Journey of a Serial Entrepreneur

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How to get from where you are to where you want to be

Marketing Budgets and Controls

“An important and often overlooked aspect of operational excellence is regularly comparing actual costs to budget assumptions – not just the numbers in the plan. Understanding assumption deviations will help improve the accuracy of future forecasting.” Bob Prosen

Budgets are a necessary evil, they draw boundaries to ensure we know how far to go with the marketing plan. With entrepreneurs , the boundary perimeter is often small and limited. This calls for ingenious tactics to make full use of creative and deal making mindsets. The budget of a marketing plan is directly correlated with objectives set by the team. The progress towards those objectives, must be monitored constantly by using control measures. These measures act as feedback mechanisms to help identify each tactic’s input. There are a few things I like to keep in mind when in the midst of setting budget and control measures:

1. Are our objectives and marketing budget in sync?: For a new business, it is important to outline realistic and attainable marketing objectives. I am all for optimistic and large goals, however, often these objectives are set without necessary resources allocated for realistic follow throughs. When discussing numbers, this is a good time to go back to objectives, and see whether attaining a 3% market share with your marketing budget, is a realistic target.

2. Have we committed more than 35% of our budget to one particular tactic, if so, is it justified?: I once had the misfortune of committing a large part of my marketing budget to running print ads in a particular magazine, specific to my target market. Unfortunately it didn’t go as well as planned, since then, I have made sure that committing a large part of the budget to one tactic or promotional activity is based on substantial research.

3. Have we established tactic specific controls?: As entrepreneurs we do not often have access to a lot of funds in our marketing budgets. It is hence essential, to ensure that control measures are established for every tactic, to maintain monthly or quarterly monitoring. If you notice the tactic is consistently not delivering as planned , adjust the plan accordingly. Having control measures in place also forces the responsible individuals to provide constructive feedback.

4. What is our expected return on investment (ROI) on our marketing budget?: This is a complex topic, and has been written about widely. To keep it simple, we have to look at our marketing budget as an investment rather than a cost. Whenever we make an investment, we look for a certain ROI to justify it. We must do the same for our marketing budget. Keep tracking your investments meticulously, and see how to improve on your investment to ensure your expected ROI. This must be discussed with the finance people at the company. I have found, they remain impartial and are able to see the forest from trees.

A well defined marketing budget can be the difference between, a good and a great result. If you have not developed one for your company, there is no better time than, now. It is important to keep in mind, that funds are wisely invested, and that you have the ability to adapt to feedback along the way.

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Marketing Tactics

“We can never have enough strategies. We have enough tactics but not enough strategies.” Matthew Dowd

After all the research and strategizing is done,  the strategies need to be translated into executable actions. It is important to remember that without the effort that goes into correctly identifying strategies for your business, marketing tactics will not work. Their success is largely dependent on how clearly and thoughtfully the strategies have been laid out. Once you have established goals, objectives and marketing strategies based on segmentation, positioning and differentiation,  selection of marketing tactics can begin. The first thing that comes to mind about tactics, the 4P’s ( Product, Price, Placement, Promotion ). The next thing that comes to mind is the lecture I had regarding them, then it becomes fuzzy.

I am all for structured frameworks, however, structured frameworks should enable you to develop executable strategies. If they become roadblocks, you have a problem. So keeping the 4P framework in mind you can devise tactics to drive sales and push your company further. These are four questions I like to ask when determining marketing tactics:

1. What is unique about our product/service that our customers should know?

For example, the MacBook Air did really well ( I really admire Apple’s corporate branding efforts). They brought out an ultra portable laptop and when it was revealed to the world, it came out of a manila envelope. Such a simple, yet effective introduction, made this product the talk of the town.

2. What is our price point strategy and why?

As mentioned earlier, competing on price is a losing strategy, one which entrepreneurs frequently use unfortunately. The inability to set correct price points can make or break a business. Pricing strategy must be based on comprehensive market research and comparison. Take a look at the competition,  then take a decision on how you want to be perceived by the market. Use pricing as a strategy to help slot you in a particular segment in the customers mind.

3. How are we going to get our product/service to our target segment?

According to objectives regarding volume, there needs to be identification of channels, to reach those targets. Do a thorough analysis of available channels of distribution, target those which can be used most cost effectively. However, keep in mind, the more channels you open up, the more resources required. Choose your channels carefully, focus on developing them to reach their potential.

