Building a business may be challenging, especially if you are a first-time entrepreneur. You face many struggles when you open up shop and begin marketing your products or services. It is not enough to have an excellent idea; you've got to develop an effective strategy to strengthen your company and grow it for the long term. Before you start your business, you should evaluate yourself and identify your skills, weaknesses, and future goals for both yourself and your company. Many entrepreneurs fail because they start their businesses out of impulse without engaging in the appropriate analysis and market research. Don't be like them- Work smart and think ahead.
In this episode, you will learn how to deal with business partners and competitors. The Five Echelon Group's Founder/CMO Eric Dickmann has a conversation with investor, entrepreneur, "The Betafy Podcast" host, and Olmon Ventures founder- Stephen Olmon about building a business and the importance of having your presence in the brand.
Stephen Olmon is an entrepreneur and founder of Olmon Ventures. He is a business inventor whose wild initiative is to build fifty companies by the year 2050. Stephen's passion is building businesses and help people grow with him along the way. Being a former KPMG management consultant and SaaS sales executive enabled him to understand different work cultures and strengthen business relationships between businesses and clients. Stephen, with his co-podcast host, Jeevan, enjoys helping entrepreneurs who are considering starting their own company. He has also been featured in New York Weekly and guested in many podcasts nationwide.
The Two Things You Need When Building a Business
Stephen Olmon shares some key factors that made his initial foray into business successful. First, they decided to publish pricing on their website. At that time, most companies were not posting their price lists online; but Stephen and his team decided to opt for transparency by publishing prices and therefore take control of the pricing conversation.
The other thing that helped them thrive in building a business was the general thought of design and technology arbitrage. Creating a beautiful and user-friendly web interface for the customers to feel special and valued paved the way for Stephen and his business to achieve meteoric growth. Having eye-catching platforms can attract many potential customers and encourage existing clients to return frequently to your sites. Other companies focused on new functionality, but Olmon and his team pushed the to create a good customer experience and succeeded.
Starting a business isn't for the faint of heart. It's a lot of work but even so, it's the dream for many. While people's reasons differ, many want to be their own boss or pursue their passion. Whatever the reason, a good idea isn't enough. It takes time and effort to research the market opportunity and how your product or service might find room to be successful.
So if you're considering starting a business, where do you begin? Obviously, having a strong idea is a good place to start but there are other considerations. A good business plan can save a lot of time and money. It can also help you think through aspects of your potential new business that you might not have thought about. Here are a few simple steps to consider:
Business News Daily lists a Step-By-Step Guide to Building A Business:
- Refine your idea
- Write a business plan
- Assess your finances
- Determine your legal business structure
- Register your business with the government and IRS
- Purchase an Insurance Policy
- Build your team
- Choose your vendors
- Brand yourself and advertise
- Grow your business
The Common Reasons Why Businesses Fail
Before building a business, you should know if there is a proven market for your product or service. You don't want to end up making a product or service that will not sell. Stephen tells us that his interest in building a business is not mainly based on whether the company is developing the latest technology but is just recognizing if the product or service is profitable. Many people are dawn to sexy or flashy business idea but often times, it's the proven businesses that provide services many people depend on that are the long-term winners. He also points out that some ventures may turn out to be capital intensive, and some may take a long time to generate revenue. Wouldn't it be better to look for businesses that can generate revenue quickly?
Over the last few years, there have been many new and revolutionary products and services successfully launched in the market. While some of these concepts were risky, a few turned out to be hugely successful because they were launched under the right management. Businesses with capital can often afford to take those big gambles but make no mistake, it is a gamble. But when investors look at potential companies to invest in, they want to see research on the business concept and potential market before they decided to dive into any risky venture.
Olmon tells us that one of the common reasons businesses fail is that the business partners' goals are not in sync with each other. Sometimes focus is scattered and not directed towards one goal; this makes it hard for the company and employees to stay on the same track and shift their attention to the issues that truly matter. Diversity in voice and concepts are essential in building a strong business. Still, this diversity should be utilized by the leaders for the company's common good.
Another common theme of failure is poor financial oversight. There are many instances where the owners and finance departments do not strictly monitor their cash flow and cause businesses to overspend beyond their means. Instead of allocating budget for the areas that need focus and improvements, the money goes to unnecessary allocations.
Dealing with Business Partners and Competitors
Stephen advises us that even new businesses can compete in the current market as long as they identify their comparative advantage over other offerings. If you're going to go head-to-head in a highly competitive space, you need to have a clear comparative advantage. There are many different possibilities to gain the edge- you could act as a proprietary source of deal flow or establish essential partnerships with people or businesses with much more business experience or market share. Olmon further states that you cannot just engage with a highly competitive market without an exact plan of action because there is a very high chance of you might fail.
There are so many external factors that can influence your pricing. Your strategy in building a business must not only work for a season or two, but it has to be effective in the long term. Companies with long-term plans usually rise to the top when it comes to sales and customer influence. As a new business, it may be hard to keep up with their pace because they are at most times two or three steps ahead of the rest. This is because they create a healthy ecosystem that engages the customers to patronize their goods and services consistently.
It’s important for people to just get in the game. If they're already in the game, but just doing it, intermittently - I'd say consistency then becomes the game.”
How do I Deal with My Business Partners?
When businesses can't add staff or salespeople, one option is to get partners to sell on their behalf. Partnerships can be one key to growth and if often employed by many successful companies worldwide. Having partners can be a huge advantage when building a business, but they can also cause the business be a challenge to manage. Each side is often looking to the other for signs the partnership is valuable. This can lead to stagnation when neither side is willing to take the first step and make the investment. Stephen recommends adding value up front, just like you do with customers. When adding value to a partnership, the rewards should follow. Don't be afraid to take that first step but also monitor the relationship carefully so you understand the value the partner is bringing back to your business over time.
