“Shallow men believe in luck. Strong men believe in cause and effect.” -Ralph Waldo Emerson
When I began dabbling in internet businesses eight years ago, I would start with a great idea and plug away at it, not knowing what was keeping me or my business from reaching the next level of success (or the first level of success for that matter).
There are few things more painful than working tirelessly for months or years only to realize that no amount of hustle, networking, or sweat equity will ever improve your business. This realization comes slowly – the realization that it’s not you, or your skill or even your idea that’s the problem – it’s your strategy.
If you’ve been in business for a while, don’t quite rest on your laurels yet – sometimes a similar flaw in underlying business strategy can keep you from getting the success your hard work and ingenuity ought to have earned you.
The over-arching strategies that we employ in our businesses matter from day one, and keep on mattering until the day we close up shop. What’s amazing is how little attention we give our strategy when we’re not in a startup phase. (And sometimes – even when we are!)
Implementing a strong, well-researched strategy, or regular re-evaluation of the one you’re using, is often the difference between hoping your idea works, and knowing your business will be running as long as you’re interested in running it.
As this year draws to a close, it’s a perfect time to sit down with a warm mug of cocoa, and look at where we’ve come from in our businesses, where we want to go, and how we can make sure we’re employing the right strategies to take us there.
Here is the 5 step process I take people through when evaluating their business:
1. Understand the Market
2. Find their Pain (or Pleasure) Point
3. Research the Competition
4. Find your Distinctive Competence
5. Assess your Capability
That might sound like a lot of buzzword/business-speak, or a bunch of stuff that you already know (been there, done that, bought the t-shirt, right?) but it’s all real, effective analysis that will give you huge insight into your business.
Let me walk you through each step:
1. Understand the Market
When is the last time you thought about the size of the market you are going after?
Was is a little while ago? Was it a long while ago?
It’s okay – it happens to the best of us. However, changes that have occurred in the market, or mistakes we made when first analyzing it can cause major problems.
If the market you entered was never going to be large enough to support your business, it’s time to go back to the drawing board. Conversely, many people started too broadly and are never able to break into their market.
It is always easier to move upstream with your business once you’ve gained traction in a targeted niche. A friend of mine in San Diego came to me frustrated that his roofing company was throwing thousands of dollars at AdWords campaigns but not getting the kinds of leads he wanted. I helped him take his focus off of targeting every type of roofing inquiry within the greater San Diego region, in exchange for a micro-local strategy. By focusing only on people wanting new roofs and solar panels installed in the high-end neighborhoods surrounding his business, he was able to spend less on marketing and get the right kinds of leads.
Take a little time to sit down and think about your market today – are you still barking up the right tree – or do you need a change of direction?
Another question to ask is are you effective at speaking the language of your target audience? FPM has done a better job than I could of describing how to find your ONE person. But it must be stated that if you are not effectively communicating with your key demographic, you will not succeed at winning over “raving fans.”
Tip: I use Google’s Keyword Tool and the Wordtracker Tool to measure the search traffic of the primary keywords my target audience will be using. This can provide surprising insight for you in terms of how your audience describes their problem and interest.
2. Find their Pain (or Pleasure) Point
I know that you know all about pain and passion – you’re on Firepole Marketing, after all – but are you really making the most of the pains and pleasures your target market experiences?
You may know what the pain is – but have you spent time figuring out exactly when that pain hits them? Whatever the pain is, or whatever the pleasure is, you’ve got to be available to them the second it hits so they can alleviate or have it! That’s when they are most willing to pay.
I have some friends who grew a musician’s classified website to over a million unique visitors each year, outranking Craigslist in many cities. However, the massive audience of young bands and musicians happen to be a group that isn’t looking to pay much to post classifieds. Are you shocked? Of course not. What these friends of mine should have considered was structuring fees to be a part of the purchasing process – after someone has found the perfect item that they lust after or need to do their art – then a small processing fee doesn’t seem as bad as a barrier to posting an item!
