Founders are often so eager to launch a tech startup, that they lose sight of what it is they do. They may think that their product or service is the core of their business, but most of the time, it's not. In this syndicated article, by Paul D'Souza (Sales Strategy & Turnaround Consultant and Mentor of the Atlanta Founder Institute) describes why entrepreneurs should clearly identify the purpose of their business and how to do it properly.
The article, "What Business Are You Really In? ", originally appeared on Linkedin and has been republished below with permission.
Want to launch your new startup? Want to get funded? Want to close more deals? Want to convert your customers to clients? This same rule applies - you better know what business you really are in.
The Ultimate Business Growth Hack
I have worked with hundreds of companies and their leaders as a Sales Strategy Consultant since 2003. As a Mentor with the Founder Institute and Plug and Play; I talk with Entrepreneurs all the time and very very rarely do they know. For example on the 22nd of September, I spoke to 14 different Founders and Co-Founders of 10 Companies in Guadalajara, Mexico Plug and Play Mexico (www.pnp.mx) Then a couple days ago, on the 3rd of October, I attended the Graduation Event at the Founder Institute Cohort in Greenville, SC and heard 7 Founders present their business ideas. Very few of them could really answer this question, they way I am going to explain it here for you.
Let me tell you why this question is so important to address. The answer lies in Practical Psychology and our innate need and tendency to see the world through the lens of our own reality and our own sense of self preservation. This is primal. This is as simple as putting the oxygen mask on yourself first and then help the person or child beside you when you loose cabin pressure on a plane. Yes. It's that fundamental.
I get that you really know what you are doing and what you are selling. I get your passion. I get your mastery of your domain and the expertise around your subject matter. You need that, it is important. Just to sit at the table of commerce. Just to exist in the marketplace as a viable business provider. If you are not all that, then please leave and go do something else. But let me tell you, that alone is NOT IMPORTANT enough for someone to trust you enough to transact with you. But your customers are busy being themselves and stay focused on taking care of their needs. They may or may not have the time, interest, or understanding of your genius. We don't know, and if your marketing and pitching and demonstrations are right, you could take them off their game long enough to pay attention to you so they can begin to understand what you do, to see if it makes sense or is even relevant to their business. Let alone have a need for it. Or have a budget for it now. Which is needed to complete a transaction with you.
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Knowing what business you really are in changes how you talk about your offering. It begins to frame your offer in context to your customer's needs.
A client of mine who has an amazing marketing tool that increases customer engagement in restaurants, Foodbot.ai, was having a problem pitching his amazing new app to potential customers, because he was talking about his new app and all its cool features. His prospects were not in the market for new apps. But when he started talking about his new customer engagement and marketing services - and not the tool - that helped his customers increased customer loyalty, retention, number of visits per month, and average spend per visit, he got much better responses and interest in his new tool that was driven by artificial intelligence and machine learning.
Knowing what business you are in helps you help your customers. Knowing what business you are in helps you speak to your customer needs. Knowing what business you are in, helps you speaks to your customers in their language. Knowing what business you are in helps you stay focused on what is really important to your customer. Knowing what business you are in helps you demonstrate value to your primary customers.
Let's talk McDonald's. I believe they know exactly what business they are in - and it is not food. They are in the real estate business, which is why it is not important that they make healthy food. They make fast food for people thatt are not concerned about the quality of food they eat. They give it to them fast and make it very convenient for their specific audience to consume their fast food fast. They do this all so very well that they have figured out how to duplicate their model all over the world, grabbing up real estate as often as they can.
The former CFO of McDonald’s, Harry J. Sonneborn said:
We are not basically in the food business. The only reason we sell hamburgers is because they are the greatest producer of revenue from which our tenants can pay us rent.
What business are you really in, and are you maximizing your potential in the market?
Once you've figured this out, you will most probably need to redesign your Go-To-Market strategy, your sales deck, your sales process, your primary offer, how you deliver it and everything you do with regards customer success. But the faster you get to know what you are really doing, the faster you will get to revenue.
I do one thing - I fix revenue problems. Click here to learn more.