You have reached Think Big, Start Small to learn about ways to pull in revenue faster.
A Business Startup article from
by William Keyser
William Keyser is Managing Director of WorkSavvy. He counsels would-be and early-stage entrepreneurs. His Website which can be visited at http://www.worksavvy.ws, is packed full of ideas, information, and tools for the budding businessperson, who wants to start sooner, develop stronger and last longer.
Summary: SPQR is an acronym of a Latin noun phrase, Senatus Populusque Romanus ("The Senate and Roman People"), referring to the government of the ancient Roman Republic. SPQR is also a humorous acronym for Small Profits Quick Returns. Both have significance for your business startup. This article shows you 10 ways to small profits, quick returns.
Introduction: Think as big as a Roman Emperor and start with small steps towards your own empire. The reason for a big vision is to have clarity of purpose. The reason to take baby steps is to get results quickly. The sooner you can get 'returns' the better. Returns may come in the form of feedback as much as from income or saved expense. There is no business that goes according to (business) plan. If you take those initial steps without having the big picture, you'll soon be lost.
Plan for the Horizon: Be very concerned about what's on the horizon—that's where you're headed, but be preoccupied with what's on the agenda―that's what will get you there. Live your future now; if you don't, it'll soon be your past. The returns are going to be bigger if your plan is writ large. While planning is vital, allow yourself to grasp the unexpected—don't avoid opportunities that pop up simply because they weren't in the plan.
Sell Your Prototype: If that's all you've got ready, sell it, at a big discount maybe. Or, even give it away (protecting your invention, of course). Getting feedback on prototypes early ensures you get the return of buy-in from others later and will ensure that you can make 'Mark II' better. That's the whole idea behind software developers launching Beta versions for free. It's the next best thing to being your own customer.
Work with Lead Users: You can collaborate with lead users, offering them special deals in return for being available for reference once your definitive product is on the market. When I started in business, I was very pleased to work from Day 1 with a company that was always being asked by others for advice. I offered more in use-value than was paid for, but the 'return' was generated over a long period.
Offer Service Before Products: There may be a way that you can sell a service before your product is ready. There are many services that you can perform if you have the expertise to produce products. Your knowledge will enable you to offer your time for sale more quickly than perfecting something that you have to manufacture. The fee that you earn generates the revenue that you can apply to the production process. the return may be smaller, but it's sooner.
Stick to a SimpleRange at First: You may have conceived a grand plan for your product range, but you should not wait until everything is in place before you start selling. Selling a few items will get the revenue flowing and more importantly, you'll start getting customer feedback before you are fully committed. You can even go out and sell a spec that you fulfil once you have a signed order. This way you'll avoid unnecessarily scrapping things that have not worked or were unacceptable to clients on a larger scale.
Test Drive Procedures: If you plan to open a restaurant to offer meals throughout the day, start by opening just for one meal only, say in the evening. Then you can use the day time for doing all the many things you need to get done before the full launch, like visiting suppliers. Your kitchen procedures that have let you down in the evening can be perfected in the closed hours the following day, without getting in the way of food preparation when you have customers waiting.
Sell Close to Home: Small clients close to home may not seem exciting and be without huge potential, but they will be easier to sell and sales costs will be lower. Getting paid is likely to be easier. If there's a delay, you can visit the customer personally. Chasing payment long distance is always more problematic and you'll need all the cash flow you can get to cover your operating costs. Your margins will be better short term if you can keep the cost of sales down.
Go for Low-hanging Fruit: You must plan on the big or complex sales that are going to give you the best margin eventually, but grabbing easily accessed sales, the ripe fruit, that is right near by will help you on your way, while bigger ones mature. The big return on these quickly-made sales is that the feedback-and-product-modification process can be accelerated. Little incremental improvements will soon add up.
Have Staff On Call: Of course you want to hire the people that you think you'll need for the operation of your business, but if you take staff on to the payroll, you need to be sure that you can pay them on an ongoing and regular basis. Maybe you should be thinking about creative ways that you can get round that level of commitment. You can recruit staff on call. What work can you contract out? Can you pay by the hour-worked or are part-timers possible? Only undertake work that is absolutely essential. The return you'll get from delaying recruitment is keeping cash in the business at the early high-risk stage.
Don't Go for Broke: There are some startup businesses, like in hi-tech, where you may have to commit big sums of money up-front before you can sell a thing. But most startups work best if you work with as little money as possible. If you're hungry, you'll find ways of getting that vital revenue instead of capital. There are many entrepreneurs who have wasted vital time doing the rounds of investors when they could have been on the road selling goods. In any event, you'll be better at attracting funding if you have a track record to back you claims.
Links to More Reading: It's Not the Big that Eat the Small...It's the Fast that Eat the Slow by Jason Jennings and Laurence Haughton; The Risk-free Entrepreneur: The Idea Person's Guide to Building a Business With Other People's Money by Don Debelak and his website; Democratizing Innovation by Eric Von Hippel, the MIT professor who coined the term 'lead user' and you can even download the whole book or parts of it for free.
If you would like to quote or make use of the material used in this article, please do let me know.
William Keyser • 2006 • will @ worksavvy.ws