Look Like a Winner – Developing Business Savvy

Many inventors that fall by the wayside have great ideas but they fail to gain the trust of the people they need to help them. One major factor in why they lose that trust is that they don’t show they have enough business savvy for others to trust them to deliver.

This is not because the inventor’s intentions are bad, but because they don’t show they have the experience to understand the task in front of them or to execute the tasks once they understand what to do. But that doesn’t mean inventors are doomed, it just means that they need to take a little bit of time to bring themselves up to speed on the market and the process of introducing a product so they look like a winner. You will make a much better presentation if you follow these steps before going out to talk to people in the market.

Important Tip : Don’t ever say that you have a “can’t miss” idea, a “blockbuster” idea, or that you have a product that is sure to be taken by Wal-Mart. Instead just say that you have an interesting idea that you believe has market potential. Telling people you have a “can’t miss” idea will only convince new product experts that you are a rookie with no idea of what you’re doing. All ideas can miss and most new product experts talk to five to 20 people a month with a “can’t miss” concept, 99 percent of which do miss.

Step 1: Do a professional information sheet on your product.

Include these items and a picture of your prototype or a drawing if possible.

Brief product description. Why you developed the idea. Target customer: be specific about the target customer, don’t say everyone. For example if you have a kitchen item, you might be tempted to say everyone, but that is not nearly as effective as stating people who buy three to five new kitchen utensils per year, and buy new pots every five years. People want to know that you have narrowed your market.

Main product benefits. The products people are buying now to achieve the same purpose your product fills. (It is extremely helpful to have brochures, or print outs from web pages.) Be sure to check out an industry directory for products and not just rely on your local stores. You can typically find the directory at trade magazine web sites. You can find the trade magazines by checking Gale Research’s Directory of Magazines and Broadcast Media which is available at larger libraries.

Target price. Sales outlets, where the products will be sold. Distribution outlets, what type of distributors or manufacturers representatives can be used to sell the product. If you don’t know this information you can get help with your specific product from SCORE, which are retired business executives who offer free help. Another good source is your local Small Business Development Center. Both of these organizations can help you define your distribution channel and also the sales outlets where you will sell your product.

You should put all this information on no more than two pages of paper. Then whenever you talk about your interesting idea you can show someone that you have in fact done your homework. The brochures about other products can be attachments.

Step 2: Show why you are knowledgeable about your product idea.

People always will take more interest in your idea if there is a reason that you have specialized knowledge about the product area that will convince people you might have a unique innovative product. People will take notice if an operating room nurse creates an idea for removing the fluids that are used to cleanse body cavities during surgery. That’s because the person really understands the needs of the users. They will also take notice if the inventor is an avowed hobbyist, with tremendous passion for his or her hobby. Another are where people take notice is if you are in the distribution channel for the product. People will listen to a mom who is also a baby products manufacturing representative who has a new baby product.

You can still adjust if you don’t have a background that suggests you really understand your product. You just need to get the support of someone who does have the background. For example a mom with a baby product just needs to find a baby store owner or a baby product’s manufactures’ representative to support the product. You can even give the person a 5 percent stake in the product so you can call them a partner. How do you find people who can support your product? First, you can network with the people you know. Ask your family and friends if they know anyone who works for a baby stores, a baby products manufacturer, or is a baby products representative. Networking works much more often than you might think because your family and friends together often have contacts with a relatively large group of people.

If networking doesn’t work attend local trade shows appropriate to your product and visit stores to see if you can meet a contact. A last method is to subscribe to the industry trade magazine look for new product announcements. Typically you can request literature from the companies and often literature comes with the name of the local sales person. Then all you have to do is call people up and tell them you are looking for an advisor on your new product. Tell them you are willing to give an advisor 5 percent ownership in your idea and ask them if you can take them to lunch to discuss your idea.

Step 3: Pick a distribution channel you can penetrate and have a plan.

You just can’t tell people you are going to sell your product at Wal-Mart. Wal-Mart rarely buys from a small one product company, especially one without commercial success. You need to instead focus on a distribution channel you can penetrate and have a specific plan to do that. You almost always are better off starting with a specialized distribution outlet. If you have a baby item, start at specialized baby stores. With a kitchen item, start selling at small kitchen stores to build up success that will help you get into bigger stores. If you have a faux painting sponge that does specialized prints, you might start selling first to painters, then to paint stores, and then finally to Home Depot.

