time because of oxidation, and it can turn to be poisoning or has a higher level of toxic.  On the other hand, I cannot consume the whole orange or the whole banana. I have to peal it first!!!

– Anyway, I will pass on this argument because I am not the expert in food but I know what I eat.

 

At this point, I started to ask questions to better understand who is the business owner, what is the value of the product and what is the quality of the product in order to have a level of confidence to try the product.

 

I asked about the size of the business, to feel comfort that there are others who trust this product and buy it.  I was looking for the customers’ WHY to compare it to mine, i.e. what are the reasons to buy this over-priced product. Oh, this product will cost 25x – 35x the price of a high quality 100% natural juice.

 

I asked about the plan to grow the business in the next three or five years. I asked about the vision of the owner to confirm the quality of the product, and there is someone stands behind the product.   All what I received is “3 and 5 years are very long time”.  In the absence of an answer, it demonstrates that there is no continuity and no guarantee to a quality control process.   i.e. two samples of the product with the same ingredient, will have different taste.

 

I asked about the value of the product? The question aimed to help me to find my WHY, and I can try the sample.   The articulated value is “You drink good natural stuff, so your body will perform better”.  There is no confirmation or reference other than the business owner has issues and it was solved by personally drinking this combination. There was no testimonial and no confirmation of the business owner story. So, I attempted to clarify and I asked, does it help with a diet plan? or release weight? or having high energy? etc.  The value was articulated as you eat better ingredients, you will be healthier and you feel good, with a proof.

I do not eat pizza and burger everyday and I eat apple and banana everyday. As it was said “One apple a day, keeps the doctor away!!!”

The articulated value is very general and I can have a blinder. I will use a mix of fruits and vegetables. AND, WOW, the juice will have the same value.

 

The answer continues to be “the ingredients used are planted by the owner in business owner’s garden and then picked and prepared to make the product!!!”

 

I asked about the science or the research behind this drink.  The answer is that the business owner has researched each of the known and unknown ingredients.  But, the business owner has two degrees (none of them are related to food, or health or technology or medicine). Yes, everyone may be impressed of these two degrees that have no relation to the business.

Moreover, the business owner has no passion to either degree and do not work with these degrees but the business owner offers this product to serve and help others.

The product looks professional with an expiry date to expire in two days!!! The product comes in a quantity of 1, 4 and 8 bottles.   I do not know the reason that of the expiry date given that there is no research or science behind the product to determine the impact of the three days instead of two.  I wonder If someone orders a pack of eight bottles, will he/her consome them all in two days. What about the logistics of producing, distributing and consuming a product that has to be kept cold (I assume) in two days?

It translates to a very limited number of customers with limited quantity orders, within a very small geographical area. So, the production, distribution and consumption in two days!!!.

 

I have to say that this is not a business, this is a grandma hobby to make pies, as:

1- The pies are initially FREE, till she asks for a favor in return, which will be fairly pricy.

2- The ingredients are from grandma apple tree in the backyard – Oh, by the way, the apple tree is very natural and very organic, because grandma is a senior and can not take care of the apple tree and no one fertilizes the tree.

3- Grandma believes that she makes her family happier by offering more pies. She consumes her effort, while her grandkids do not prefer to eat the pies, or do not eat them at all.

4- Grandma’s pies have to be eaten hot, and within one or two days.

5- No one knows the secret ingredient of the pies, even grandma herself does not.

6- Grandma pies taste differs from time to time. It is a function of the mood and the time in the oven, but grandma does not read the time.

7- Grandma serves only her family and close friends, which is a very limited consumer base.

 

The whole time, I was simply looking for a reason to try a sample of a new product.  I may feel lucky to put my hand on a free sample of this product. I was trying to find a reason for myself. I know grandma, but I do not know the business owner.   So please stop copying grandma hobby making pies and focus on building a business.

 

Note from the author: 

This is a true story and I held the name of the product and business confidential because I have the care and passion to every small business and entrepreneur in our community.   I strongly believe that the message within this post will help everyone in their business, So please let me know your thoughts below. 

 

I declare that I owe the business owner the price of the sample because I did not feel comfort to drink it, which is my fault AND now the sample expired!!!

