Sunday, October 19, 2014

3 Things Smart Business Owners Do

As I write this, I’m still learning about “what it takes” to be a business owner.  I’ve figured out some things, but the more I learn, the more I realize how many others figured out MORE than me.

That’s okay.  I just try to learn from them as best as I can.

In addition to noticing the business owners who are doing well, I try to pay attention to business owners that are not doing as well. I try to compare what I see within each and do my best to identify some of the biggest differences.

Here is what I observed that the smart business owners do:

1. Sell Packages, not Commodities
2. Present According to Customer’s Wants, not Needs
3. Create Win-Win Situations for Employees and Contractors

Let me take a moment (or two) to explain each of these.
1. Sell Packages, not Commodities

I notice that many “business” try to products or services that others are selling, already.  They might claim that “they care more than the others do” or they provide “higher quality.”  However, often their businesses are too easily perceived as “me-too” businesses, meaning that these “new” businesses are not really offering anything “new.”

The smartest business owners might offer a product or service that already is on the market, but they make a point to offer it within a larger package. This does two (2) things:

(A) It allows the business to offer something a little different.  If customers go somewhere else, they might not get EXACTLY what the smart business owner offers, at least not in its entire package.  This helps makes it unique.

(B) It also makes it harder for people to compare their prices with the competition.  If we sell the same thing as the guy down the street, few people are going to pick us if we don’t have the lowest price.  They’ll pick that cheaper guy down the street.  The smart business owner offering a package of products or services make it harder for people to determine how much cheaper the competitors are…since they are not offering the exact same thing.

2. Present Sales Pitches According to Customer’s Wants, not Needs

Many people who start up businesses think that people SHOULD get their service, because they NEED it.

This does not seem like a bad idea…UNTIL we take a moment to observe customer behavior.

None of us is ever sold, but all of us buy.  We might buy something saying “we need it” as an excuse to buy it, but we really just want it.

Smart business owners understand this, and this affects the way they present their product or service to people.  Smart business owners try to identify what customers WANT, and they present what they are selling in a way that meets that want.

Once a person sees more clearly that buying it helps them get what they want, THEN they will buy it.

They don’t buy because they NEED it.  Often, that’s just their excuse.

3. Create Win-Win Situations for Employees and Contractors

All of us want to get the maximum for the minimum.  Even TJMaxx used that jingle for years, because they knew it was true.

This is a great bargaining guideline, but it is a lousy idea to do this to people who help produce a profit for your business.

The most intelligent business owners realize that the most successful business models are ones that can be repeated…many times.  Most people get better the more times they do something.  Therefore, in most cases, businesses do better when they retain employees or contractors to do what they’ve become really good at doing…for themselves…and for the business owner.

A smart business owner makes sure that people working for him (or her) feel like their work situation would be difficult to duplicate working for another business.  The happier they are working for you, the more focused—and dedicated—they will be.

I’m not suggesting that smart business owners should pay a ton for their workers, especially if it makes the business unprofitable.  However, the intelligent owners make sure that people who make money for them remain happy to keep making money (by doing the work).

The “get all you can” game plan works…until they find someone who offers something better.  If your workers suspect you offer less, they will be distracted from trying to help you make money.  They’ll also try to go where they feel like they’ll get more.

Once that happens, your business is getting less.

Bonus: Focus on Business Model, Not Payment for Time

This is one of the biggest revelations I made, but I made this a “bonus,” because I had help seeing it.  I first read this in Robert Kiyosaki’s book Rich Dad, Poor Dad.  I just happened to see it within intelligent business owners.

Smart business owners NEVER think about how much money they make per hour, year, etc.  They never think about how much “their time is worth.”  Don’t get me wrong.  They value their time tremendously, but they never look to exchange it for money.

They put together business systems, and the most effective owners find ways to REMOVE THEMSELVES from the system…and still make money.

Some business systems might only be partially “automatic,” but the smartest business owners are always trying to find more ways to make money this way—not find ways to increase their “per hour” charge.

Perhaps, I missed some other valuable things smart business owners do, but these are things I’ve noticed and can identify that EVERY smart business owner does (and many not-so-smart business owners fail to do).

Good luck as you and your business slog through the unknown on the path toward success.

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