You need a plan on how you are going to sell to the distribution outlets, through distributors or manufacturers representatives, or direct sales to some small regional chains. To learn more about your distribution outlets read industry trade magazines that will talk often about distribution, or use the contacts you’ve met networking or by attending small shows trade in your areas. You can also get help from the SCORE or SBDC organizations mentioned earlier in the article. The One Stop Invention Shop also provides a service that creates a marketing plan for new product introductions.

Step 4: Create a Target Customer Profile Chart.

One of the final steps that shows you’ve done your homework is to create a customer profile chart that details the market opportunity that is available for your product.

Target Market Profile — Faux Painting Supplies

Market Segment: High end wallpaper and paint contractors

Needs: Patterned Look

How Needs Are Met: Use sea sponges and then make their own designs

Products Purchased: Sea sponges

Market Segment: Midrange paint contractors

Needs: Patterned and standard look

How Needs Are Met: Use sea sponges for standard looks, unable to do complex patterns.

Products Purchased: Sea sponges

Market Segment: New users wanting a sponge look

Needs: Standard sponge look with simple pattern

How Needs Are Met: Sea sponges

Products Purchased: Sea sponges

Market Segment: New users wanting pattern wallpaper-type look

Needs: Advanced patterns

How Needs Are Met: Products not available

Products Purchased: None available

This chart shows there is a market opening of advanced pattern sponges that can be used for new users wanting complex patterns. You can also make a case that an advanced pattern sponge would sell to the mid to small-size painting contractors who are unable to create their own advanced patterns.

Step 5: Have a great name, slogan and packaging concept.

People in the new product business consider a great name, slogan and packaging just as important as having a great product. Sometimes it is more important. But be sure to do a trademark search for the name you want to use. Many times inventors use names that are already associated with products in the industry and this turns out to be a major negative. IP associate, Eric Hanscom, can help you search and apply for a trademark.

Slogans and a drawing of what your package will look like also show two important facts to the people you talk to. First, it shows that you have worked hard on your invention and are preparing realistically to bring your product to market. This is a big advance over many inventors who quickly sketch up a drawing and then expect to make millions. Second, it shows you are concerned about selling your product and that you know that sales is the toughest part of introducing any new product. Again this shows you are aware of the work that lies before you, and that you have enough business savvy to possibly launch your product. For help with packaging, contact Josh Wallace, our graphic design associate.

Many inventors fail with great ideas because they don’t do their homework, which makes them look unprofessional. If you look unprofessional, people won’t even give your idea a serious look. Do your homework so your idea has a chance to succeed. If you believe in your idea, don’t just expect instant wealth, but instead make a commitment to do the work to turn yourself and your product into a winner.

A Leadership Approach to Developing Your Business Plan

Have you ever heard of: “follow your dreams” – or – “don’t ever let anyone deny you from reaching your goals”. The central force behind designing a leadership business plan is the idea of uniqueness; in planning and convincing others to follow you, in a worthy, meaningful venture based on the merits of profits. It is rare that one gets on a business venture without the desire to accumulate profitable growth to the long hours of your labor. The reason I call this concept “Your Business Leadership Plan”, is because, the key figure whom will need to be in the forefront of convincing others to join your business leadership efforts; we be the leader of the “Business”. The leader of the Business plan will have to be the one early on, to scout for resources and think about developmental issues in all areas of conceptual organizational management planning designs.

The business leader/executive will be the one who will need to think of the issues of: aggregate business accountability that involves liability issues, human resources, financial systems analysis and financial forecasting, operations of performance and quantitative and qualitative systems evaluations, marketing that will include product image and perception strategies; and downright ongoing leadership teaching. Additionally, the business leader must guide and empower the executive team of the company and all employees of the organization. To serve in that role, the business leader must do all the thinking in advance on how he/she envisions the organizations, three, five and ten years goals and objectives, as part of the overall strategic plan of action. So often, business leaders and leaders in organizations flow along; not recognizing the business issues of the probabilities’. Business leadership planning is about bringing people together for the purpose of identifying roles and responsibilities in forming a strategic plan and put it into action. And, it needs to be done with the caveat of an emergency recovery plan that is available should matters not unfold as planned.