 

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The Exit Strategies for Businesses

Many investors are only interested in investing money into an enterprise for a limited amount of time. They want to know when they will get their money back and what sort of return they will be receiving at that time. Both issues are closely linked. Therefore, when preparing your business plan, to pitch to potential investors, you will need to make sure that you have outlined your long term plans and a sound <b>exit strategy</b>.

In order to do this properly you will have to ask yourself a few questions about your own personal plans regarding the business. Do you wish to stay involved in this business in the long run, or are you more interested in getting it off the ground and letting someone else take over then? These are the kinds of questions you should deal with in your exit strategy.

You will also want to know a little about the <b>investors</b> you are pitching to and what their expectations are regarding the future of the investment:

<ul><li>If you are dealing with <b>venture capitalists</b> you have to be aware that they are looking for a <b>high return</b>. They will generally be expecting the business to go public at the end of the period or make some other high profit move. The period they are willing to invest is about three to seven years so you will need some sort of high return exit strategy at the end of that period. However, you should not opt for going public unless you are confident that it is a realistic goal for your company. Public offerings are very rare for small businesses and the investors you are speaking to will be all too aware of that fact.</li><li>If you are considering an <b>angel investor</b> then again they will be looking for a high return but will not be overly concerned with the type of exit strategy under consideration, as long as it seems sound. They will be less sophisticated than the venture capitalists or institutional investors you may deal with and are more likely to be involved because of a <b>personal relationship</b> to you or the business.</li></ul>

There are a number of exit strategies you can consider:

<ul><li>The most basic exit strategy would be to simply <b>bleed the business dry</b>. This can be done by giving yourself a huge salary or other remuneration, regardless of the performance of the business. While it is not appropriate in most cases, there is no doubt that it can get a lot of your investment back out of the company in a short time.</li><li>Another simple option is <b>liquidation</b>. Simply close the doors and wait for the company to be wound up. All debts will be paid off, and then whatever is left over will be clear to the shareholders.</li></ul>

While these two options above are quite practical and effective, they are professionally frowned upon and you may wish to propose a more sophisticated exit strategy if you wish to impress potential investors.

<ul><li>Another option could be <b>selling to a friendly buyer</b>. While you may have come to the end of your relationship with the business, there may be many people who would be saddened to see it end and may well be willing to step in to take over. This might include passing it on to another member of the family, or selling it to employees or customers. There are many businesses where this will be a realistic option, however it is difficult to predict it at the beginning of the venture.</li><li>Another option is <b>acquisition</b>. This is when a rival firm, usually one wishing to expand, agrees to buy you out. You can negotiate the price and terms with the buyer and there is a good chance that both of you can come up with a very <b>attractive price</b>. You will get a good price because together with your assets, the buyer will be willing to pay for good will, market share, client contacts etc. This means you can get a very good price for the business.</li><li>The <b>IPOs</b> that we previously talked about are the final option. These are potentially the most lucrative of all, but when reality kicks in, they might not seem like the dream you thought they were. In reality, a minuscule percent of companies manage to make it through an IPO. The process costs millions, includes lawyers, analysts, publicity agents and a lot of other costly professionals. The odds are against you ever making it. And if you do, you will probably be left with only a fraction share of the company you used to own.</li></ul>

More info’s and free registrations (restricted to pros), please join our live seminar

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Advertise, Advertise, Advertise

Many people sign up for affiliate programs with the hopes of making some serious money. They advertise a few places and then wait for the money to start pouring in. When it doesnít, they blame it on the program and quit.

I am convinced the only way to make money online is to have a consistent Advertising plan. A plan you are willing to work hard on and commit to for a selected period of time. When making this plan, you need to do two things. First, you should pick a few affiliate programs that are of interest to you. Second, you need to decide how long you want to work these programs. Once you decide on a time period (I recommend 6 months to a year), you must make a promise to yourself that you will not stop advertising until that time period is up. This is perhaps the most important factor in your success.

Next, you need to consider your advertising options: traffic exchanges, classified ads, e-mail campaigns, ezine articles, posting to forums or message boards, chatting with others who are interested in what you have to offer, and posting flyers around your town. Now you see the many possible advertising avenues you can choose from. I recommend doing all of them. It may sound like a lot of work, but when broken down into a plan, it is not.