4. How best can we promote our product/service to our target audience?

This is the segment that entrepreneurs need to get creative about. We usually don’t have large marketing budgets at our disposal, hence need to come up with ingenious ways to promote ourselves. One book which I would recommend to entrepreneurs with tight marketing budgets is “Guerrilla Marketing” by Jay Conrad Levinson. It is full of ideas which can be used by organizations on tight budgets.

These questions should help spark conversation,  and get you to think about marketing tactics to be used. Remember, remain focused on bottom line objectives, it is easy to slip into heated discussions about specific tactics and forget about end goals. Marketing can be simple and complex, it is advisable that at the onset of your entrepreneurial ventures, to keep things simple!

 

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Marketing Strategies

“All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” Sun Tzu

Strategy and tactics formulate the heart of a marketing plan. What happens is, these two sections are often thought of as one. This is a critical error. These two segments are interlinked closely, they do however, serve two very different purposes. The marketing strategy segment, uses marketing objectives discussed earlier, as end goals, which need to be achieved. In order to reach those goals it is not however advisable, to start planning how many brochures you require to be printed, or your next marketing seminar. Before you go into any of these detailed tactics, you need to take time out to think through the best ways to reach your goals. Some important points to keep in mind when developing your marketing strategies are;

1. Market Segmentation: Identify a niche in the market where you will be able to use your strengths to their maximum potential. I know first hand, treating everyone out there, as a potential customer is appealing. However, as a startup with limited resources, you need to focus on one segment initially. This will allow you to consolidate your efforts and resources. It is true, putting all your eggs in one basket may appear risky, but experience says, a startup needs to be focused from the beginning, getting distracted by other potential opportunities usually gets you into deeper water than can be handled.

2. Positioning: Once you have identified the segment you will be operating in, the next step will involve a most important aspect of your marketing plan; positioning. Who is your target customer and why? What benefits can you provide to them as compared to taking a completely different positioning stance? For example, If you are developing a new media company, have you positioned yourself in a manner which provides a certain segment more value?  Positioning will be a reflection of your organization identity. Make sure you do this step correctly, it has long term impact.

3. Differentiation: Once you have selected a segment, and certain market positions, you are likely to find direct and indirect competition. This is the time to think how you are going to differentiate yourself from the others. For example, if you selected the educational segment of the market for your company events and positioned yourself to specialize in planning graduation ceremonies, what will set you apart from other events and companies who provide the same services? Some differentiation points could involve the development of a unique alumni website or specialized gifts for every graduate. The last thing you want to do is, differentiate on price!

Use this section to develop a strategy which will complement the objectives that you have set for yourself. It is very important that these go hand in hand to ensure desired results. By selecting a narrow niche or one too overpopulated with strong competition, will make reaching your targets that much more difficult. Once you have outlined a strategy, you are ready to drill down to specific tactics through which your strategy will be deployed.

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Marketing Objectives

“The major reason for setting a goal is for what it makes you accomplish. What it makes of you will always be the far greater value than what you get.” Jim Rohn

Using the opportunities identified in the situational analysis post, we will construct the next part of the marketing plan, which includes establishing objectives. These objectives will serve as beacons to be used as guides when developing specific strategies. It is important that these objectives should be specific, measurable, attainable, realistic and time specific. Without clearly identifying targets, is like throwing darts blindfolded. Listed below are some broad segments, for which specific objectives should be established:

1. Market Penetration: Using data collected during the research phase, should give an approximate idea of the market share held by the competition. Sometimes this data is difficult to come by, in the past, my teams and I have drawn up simple lists of our major competitors when adequate information was not available. The point of this task is to identify the competition, and set realistic targets of where you want to be on that list. The important part is setting a target. GE set targets of being number one or two in a particular segment or exiting the business line.

2. Marketing Metrics: When setting yourselves objectives, it is important to use key benchmarks which you can continuously compare yourself with. These objectives can be pegged to major activities such as website traffic, newsletter sign-up rates, number of queries, pipeline activity, deal closings or sales staff turnover. These numbers will be a reflection of whether your promotional strategies are paying off or not. More importantly you can develop your promotional strategies around these numbers as well. If your current website is attracting a 1000 visitors daily, what will it take to hit your website traffic objectives of 2000 visitors? When establishing these metrics make sure they are realistic and attainable.