It is the responsibility of the business leader to set the standards for the rule of implementing process management practices that involve policy and procedural issues. It will necessitate the effort of identifying the right combination of individual roles and responsibilities: to assess people’s strengths, skills and expertise for the sole purpose of creating the TEAM. I have not seen in my thirty five years of leadership management experiences; a business leader form a business plan all alone; it just does not happen; it needs to be a TEAM. The executive business management TEAM must be the one who will be part of designing the company’s business leadership plan. They will be the ones who will carry out the strategic business leadership plan to action in efforts to create more leaders. Dr. Martin Luther King Jr. one said “in this movement we are all leaders”. And, that is what business leadership planners ought to be thinking as the planning is take place; – How do we create more leaders?

The same concept holds true for business leaders designing business leadership plans it needs to happen as a team to form agreements, to form the message of the plan and to display the plan to others in the organization as a united effort, which the organization will pursue. These concepts discussed are applicable in any setting of organizational leadership from small to large organizations; it’s just a matter of working as a TEAM in the formation of the Leadership Business Planning process.

Six Keys to Developing a Successful Business Plan

“To build a successful business, you have to begin at the end.”

Creating a clear business plan is an essential task for every leader who wants to operate a successful, smooth running, self-sustaining company. While it takes time and effort, having such a strategic roadmap will enable you to view your business from a higher plane and to quickly evaluate its strengths and inefficiencies. It will also empower your employees by freeing them to accomplish your company’s goals and to fulfill its mission and vision without your constant, hands-on involvement-which also frees you up from the day-to-day work, or, as we call it, “Doing the do.”

I have identified six key elements every successful business plan should include. The first three encompass what we call the organizational “Culture,” while the second three comprise its business “Systems.” Lacking these business elements almost inevitably leads to employee confusion, conflicts and other workplace problems that undermine product quality and business performance-and makes it almost impossible to remedy them. Since most businesses do not have a clearly defined culture or defined systems, by taking these steps you will gain an immediate advantage over your competition. Below is a brief description of our Six Keys:

CULTURE

1. Vision
A one-sentence statement that defines the ultimate impact your business is going to make on the community. It should state what you want to accomplish in terms of an almost unattainable goal or dream. A good vision statement makes the connection between your business’s passion and its purpose. My rule for Vision is: “People will work harder for a vision then they will for a paycheck.” Your vision statement should inspire, motivate and excite your employees, clients and the community where you do business. It should be short, concise and easy to remember.

Remember, a vision is not merely a large goal. It differs from a goal, in that you almost never quite achieve your vision-it is a virtually unattainable ideal that motivates your employees to meet and exceed your company’s practical objectives. In other words, goals are used to measure systems and processes, while vision is the fuel that ignites people to go beyond goals to excellence. A company’s top leadership has the responsibility to drive its vision. Without the support and encouragement of upper management, your vision will fail to have the impact the company needs to outperform your competition.

Example-“Estrada Strategies: “Creating an Opportunity for All Businesses to Succeed”

2. Values
Core Values are the rules of conduct in your business: a clearly defined set of standards that describes your organization’s approach to relationships. It is a written code of conduct defining how all stakeholders will treat people internally and externally, including other workers, clients, vendors and the community.

Without defined rules of conduct, people have little or no direction as to what constitutes acceptable behavior in your business. In the absence of such values, individuals will create their own rules. Experienced employees will default to values acquired outside the company in prior work environments. Some may have a positive impact, others may not. With no defined values, managers have a difficult time leading people, whether it means handing out accolades or taking disciplinary action.

Your business’s core values are non-negotiable within the company environment. When they are broken, swift disciplinary action or termination is usually in order. When management fails to uphold written values, employees soon figure out that they mean little or nothing-they become token values that everyone winks at and no one takes seriously. However, if core values are upheld, the company can use them to guide every aspect of the business.

Example-“We believe in frequent, open and honest communication.”

3. Mission
A short, concise declaration of the four essentials of every business:
1) What you do, 2) How you do it, 3) Whom you do it for, 4) Where you do it.

Your company’s mission statement is truly the roadmap for your employees; it is also a management tool to communicate how your company will operate in the community.

