Monday, June 15, 2015

Building a Business: Product, Marketing, and Money

Not wanting to bite off more than I could chew, I opted to roll out You Could if You Wanted to focusing only on actual small businesses. Features like Working for Myself, Where I Went Today, Beautiful Storefronts, and Small Business, Big Impact all zero in on some aspect of business ownership while hailing the success stories of those who went before me.

From conception, however, YCIYWT was to be a place where those who want to start their own businesses—or take their startups to a new level—could congregate for tips, trade secrets, advice, and inspiration. It’s time for me to add to the range of content supplied here at YCIYWT. It’s time to start talking business.

The Three Parts of Business

The first business class I ever took broke business into three parts: product, marketing, and money. The instructor claimed that every business is tempted to overlook at least one of these parts, and yet all were equally important, so if we students ever hoped to own our own businesses we’d better get used to the fact that we’d be dealing with all three.

Since that class, I’ve discovered she was right. I have been able to see how every aspect of running a successful business falls into at least one of the categories of product, marketing, or money, and I’ve also learned to see how all the parts are interrelated. 

Take something like coffee. (It’s an easy go-to for me.) Coffee is a product that appeals to a mass market. Everyone has to eat and drink—coffee is a great option because it’s readily available everywhere and can have beneficial side effects. 

That said, coffee comes in many forms. The version I might offer could appeal only to a specific sector of that mass market (and probably should). I might offer gourmet, made-to-order coffee, at a steep price. That price would represent the cost of labor and materials in addition to the final product, and the labor and materials might be expensive—but to the right market, it’s worth it, because that market has the money to spend and no LaMarzocco at home.

Looking at all that information more closely, we see: 

… a product (gourmet coffee) 
… that speaks to a specific market (people who want a gourmet experience in addition to the pleasant side effects of consuming coffee) 
… that can provide a return to me on that product (because the people can afford it). 

If any of these parts was not realized, the other components would not succeed. E.g., if I tried to market my gourmet product at a gas station or in a low-income neighborhood, those passing through might not expect or desire a gourmet experience. If I cut my prices to appeal to those in that area, I might not be able to cover my own costs. (Not to mention that I’d devalue my product.) Creating a product necessarily requires consideration as to who will buy, and this means who they are (the market) and how much they’ll be willing and able to spend (money).

It’s amazing what a foundational understanding of the component parts of business can add to the study of the more intricate details of business operations. When you can sift information based on whether it has to do with product, marketing, or money, you can also see how much energy you’re expending on each facet of business, and adjust as needed. You can determine more easily when you receive advice whether it is good or perhaps not right for your venture; if it doesn’t stack up next to the strategies you’re committed to in the other areas of business, then you can shake it off.

How This Applies to YCIYWT

I am eager to start talking here on YCIYWT about the nit and grit of business planning and operations, but that’s a wide playing field. An efficient way to streamline the process is to categorize every business education post as pertaining to product, marketing, or money.

When you read the upcoming feature “Building a Business,” look for the hashtag for which aspect of business the post pertains to. (Since the parts are interrelated, sometimes there may be two hashtags.) While you’re building your own business plan, keep track of what you’re learning and how much time you’re dedicating to each part of the business—product, marketing, and money—so that no aspect of the business goes neglected and weighs down the system.

Because marketing is my favorite of the three parts of business, that’s where I plan to start. My lead-off topic will be brand development. We will consult the experts, examine a handful of businesses that have done creative things to make a statement for themselves, explore the fundamental rules of visual marketing, and expound of the wisest areas to invest thought, time, and expenses for brand development.

I look forward to it! See you then.

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