3. Financial Objectives: The company CFO is always wary of the marketing budget. The reason being, there are often no clear financial objectives justifying marketing plans. This section of your plan should outline specific financial targets that need to be achieved when devising your plan. This would include turnover targets, profitability targets as well as improvement of product/service margins. At the end of the quarter or year, there should be justification for the expenditure incurred on marketing. It is important for a startup with limited resources to think this section through carefully. Usually the opportunity cost is high, it is imperative that it is used correctly.

It is upto the team to set objectives in such a manner, that responsibility for certain key metrics and objectives, is person specific. It is that individual’s responsibility to continually monitor  progress and provide feedback to the team. This will create a culture where responsibility will be shared, and more importantly, will help the team realize the importance of good marketing. If you have developed a business plan, use this section to support the financial objectives outlined in it and make sure that your marketing objectives are in sync.

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Situation Analysis

“A man who does not plan long ahead will find trouble right at his door.” Confucius

Marketing was one of the more exciting classes I took at college. There was however, a part of the marketing course that required a massive amount of research and data collection. Looking at the title of this post, I remember vaguely, a class I took, where we talked about this topic at great length. I say vaguely, because in all probability, I must have tuned out when the word “macro economic factors” was used. Don’t get me wrong, finding out about macro conditions before entering a particular industry is critical. However, my only complaint was, the discussions were too detailed. I experienced this when we started writing our first couple of marketing plans as well. When you go into minor details, you begin to lose focus on the end goal, a balance needs to be maintained here.

Listed below are some of the critical things I look at when doing a situational analysis:

1. The Industry: Before going any further, you need information regarding the growth rate of the particular industry. What are it’s historic trends? What were the revenue figures for the segment? Have any major technological innovations taken place in it recently? Is the industry very segmented? These are some preliminary questions of interest and importance when looking at an opportunity in a particular industry.

2. Competitors: This is an important segment, one in which you need to document as many direct and indirect competitors in the market place as possible. Look at their teams, products/services, pricing and any other marketing collateral which you can find. Remain constantly vigilant about your competitors, this is a must for any company regardless of size. Create document files which can be referenced easily, this will come in handy during later sections, when you are positioning and promoting your product as well.

3. Distributors: Is the industry dependent on any major suppliers or distributors? If this is the case, then find out maximum information regarding their operations, team, pricing and discounting practices. Developing strategic partnerships with key distributors in the market place can become a very strong competitive advantage in the market place. Dell has executed this superbly in partnerships with Intel and Microsoft.

4. Internal Assessment: If you have already developed, or are in the process of developing a product/service line, this section will highlight where you stand in the current market place. Through this section, a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is available. This analysis will also help identify your strengths, and pinpoint where you should avoid competing in the market place.

Using data assembled in this section, you will be able to identify, where you face major threats and where the most opportunities lie. It will also help you gauge market demand with a closer and more precise perspective. This step requires considerable searching and scouring for data, do this as a team,  it becomes a little more exciting!

Related Posts:

- Market Risk

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What is Your Marketing Strategy?

“Business has only two functions – marketing and innovation.” Milan Kundera

I remember the time I was asked this question by a mentor some years ago. My answer included our website, brochures, name cards and some events planned out for our prospect market. He didn’t look too pleased with the answer, probed further, asking whether we had outlined our strategy in the form of a plan to help crystalize our concepts and ideas. Unfortunately, our marketing plan was limited to a couple of pages in our brief business plan. He then quoted the above statement, and said it was a serious error to not having devoted more time in thinking through this critical segment of business strategy. Since that day, I  place a lot more emphasis on marketing and have begun to fully comprehend it’s importance.

Rewinding back a bit, prior to this conversation, I realized, I had gravely confused sales with marketing. As such, there had never been a major emphasis on developing a dedicated plan around it. Marketing strategies were discussed on a very sporadic basis. We had thought that by developing a website, brochures and some name cards we were doing pretty well in the marketing department. Being a startup, we thought marketing strategies would be developed when we finally made it “big”. Once I got a reality check into this, I understood how skewed my thinking had been. It finally started to make sense. I realized why demand did not scale up as projected, as also why the perception of the product in the market place was contrary to how it was meant to be perceived. We had completely ignored and bypassed one of the major functions of any business.