This is the same issue that caused Facebook stock to plummet after its IPO; Facebook hadn’t proven a way to generate income. Even though Facebook has nearly a billion users, the website is only as valuable as its ability to monetize those users.
Tip: If you aren’t already, start hanging out on forums related to your audience. It could be that you’re an expert in a field, but you are missing out on what your audience needs.
3. Keep Tabs on the Competition
As you work to grow and focus on developing a business strategy, make sure you don’t lose track of who your competition is and what resources they are putting towards meeting your audience’s needs.
This is something its good to do at least once a year – things change fast in the digital age.
Make a list of the competitive environment: the key players, how much of the market they control, their products, and how well they are meeting the audience’s need.
How do you stack up by comparison?
A realtor came to me recently asking if I could help them grow their marketing presence online. As we researched their area, no matter what avenue we pursued or how small of a niche we targeted, the competition was willing and able to put more resources (time and money) into their marketing campaign than she was able to. It would have been painful to see her throw money at marketing campaigns that would still have been crushed by the competition. It was smarter for her to continue to grow her brand through referrals and word of mouth until she had the resources to compete.
4. Refocus on your Distinctive Competence (What’s your Unique, Defensible Position?)
You’ve found an audience that you understand and a problem that you can solve for enough people willing to pay you for it – good job!
But have you centered your business around your unique awesomeness? I recommend that every quarter, you map out your own strengths and weaknesses and those of the competition, then find those sweet spots that really give you an edge over the competition. If you are not constantly protecting your competitive advantage, you may be setting yourself up for a competitor to swoop in and find a better angle of solving the same problem (this is why MySpace became a ghost town after Facebook came along). There are lots of ways this problem can be solved, but you want to find out what you are particularly gifted at and develop your business strategy around your strengths.
Is it building a community? Technical expertise? Are you a better teacher than others in this field? Can you develop a proprietary product or service no one else offers?
I used to make a living running a professional card counting team and was looking for an angle to share my knowledge online. I knew there were mathematicians with better credentials who better understood the technical aspects behind blackjack than I did, and that there were more famous card counters out there than me. However, there were very few people who had become as efficient at training people to beat casinos at blackjack as we had. Of the few people who have run large-scale blackjack teams, none of them were creating video training on how to do it. So when we started Blackjack Apprenticeship, it was clear we should center it on our practical video training. Within weeks of launching our website and posting videos on YouTube we had the #1 video for the search term “How to Count Cards” and a profitable business. The past 4 years since then have been about growing the business, and a community around our unique strengths.
Tip: Always provide the richest media necessary to get the job done – but no richer! There are times when video is the best – other times when audio or text is just as good. Poll your current audience to find out what they want the most.
5. Make Sure You Can Do it All (or Figure Out Who Will)
The final barrier people tend to run into in researching their business is the inability to get everything done. I always tell people that the trick to being successfully self-employed is tackling that last 20%.
50% of the business is fun, 30% is doable, but that last 20% is the difference between success and failure. Ask yourself if you have the following resources:
It’s a mistake to think you need to possess all these resources yourself (I know I sure don’t).
Instead, address how you will make up for your deficiencies. If you have a technical skill but are short on money, perhaps you can find people with whom you can trade your work for the piece of the puzzle you are missing. If you have an excess of time, it might be worth learning a technical skill like simple web development or learning how to Write like Freddy.
One Entrepreneur I know grew her extreme couponing website to a six-figure annual income, but was burned out and ready to quit over a year ago. I encouraged her to find and train the right person to manage the day to day operations of her business, freeing her up to pursue the areas of the business that give her energy and satisfaction. Since hiring someone to help out, her website has grown dramatically; she increased her income, and most importantly, she got way more flexibility for her life.
If you cannot account for all the resources needed for your business to thrive, just be honest with yourself and consider how to structure your operation in a way you can manage.
Tip: It’s good to sit down and reassess your resources and needs a few times a year, and don’t be afraid to restructure when you have to!