Questions You Need To Answer Before Starting a Business. Presented by Burt Wallerstein

Transcription

1 Questions You Need To Answer Before Starting a Business Presented by Burt Wallerstein

2 Defining Your Business Model 1. What product or service are you selling? 2. Who s your target customer? 3. What customer challenge do you solve? What needs or wants do you serve? 4. What value (customer benefits) do you deliver? 5. How will you reach, acquire and keep customers? 6. How will you define and differentiate your offerings? What makes you special, different or better? 7. How and when will you generate revenue? 8. What is your cost structure? Your pricing strategy? 9. What is your profit margin?

3 Defining Your Brand Objectives 10. What are you branding? 11. What will your brand stand for or represent? 12. What unique benefits will your brand communicate? 13. What emotional connection will you be trying to establish? 14. What lasting impression would you like to make? 15. What image would you like to project?

4 Who s Going To Do What?

5 Glossary Agent: A person or business authorized to act on another s behalf (salesman, distributor, attorney, etc.) Brand: A name, term, design, logo, symbol or other feature that defines one seller s goods or services as distinct from another seller s. (A promise that must be reinforced every time people come into contact with any facet of an organization.) Brand Objectives: The distinguishing elements of a product or service created to differentiate or distinguish it from other brands. (Brand objectives are typically designed to create an emotional or intellectual connection or experience with a brand. Brand strategy is a closely related term.) Business Concept: An idea for a business that includes basic information about the target market and unique selling proposition that gives the business an advantage over competition. Business Model: An organized description of the key elements of how a business will create, deliver and capture value. Basically, it describes how your business will make money. Business to Business, or B2B: Transactions between businesses, rather than between businesses and consumers, such as those between a manufacturer and a wholesaler or between a consultant and a client company.

6 Competitive Advantage: An advantage or advantages (points of difference) that a business has over competitors that will (hopefully) help it generate greater sales or profit margins and or retain more customers, compared with its competitors. Cost Structure: The expenses that a company must account for when manufacturing and selling a product or producing and delivering a service. CRM-Customer Relations Management: A model for managing a company s interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support. Demographics: The population characteristics that companies and their marketers must consider in developing their business models and marketing strategies, including age, race, gender, economic status, educational attainment, employment, life style, etc. Entrepreneur: An individual who identifies business opportunities, allocates resources and tries to create value (make money) by defining/managing operational, branding, marketing and/or competitive strategies. Entrepreneurship: The quality or characteristic of taking business risks to create value for a company or business, either as a business owner or manager Gross Margin (or gross profit): A company s revenue minus its cost of goods sold or variable cost of delivering its services. It describes the percent of total revenue the company retains after incurring the direct costs associating with producing and delivering the products and services it sells. It excludes the fixed costs or overhead a company incurs in operating/maintaining its business, independent of its sales volume.

7 Innovator: An individual who introduces new ideas, products/services or methods that significantly change a business or industry s operations or ways of doing business. Licensing: Renting or leasing an intangible asset, such as a brand or the name or identity of a sports or entertainment star, as a means of identifying or branding its products or services. Marketing: An umbrella term for the activity of promoting and selling a company s or individual s products and services; it covers advertising, market research, public relations, sales, etc. and the communications tools used to create and build identity, awareness, credibility and purchase interest in target markets. Branding is often considered the company s main business philosophy, while marketing is considered an instrument of its branding philosophy. Net profit, also known as the bottom line : Gross profit minus fixed and all other expenses, the amount a business has left over, to save, repay to lenders, reinvest in the business or distribute excess cash to owners, shareholders, key employees, etc.. Niche: An opportunity for a business to offer a product or service that is not offered by other businesses, or to identify a target market or market segment that is not being served by other companies. Opportunity Cost: The cost of foregoing an opportunity in order to pursue another course or action. Outsourcing: The process of contracting a basic business function or operation to another individual or business. (The term does not usually cover contracting professional services to lawyers or accountants.)

8 Product Development: The process of improving an existing product or developing new products or types of products. Profit Margin: The amount by which a company s revenues exceed all costs (direct and fixed), a ratio of profitability calculated as net income divided by revenues or net profits divided by sales. Strategic Alliance: An arrangement between two companies to share resources or opportunities to undertake a specific, mutually beneficial project. Each company retains its own autonomy while benefitting from new opportunities. Supply Chain: The various operational stages of bringing a product from the product design phase to the point of sale (retail shelf or shipping center.) Depending on the product and where it is produced, these may include manufacturing and production, packaging and labeling, shipping, customs services, warehousing and inventory control, and re-shipping. Wholesaler: An intermediary in the product distribution chain who buys in bulk and sells to resellers rather than to consumers. (Distributors provide a similar function, but their services may be more complex.)