The following series will be one of many, where I will begin outlining a basic marketing plan for startup development. It will give you a bird’s eye view of major components which will be discussed in greater detail in the following weeks. I hope that through the information provided, you will be able to answer the above question with more confidence. I would also really like to learn about some of the marketing strategies which you may have used at your startup. This will help create a pool of ideas which can become an invaluable resource to entrepreneurs all around the world.

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5 Steps to Change a Habit

“When you sow a thought you reap an action, when you sow an action you reap a habit, when you sow a habit you reap a character and when you sow a character you reap a destiny.” Anonymous

Embracing change poses a challenge to most of us. Our comfort zones have the ability to make us feel just that, comfortable and at peace. Stepping out of these zones is a frightening experience, at the best of times.  Venturing into spaces where you need to find your bearings all over again is daunting . The task is arduous at the onset, it doesn’t get much easier along the way either, however, when you have successfully enlarged that comfort zone, the feeling of accomplishment is unparalleled. This week, I talked about a couple of steps which can be used when wanting to change or develop a new habit. I felt it was important to talk about this, because being an entrepreneur requires you to be flexible and open to change. It requires you to change limiting habits and beliefs, which may be pulling you back. Listed below are five steps which may be of help in this process:

1. Identification: Before we commit ourselves to “change”, we need to make sure our unconscious desires connect with the conscious ones. Clarity about what you want to change is essential. Asking yourself what you want to change about yourself is a powerful question, use it to crystalize your thoughts. To read more about identification of limiting habits/beliefs please click here.

2. Ask yourself why: Once you have identified the change you want in your life, the next question is, why do you want to change? This discovery process is essential, to grasp the fundamental reasoning behind the change you want to see in your life. Without this process of understanding , you may discover that you approached change in a particular habit, for the wrong reasons. You may discover that you never really wanted to change this particular habit, hence, you had not found a strong enough reason to motivate the change. To read more about asking yourself “why” please click here.

3. Make a plan: To successfully start a transformation process, you need to outline a plan. One which will be documented, and have clearly marked time lines. It is important you take into account any triggers which may lead to lapsing back to old habits.  To read more about making successful plans for changing  habits please click here.

4. Taking action: We can plan all we want, in the end, it all boils down to taking action. This step requires courage, determination, and above all, belief in your capabilities to bring about change. Life is too short to expect those around us to change, or, to stand still and hope that things will become better. The first step towards wanting to bring in change, is to take responsibility for your life. It boils down to you, and how committed you are, to wanting change in your life. To read more about taking action please click here.

5. Maintaining change: Once we have taken that first step towards bringing change into our life, we have begun a journey. To help us maintain the change that we have brought into our lives some of the things which can help us are, keeping a daily log, developing a support system and rewarding ourselves whenever we reach small milestones. These activities will help keep you motivated when the going gets tough. To read more about maintaining change please click here.

Time is the most precious asset we possess. Everyday is an opportunity for you to bring about the change that  you want to see, in your life. In the end, it boils down to your level of determination and persistence to be the change you want to see. I love the Adidas quote “impossible is nothing”. Maybe that could be a mantra for your next habit change? Best of luck!

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Maintaining Change

“We are what we repeatedly do. Excellence then, is not an act, but a habit.” Aristotle

Once we have taken that first step towards bringing change into our life, we have begun a journey. Like most journeys, this one will have its share of ups and down. There will be times, when you will want to go back to the way things were, and there will be others when you feel lost and alone. Embracing these feelings for what they are, is an important step on this journey. If we let our emotions hinder our capabilities to move forward, we will find ourselves trapped, and unable to bring about the changes we want to see in our life. There is no doubt, we will fall many times, to fall is only human. What matters is whether we have the courage to pick ourselves up, and keep moving on.

Listed below, are a couple of pointers which have helped me carry on, when the going was tough:

1. Keep a daily log: This simple activity does not require you to write pages of detailed specifics. Its primary purpose, is to help you understand the transformations which are taking place in your life on a daily basis. As a secondary purpose, it serves as an outlet which allows you to express your thoughts and emotions.

2. Support systems: When we are undergoing drastic changes in our life, we need to identify an individual or a group of people, to rely on to help you through this period. Better yet, taking someone on board who also wants to change or inculcate the same habit, is ideal. This way there is someone to identify with, who also understands what you are going through. This emotional bond sometimes creates a force strong enough to overcome just about any obstacle.

