Business, all business, must adhere to a fundamental basic formula: money in – money out = profit. When it comes to generating revenue, you have to have something to sell, someone has to be willing to buy it, you have to locate the people willing to buy your product or service, and finally, you have to ask them to give you their money. That’s more difficult than it sounds.
- Most of the clients I work with have identified what they want to sell, but assigning a strategy market value to their offering is much more of a challenge. Figuring out just how much money, time (translated into money) and effort (translated into money) goes into getting your widget into the hands of the customer requires a lot of thought.
- Identify your target customer. Knowing you’ll have customers and understanding exactly who they are going to be are two completely different things. You must know everything about your perfect customer and who they are giving your money to (yes, your money). Your job is to convince then to shop with you.
- Once you have identified your customer with distinctive intimacy, you have to let them know you exist.
- Depending on the price point of your offering, you will have to be able to sell, and close sales. This is usually the biggest emotional challenge for new entrepreneurs. Many of us feel uncomfortable or even dishonest asking others to turn over their money to us.
If you start your business planning understanding these basic principles, you will soon be able to set realistic goals and a solid revenue forecast.
Louis J. Celli Jr. is a retired Army master sergeant who has started and developed businesses, and has counseled hundreds of veteran entrepreneurs. Readers can send questions for “On Point” to email@example.com.