One possible plan may look like this: Traffic Exchanges-1 hour per day. Post 15 classified ads per day. Make 5 posts to a message board or forum per day. Submit an article once per week to an ezine. Visit chat rooms and distribute flyers as you have extra time during the week. This all can be accomplished by spending 2-3 hours per day. You will be surprised how much you get done when you have a plan. You may also choose whether you will work 5 or 6 days per week. Make a checklist for each day of the week, and mark each task off as you finish it. That will keep you on focus, and will make you feel good that you are one step closer to reaching your goal.

Make a commitment to your new plan and donít get involved in any other programs until your current programs are making you money consistently. Donít give up. Sticking with this plan will significantly improve your success. Remember, Advertise, Advertise, Advertise.

More info’s and free registrations (restricted to  pros), please join our live seminar

 

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Exit Strategies for Businesses

Many investors are only interested in investing money into an enterprise for a limited amount of time. They want to know when they will get their money back and what sort of return they will be receiving at that time. Both issues are closely linked. Therefore, when preparing your business plan, to pitch to potential investors, you will need to make sure that you have outlined your long term plans and a sound <b>exit strategy</b>.

In order to do this properly you will have to ask yourself a few questions about your own personal plans regarding the business. Do you wish to stay involved in this business in the long run, or are you more interested in getting it off the ground and letting someone else take over then? These are the kinds of questions you should deal with in your exit strategy.

You will also want to know a little about the <b>investors</b> you are pitching to and what their expectations are regarding the future of the investment:

<ul><li>If you are dealing with <b>venture capitalists</b> you have to be aware that they are looking for a <b>high return</b>. They will generally be expecting the business to go public at the end of the period or make some other high profit move. The period they are willing to invest is about three to seven years so you will need some sort of high return exit strategy at the end of that period. However, you should not opt for going public unless you are confident that it is a realistic goal for your company. Public offerings are very rare for small businesses and the investors you are speaking to will be all too aware of that fact.</li><li>If you are considering an <b>angel investor</b> then again they will be looking for a high return but will not be overly concerned with the type of exit strategy under consideration, as long as it seems sound. They will be less sophisticated than the venture capitalists or institutional investors you may deal with and are more likely to be involved because of a <b>personal relationship</b> to you or the business.</li></ul>

There are a number of exit strategies you can consider:

<ul><li>The most basic exit strategy would be to simply <b>bleed the business dry</b>. This can be done by giving yourself a huge salary or other remuneration, regardless of the performance of the business. While it is not appropriate in most cases, there is no doubt that it can get a lot of your investment back out of the company in a short time.</li><li>Another simple option is <b>liquidation</b>. Simply close the doors and wait for the company to be wound up. All debts will be paid off, and then whatever is left over will be clear to the shareholders.</li></ul>

While these two options above are quite practical and effective, they are professionally frowned upon and you may wish to propose a more sophisticated exit strategy if you wish to impress potential investors.

<ul><li>Another option could be <b>selling to a friendly buyer</b>. While you may have come to the end of your relationship with the business, there may be many people who would be saddened to see it end and may well be willing to step in to take over. This might include passing it on to another member of the family, or selling it to employees or customers. There are many businesses where this will be a realistic option, however it is difficult to predict it at the beginning of the venture.</li><li>Another option is <b>acquisition</b>. This is when a rival firm, usually one wishing to expand, agrees to buy you out. You can negotiate the price and terms with the buyer and there is a good chance that both of you can come up with a very <b>attractive price</b>. You will get a good price because together with your assets, the buyer will be willing to pay for good will, market share, client contacts etc. This means you can get a very good price for the business.</li><li>The <b>IPOs</b> that we previously talked about are the final option. These are potentially the most lucrative of all, but when reality kicks in, they might not seem like the dream you thought they were. In reality, a minuscule percent of companies manage to make it through an IPO. The process costs millions, includes lawyers, analysts, publicity agents and a lot of other costly professionals. The odds are against you ever making it. And if you do, you will probably be left with only a fraction share of the company you used to own.</li></ul>

More info’s and free registrations (restricted to pros), please join our live seminar