After working with many clients, I’ve decided there are Five Big M’s of Business that every entrepreneur should know like the back of their hand:
M is for Market
Although people joke around about having the skills to sell snow to Eskimos, a sustainable long-term business must be built upon a foundation of a product or service that people desire to purchase to fulfill a want or need. Without a real market, any for-profit enterprise is doomed to fail.
Most markets exist around a problem that needs to be solved. Even companies that produce extremely high-end luxury goods such as hand-crafted watches and huge yachts are solving a problem for an elite group of people, as these firms focus the SES differential issue (e.g. status symbols are used to display privilege, power, wealth). Also, markets change as better ‘answers’ are discovered. For example, the travel industry has drastically changed over the past 150 years. For most of civilization, horses, mules, and camels were the best option for long distant journeys. Then, the technological breakthrough of the train changed that forever. Although trains replaced horses, planes or cars are now the standard solution for most Americans. Problems are rarely solved once. Instead, markets are evolving systems that always seek better, faster, and cheaper.
If you want to dominate your market, offer a solution in unique way that offers significantly more benefits to your customer than any other competitor.
M is for Model
A business model is often very simple to understand on the general level; however, often complex to execute day-to-day. A business model is the basic schema of how a company will generate revenue. For example, a brick and mortar shoe store sells shoes to customers at one location at a certain margin and this traditional retail model the is how the profit is produced.
A business model is what many start-up internet firms lacked at the turn of the century, so when the venture capital dried-up after the implosion of the stock market bubble in 2000, many failed.
If you cannot articulate the ways you or your company makes money, then it is very likely the model is weak or is missing. The stronger the model, the more likely a business is to succeed.
M is for Management
Warren Buffet, the uber-investor and billioniare, is known for only purchasing companies that have good fundamentals and are priced at a discount; however, one of his main ‘soft’ criteria is also a firm with an excellent upper management team. He knows that the leaders can crash a company sooner than the market if they do not have the right skills.
Every enterprise, from the US Government to the smallest one-man company, needs the best management possible for their size and scope. As a firm increases in size and complexity, the management needs to expand their skillset as well, and this is sometimes a weak spot for start-up firms that succeed and have rapid growth, the founder is not always ready for the next level.
Business growth is often either augmented or limited by the ability of the management.
M is for Mantra
What is a business mantra? It is a concise or intriguing description of your individual, team, or organization mission. Some call this an elevator speech. Crafting one has two main benefits:
1) You can explain what you do to others, especially potential clients, very quickly.
2) It helps one clarify the main essence of one’s position.
Albert Einstein once said: “Make everything as simple as possible, but not simpler.” This is true for a mantra as well, plus it should also be short. The rule of thumb is that it should take less than 30 seconds to share it with a complete stranger. It should only be an overview of your core competency, not a quick grocery list. My first mantra was that I help people get twice the juice from half the fruit. When people inquired for more information, which is normally the case, I could explain more fully that I am a business coach whom assists entrepreneurs double their profits while reducing their own hours in half via a 4X strategy. What is your Business Mantra?
M is for Marketing
Marketing is the final piece. Ralph Waldo Emerson once wrote “build a better mousetrap and the world will beat a path to your door.” Maybe! It would be contingent if the world knew it existed and many considered the purchase worthwhile. Enter the marketer.
Marketing is a creative communication process where the benefits of a product or service are explained to potential customers. Without marketing, there are very few sales, as the 21st century is a wide-bazaar of diversity that contain many vocal competitors offering similar products and services.
With superior marketing, an average business can be rapidly transformed into an extraordinary enterprise with high margins.