A mission statement is not a long dissertation, like those from corporations in the 1970’s and 80’s. Those lengthy proclamations were often viewed as unrealistic, empty rhetoric aimed at impressing bankers and the like. Today, they are used to guide the company’s overall direction, as well as its daily business activities. Beyond providing essential guidance to your employees, it empowers them to make swift, effective decisions by establishing critical boundaries. Without a clear mission, a company will often become paralyzed whenever it encounters a new situation as it attempts to figure out what to do.

Example-“Our Mission is to lead our small to medium-sized clients to greater success. Our
Method is to bring about behavior modification through business training, one-on-one
coaching and business monitoring. We Advance our Vision by being the business example
for our clients.”

SYSTEMS

4. Growth

A well-thought-out plan for growing your business that clearly defines these four elements:

1) Your target market;
2) How to market your product to the target;
3) An advertising strategy;
4) Brand creation that establishes a unique visual and emotional identity.

The rule for growth is, “You are either green and growing or you are ripe and rotting.” Without growth, a company will likely fail. A growth plan is the lifeblood of your organization. It includes your company’s sales process, marketing, advertising and branding systems.

1) Sales-the entire process that defines the demographics of your future clients (your target
market or “suspects”), as well as the foundational activities that drive new relationships and will
lead to future opportunities, sales, customers and referrals.

2) Marketing-the activities in your company that create visibility, credibility and demonstrated
ability in the marketplace. Low cost/high impact is a critical element of this process, which
communicates to your market who your company is, what it does, where it does it and how it
does it. Marketing supports sales, but must not be confused with sales. Remember, marketing
is about visibility, credibility and demonstrated ability. These elements build trust and branding
in the marketplace.

3) Advertising-Systems in place that bring potential clients through your doors, make the phone ring and create leads. Advertising is all about making sales. It is the promotional aspect of growth, and concerns how your company attracts its customers. It also tracks where and how
your customers discovered your company. Ultimately, advertising is all about return on
investment (ROI).

4) Branding involves the processes that create product or name recognition in the marketplace. It
comprises the visual and emotional impact people connect with your name, logo and tag
lines. Think of Nike’s “check mark,” or McDonald’s golden arches. Does the market know your
logo, name and tag? That’s the test.

5. Operations

Operations encompass the “nuts and bolts” of how a company satisfies customer needs, wants
and expectations-the blueprint that defines how a company produces its products or delivers its services. The focus here is on the five components of your company’s processes or way of doing things: systems, quality control, labor standards, material management and Internet technology.

1) What your systems/processes are. These define how your company executes, produces and
provides its products and services, including procedures, materials and process manuals.

2) How your company will control the quality of its products and services.

3) Productive labor standards that define the labor-cost relationships of providing your products and services. Think in terms of a piece worker who may be expected to produce X amount of product per X hours, a day, a week or a month. Also, think in terms of labor costs vs. overall revenue or net income. Such labor standards provide the needed benchmarks for your employees and for your managers to track and measure performance.

4) Material management or the cost of goods sold. How your company physically manages and
stores its raw material before and after products are produced. It also focuses on keeping material, shipping and storage costs to a minimum. The goal here is to minimize inventory without running short on needed materials.

5) Internet technology-how your company will use the Internet to advertise and sell your
products. The focus here is how your company effectively uses its website to promote and sell its products and services. Some companies have glorified brochures on the web, and that might be all they need. Most companies today are moving into the e-commerce where prospects can purchase items over the internet.

6. Finances

The financial aspect of your business involves how you manage budget planning, cash flows, capital and debt servicing, KPI’s or Key Performance Indicators-like pipeline and sales values, total revenue, gross margins, operating expenses and net profit to name a few. In the end, KPI’s serve as the monetary numbers that define the health of your company. The process, in short, means developing a budget that covers three years of monthly projections for your business in these three areas:

1) Income statements;
2) Cash flow statements; and
3) Balance sheets.

An experienced leader tracks his KPI’s weekly, monthly, quarterly, and annually. He knows exactly where the company stands financially at any given time. KPI’s make up the financial information a leader needs to make strategic decisions: to buy a building, increase inventories, or purchase new equipment. Running a business without KPI’s is like driving a semi-truck on a mountain road with blinders on. You are likely to drive the truck right off the cliff.

While having a successful business plan defined in terms of these six key components won’t absolutely guarantee that your company will be successful, not having one will almost inevitably lead to failure. Estrada Strategies exists to help businesses like yours succeed, in part by providing business training, executive coaching, and business monitoring you need to create a dynamic business plan.