Building strategic partnerships can be crucial when you start a business. There will be times that you will be working with impactful partners and other times, partners who provide no value at all. The mutual willingness to serve each other and gain are the two things you need to look for when establishing partnerships. Olmon says that if these two things aren't present, the partnership will probably not go very well.
Hiring the Right People for Your Business
When you are hiring people to build a business, you should make sure that they are a good fit for your business. Their skills and experience must be culturally fit and in sync with your company's goals and vision. If a company is skill-centric, business owners should focus more on the skills and abilities and less on the cultural aspect. However, if the business is culture-centric, owners must search for a workforce that appeals more to the culture than the skills and abilities. It requires a lot of skilling-up for a company to operate smoothly and efficiently. Stephen explains that culture and mindset may be different concepts, but it would best if these two are aligned towards one common goal. These concepts are interwoven in some respects, but culture takes time to establish. Part of the culture is having people with a similar mindset. If you have people who drastically think differently from you, that may be a recipe for dysfunction and business distress.
When you are building a business, you should start considering asking yourself and your partner these questions:
- What is the purpose of this business?
- What level of priority will this business take in our lives?
- How do we think about this world?
- Do you hope to put your company for sale in four to five years, or sell it as soon as possible?
BDC Gives Us 7 Quick Tips on Hiring the Right People For Your Business:
- Assess your company's culture- Before you hire people in your company, you must first understand what your company needs. Look for determined individuals who fit well with your business's work culture and live up to your company's values and vision.
- Create detailed job descriptions- Your position should reflect the responsibilities, level of skills, and experience required in the job. Make sure to communicate the job requirements to candidates during interviews to avoid confusion.
- Prepare well-structured interviews- Create an evaluation scorecard to evaluate and compare the candidates' performance given specific criteria. It is also advisable to involve people in your business to interview applicants to gather different perspectives.
- Test- Make applicants complete a written or practical examination to assess their familiarity and expertise in the job position they wish to be in.
- Look beyond their CV- Learn about the candidates better by asking about their interests, ambitions, and life goals. There are times that people may be more comfortable working with larger firms than small firms.
- Ask for references- Do some background research on your prospective applicants. Learn their strong points and areas of improvement. This will allow you to interact better with your employees.
- Bring them onboard- Once the job applicant passes your assessment, assign experienced employees to train the new crew to adjust to the company culture and work ethic. Research indicates that new employees' retention rate can be increased by as much as 40% with a solid orientation program.
Importance of Your Presence in the Brand
Olmon strongly believes that having your presence in the brand is crucial to your business's overall success. He says that people should consider getting into the game rather than sitting on the sidelines. Whether you are an office worker or company CEO, you should start building and strengthening your brand. You don't stay at your company forever; there will be a time where you have to shift gears and try something new. If you are a regular employee, having a strong personal brand may affect your future job opportunities. For a business owner, it could lead to new revenue and or help establish new partnerships. Either way, it's important to be consistent in your efforts to strengthen your brand and image.
Hiring a Virtual CMO for Your Business
Personal presence is a vital element in your overall marketing strategy to build awareness. One of the mistakes that startup companies and young people commit when building a business is that they focus on whatever they're trying to make or produce instead of finding a way to market their product and establish their presence. They tend to postpone marketing because they view it as an expense until things get in place. Olmon says you don't necessarily have to start by hiring a full-time CMO or marketing leader. Instead, you could invest in the services of a Virtual CMO who could help your company build out a strategic marketing plan and then find the right resources to get the plan executed. This saves time and money while providing experienced leadership to help grow the company.
Benefits of a Virtual CMO
A Virtual CMO is a fractional executive who can help your business quickly scale and grow.
A fractional executive works part-time for your business. This eliminates higher salary, benefits, and other compensation costs of a traditional full-time hire.
A Virtual CMO brings years of experience working with companies across industries to build and execute a strategic marketing plan. They will hit the ground running for your business!
From marketing automation tools to outside vendor relationships, a Virtual CMO has the execution expertise to quickly get marketing programs up and running to grow your company.
New Business Venture
Stephen Olmon has recently launched his new venture- Internet Exits. This matchmaking platform allows you to buy and sell online businesses with ease. Olmon and his team also offer business owners an operator or service crew to help them run and manage the company they have just bought.
A Three-Step Seller's Journey with Internet Exits:
- Free Valuation Meeting
- In-Depth Planning Session
- List and Match Potential Buyers
Live Stream Replay
- You can use clinical data from Google Analytics to stay ahead of the game and monitor other competitors' status.
- Before we start building a business, we should know if there is a proven market for our product or service.
- New businesses can compete with the current market as long as they identify their comparative advantage over other companies.
- The mutual willingness to serve each other and gain are the two things you need to look for when establishing partnerships.
- Personal presence is a vital element in your overall marketing strategy to build awareness.
Episode and Guest Links
- To learn more about Virtual CMO, strategic marketing consulting services, or anything else discussed here, please contact The Five Echelon Group.
- The Five Echelon Group's Resources to Restart Your Business
- If you have feedback, questions, or are interested in being a guest on the show, please contact us here.
Stephen Olmon - Entrepreneur, podcast host, and founder of Olmon Ventures can be found online on LinkedIn.
- Subscribe to the 50 x 250 Newsletter to learn Olmon's micro-PE strategy and other essential leadership tools to make financial decisions.
- Listen to Stephen Olmon and Jeevan Betigeri on The Betafy Podcast.
- Get to know Stephen more and partner with him on his quest to build 50 companies by 2050 here!
- Buy and sell businesses at Internet Exits.
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