Many of us like to have our business advice compacted into easily remembered information nuggets. You know, things like The Five Rules of …. , Ten Ways To Improve Profits… etc. So, here is one more to add to your list: THE FOUR Os.
When contemplating a start up, or in making market plans for an existing enterprise, there are four essential ingredients in structuring the marketing of products or services. These elements are common to most successful marketing strategies.
And they are neatly packaged into memorable nuggets as they all begin with the letter O.
Business ideas often begin with an observation. Some might also call it inspiration. In fact, it’s the simple act of noticing a need that is being filled or not being filled. Once you observe this need, it’s important to look around, investigate, speak with those in the same area to determine the specifics of the need.
Example: In the early 1950s, the McDonald brothers of San Bernardino CA observed a need for a no frills, high quality/low cost source for hamburgers and were inspired to create a highly efficient system to deliver such product quickly, thus pioneering the fast food concept.
Once you have identified a market need via observation, you must then assess the scope of the opportunity. This means that you need to perform your due diligence on the potential of your observed need to be sufficiently successful to support operations and produce a profit. You must research the potential size of the opportunity to make sure that it’s success is sustainable into the future.
Example: Entrepreneurial salesman Ray Kroc observed the McDonald Brothers’ marketing phenomenon and recognized the enormous opportunity inherent in franchising this idea. We all know the rest of the story.
Example: Or perhaps I should call this Examples, as I’m talking about the numerous .com enterprises launched in the 1990s and early 2000s. Many of these were inspired ideas that attracted investors aplenty. Many also crashed and burned. A famous example is that of an online grocery store (I’ll omit the name of this venture) with enormous selection, high quality products and low prices–– plus your order was delivered to your doorstep! Sounds great now, right, and there are numerous versions of this idea floating around today, not even including Amazon, which is similar in basic concept.
The lesson of these two OPPORTUNITY examples is in the old adage: Pioneers get slaughtered, settlers flourish.
This is another way of saying “eyes wide open” when venturing into a start up. The lessons of being a pioneer in your niche needs to considered. True, some pioneers make millions: Jobs, Gates, Musk, Edison, Ford, Kroc, but there are hordes of truly inspired enterprisers who had great ideas that either didn’t come to fruition or failed to thrive.
We enterprisers tend to fall in love with our business visions–– starry-eyed, we sometimes only see the positive and overlook or minimize the negatives.
To be successful, you must perform a a truly objective risk analysis and understand that all business is risk. You must be ready to walk away or consider a new configuration if the facts point to increased risk of failure.
Example: There are too many to single out any one example here. I suggest you search the topic: business startups that failed and why.
The last “O” in this list, obtainability, refers to the potential of your enterprising idea to be brought to life. If you’ve made it through the first three Os and you’re still optimistic about the viability of your start up, the next question is focused more on you, now that you think the business idea sound and sustainable.
Here are some of the questions you need to ask yourself:
- Do I have the skills to make this enterprise work?
- Do I have sufficient capital to launch and if I don’t, can I raise it?
- Do I have the temperament, attitude and personality to take risks?
- Will my current life situation and status support an entrepreneurial venture?
Example: Ted (last name removed for privacy) came to me for consultation about two years ago. He had a been a strategic analyst but couldn’t stand the big corporation culture. He had an idea to start a strategic marketing consulting firm for smaller businesses. He failed miserably and here’s why:
- His OBSERVATION of smaller businesses using such a service was faulty and his due diligence inadequate.
- Ted failed to research the scope of OPPORTUNITY for this service. Many small businesses practice “grass roots” marketing and don’t utilize tools such as strategic and/or market analytics. Ted’s lack of OPEN MINDEDNESS let him mistakenly see a “market niche” for these services. He was blinded to the fact that there was an “opening” in this market because very few businesses in this segment were buying such services.
- Lastly, Ted also failed to honestly asses whether he had the means to OBTAIN this business. He did not. He had little experience with smaller businesses, lacked tenacity and life experience to wade into this market, and then make adjustments.
If you’re out there getting ready to launch a startup, or you’re in the early days of your first enterprise, remember it’s not about U. Remember your Os.