There are two opposing views:
“Strategy is the rare and precious skill of staying one step ahead of the need to be efficient”
“Your margin is my opportunity
Jeff Bezos -Founder, Amazon
Neither perspective on strategy is right or wrong – today we discuss the importance of understanding which end of these extremes your business is positioned?
I once asked a successful entrepreneur what made a great accountant / adviser- his answer was to be both:
1. Timely AND
Something to chew over in today’s podcast – look forward to your comments
Listen in to hear 3 powerful questions to help you focus on working ON your business rather than IN your business.
Let me know if this helps or if you have any other powerful questions that you can share to help other entrepreneurs and business owners?
Thoughts on how we can communicate more effectively in a B2B environment without interrupting people using the phone nor adding to the deluge of email – all the while seeking to enhance the all important personal touch!
Please add your thoughts and comments.
A personal story about how a white hot desire to seek to achieve something can move mountains (or dare I say, The Universe…)
Have you ever felt it?
Today’s ramblings are about a new rival to Amazon – Jet.com.
Jet is already being courted by Walmart as it looks to beef up its online distribution model. With 12m lines already, Jet is looking to attack Amazon’s seeming dominance of the online market by offering household goods at cost price. Customers are rewarded with further reductions for buying in bulk.
So how does Jet make its money?
Via a yearly subscription of course – $50 per year. Not a lot in of itself but potentially huge if it gains mass take up. Whatsapp showed us the power of subscription models with its $1 dollar annual fee (pre Facebook days) – not wholly exciting until it reached 200m+ users and therefore a tidy $200m per year. Also, more recently, Dollar Shave Club?
I am a huge fan of subscription models. Think monthly Saas subscription business models; membership plans, continuity programs etc. A recurring income flow. Predictable revenues with no receivables to chase. Highly attractive to prospective purchasers if you are looking to build a company to exit.
Have a think how you can add the subscription model into your business, if you haven’t already….?
Kicking off a series of short daily podcasts. Something a bit different. Short. Off the cuff.
A bit like this blog post :)
PS The Ultimate Sales machine book comes highly recommended!
The 10 squared principle seeks to identify specific traits that appear to apply to successful businesses.
You should never be part of the operational team – ever! (Even if a train driver is off ill, you never see Richard B step in to take over!). The same principle applies here – you are the business owner.
Work on it, not in it.
Have one or more recurring revenue streams built into the business model. One-off sales should not form a core of your business. Aim for 50%+ of the income to be of a contractual recurring nature.
Trying to educate the marketplace on a new product or service can be very expensive. Stick to what is already known and well established.
Just execute better.
If the business model could be outsourced to offshore centres, it should be avoided.
Vanity projects are normally expensive and destined for failure.
These can change in an instant. You want a business for the long-term.
High value B2B sales can drain your cashflow as deals can take an age to complete. Smaller, cash intensive services / products via regular transactions are better.
Trainable to staff (locally) so no need to suffer from limited resource pool and specialist (spiraling) wages.
It could be the acquisition of an existing business that just needs to execute better (just so long as they adhere to these principles and the price is right!)
The small things count if applied and compounded day after day.
Please let me know if you think I’ve missed any hidden success factors…
I know it’s not cool to aim for being ‘ordinary’ and its not a label that you’ll want attached to your business but when it comes to your SEIS / EIS shares this is exactly the label you want – ordinary shares.
SEIS / EIS shares must be ordinary non-redeemable shares and carry no preferential rights to dividends or assets on a winding-up.
If you have institutional or other non SEIS / EIS investors then things can become more complex, if they say want preferential rights in relation to certain aspects of the business.
In this scenario, differing share classes would typically come into play with say ‘A’ shares for the founders, ‘B’ shares for VCs (both classes may have some preferential rights to varying degrees) and ‘C’ shares for SEIS / EIS investors – these being the ‘highest risk’ ordinary shares.
No one-size fits all but this gives you an idea. If you are going to go down the road of different share classes then bear in mind that this will require formal legal procedures to give effect plus amendments to the Articles of Association of the company (this goes beyond the scope of this course – get yourself a decent lawyer!).
This is a just one of a series of emails from our SEIS / EIS course – you can subscribe to the course below: