Business development from scratch
You are happier than ever because your dream has come true. You have become the parent of your own small business, you have registered a company that, after long sleepless nights, begins to really make money.
However, you should not rejoice and relax ahead of time, your business is still very young and needs constant attention. Do not forget that the creation of an enterprise is only the first tiny little step on the way to a brighter future.
Business development from scratch
How to make your business stand firmly on its feet?
But this is not an easy question. First you need to remember what is the purpose of entrepreneurship? That’s right, the goal of entrepreneurship is profit. Any business is aimed at extracting the maximum amount of money from the goods or services that it offers.
In order to receive a large income, you and your employees will have to study tons of specialized literature in search of the necessary knowledge, be patient and have a considerable amount.
If you touch on the issue of business literature, then there is no need to purchase expensive publications from eminent authors in the first stages. It will be much better to learn the basics of entrepreneurship, using the literature, which is quoted in higher education. Various textbooks and guidelines will significantly save your money and time.
Marketing and advertising is a must-have, as developing your business without them is almost impossible. Advertising is used everywhere: on sites, streets, in newspapers, on television, in the subway, in trams, in buses, on asphalt and even in the sky.
Why is advertising so necessary for developing your own business?
Firstly, advertising will give you the opportunity to declare your product or service to a potential consumer, and the latter, in turn, will help you navigate a large flow of information and choose the best product. That is, yours.
Secondly, advertising not only brings you a new consumer, but also allows you to keep the old target audience. If customers will know that your product is popular, of good quality and constantly progressing, they will come to you again. Perhaps even if this product goes up a bit.
For a successful advertising policy, it is necessary to analyze the five forces of a portrait.
The analysis evaluates the situation in which your product or service finds itself, allows you to evaluate competitors, consumers and shows which way you are going.
It consists of five parts:
1. The emergence of substitute products (ersatz);
There are many examples of how technological advances cleaned enterprises that do not notice the emergence of new products that are ersatz of those products that they have long been releasing.
If you want to bring a new product or service to the arena, you need to study aspects such as:
– the tendency of customers to buy ersatz;
– Comparison of price and quality of ersatz;
– the cost of switching to ersatz for the client.
2. The emergence of new companies;
This item is most related to the complexity of the emergence of new companies in the market. There is a so-called barrier to market entry; it is characterized by the difficulty of injecting certain companies, the need for licenses, large start-up capital, etc.
Need to study the impact of new companies:
– the presence of entry barriers (licenses, patents, copyrights, etc.);
– the need for costs for product differentiation;
– brand value;
– start-up capital for emerging entrepreneurs;
– distribution of goods or services;
– availability of necessary knowledge;
– The response of experienced businessmen;
– The attitude and support of the government and investors.
3. The power of suppliers;
It plays a significant role if suppliers of materials and necessary resources monopolize the market and choose their own customers for supplies.
To assess the level of monopolization of the market by suppliers, it is necessary to study the factors that affect their power:
– a small number of companies concentrated in one territory;
– the products they offer are unique, or they have the lowest costs;
– from them comes the threat of integration into the business sector (that is, the supplier may sooner or later want to open the same line of business);
– the possibility of the emergence of new suppliers in this industry is extremely small.
– This market segment is not an important consumer for a group of suppliers.
4. The ability of buyers to “bargain.”
The ability of buyers to “bargain” is a threat of pressure on prices due to the need for better quality or service. Buyers have strong power if:
– when there are many companies and few buyers;
– when consumers purchase in bulk or when the offered goods / service have a high price;
– when the industry depends on a small number of wholesale buyers;
5. The number of competitors and competition
One of the determining factors that affects the level of competition in a particular industry.