3. Reward yourself: This is a tip I use a lot when going through change. It provides incentive to push yourself further. The sense of accomplishment when you are rewarded for your efforts, is a great boost as well. This also helps create a momentum that is infectious, and soon you find yourself hitting goal after goal. Choose your rewards carefully,  they play a major role in motivating you to go further.

Sustaining change is a challenging task. We have to constantly keep reminding ourselves why we want to change, and what we hope to achieve, once we have changed. The rationale behind the reason for change must be based on solid foundations. Without this base, reverting to older habits is more likely, and no one likes to admit failing. However, after having said that, there will be times, when although the reasons for change are based on the strongest of foundations, we still fail. At this point, it is best to go back and understand the reasons again. Was a trigger missed ? Does the plan need changing ? The minute we start blaming our inadequacies, is when we lose hope. Look for reasons , not blame.

Remember there is no such thing as failure only feedback!

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Taking Action

“Whatever course you decide upon, there is always someone to tell you that you are wrong. There are always difficulties arising which tempt you to believe that your critics are right. To map out a course of action and follow it to an end requires courage.” Ralph Waldo Emerson

We can plan all we want, in the end, it all boils down to taking action. This step requires courage, determination, and above all, belief in your capabilities to bring about change. Life is too short to expect those around us to change, or, to stand still and hope that things will become better. The truth is, once you sit on the fence for too long, it becomes comfortable, and taking a decision becomes a lot harder. In my own life, there have been times when I have been guilty of such behavior, we all have. However, what has happened in the past remains there, what is important is, that we don’t make the same errors today. If you have decided that something in your life needs changing, and have figured out what it is, and how you plan to change it, then you need to do, just that.

The first step towards wanting to bring in change, is to take responsibility for your life. It boils down to you, and how committed you are, to wanting change in your life.  For example, we are constantly bombarded about the side effects of smoking, in Singapore, they even have gruesome photographs on cigarette packs of what it could potentially do to you. The mind however, is such a powerful thing, that these images are subconsciously blocked. By remaining undecided and continuing to sit on the fence,  it may well be too late when you decide to take action! I accept that it is lot easier for me to say such things because I don’t smoke, I realize that giving it up is a very difficult process and one which requires a lot of discipline and determination. I believe however, that to find courage to take action, sincere and convincing arguments need to be understood with an open mind. Fully comprehending the negative impact of this habit is vital.

Along the way, curved balls will be thrown at you undoubtedly. Certain triggers will appear repeatedly, the urge and need to revert back will often be too strong to resist. However, if you have been strong enough to take that first step, with all the right reasons and intentions, half the battle has already been won. The theory of “Ready, Fire, Aim” is one which I believe in completely, it forces you to take action. There will always be fears and doubts regarding the outcome of an action, the important thing is, that you have taken that first step. Once you have begun to take consistent action, it is now, only a matter of maintaining a momentum to help you reach your goal.

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Planning to change?

“Reduce your plan to writing. The moment you complete this, you will have definitely given concrete form to the intangible desire.” Napoleon Hill

After we have identified the change we want to bring in, as well as the reason for it, we need a road map on how to implement this change into our lives. This is another critical process which requires substantial time. It is easy to wake up one day and tell yourself, you are going to change from tomorrow. This is easier said than done, whenever I have used this technique, it takes around 3 days to go back to old ways. What your mind needs, is direction. It knows the reasons to change, it also needs to be told how to get this change going.

 An effective plan for habit change, is better for the following steps :

1. Documented: A transfer of ideas and plans onto paper is essential. This is an obvious first step, however, most of the time we neglect to do so, thinking it to be trivial. Before starting any change, write down what you want to change and why you want to do so.

2. Time Specific: Setting yourself targets spread over extended periods of time (months, years) is not an effective strategy. Commit yourself to a realistic but challenging timeline, to help you start seeing results.

3. Identify Triggers: Most habits are triggered by specific activities or emotional states. Do your best to identify these triggers as soon as possible. Once you have list of triggers, you will need to compile a list of alternative actions that need to be taken in place of this habit. For example, if your smoking is triggered by the completion of a meal, replace the cigarette with some nicotine gum or green tea. This is a key component in developing your strategic plan.

4. Create Mini Goals: As humans, we need to be constantly motivated, to continue moving forward. Therefore your plan may be broken down into mini goals, which can be rewarded when acheived. This will help keep your motivation at a higher level.

Using these basic components, plan how to go about your day. This doesn’t need to be very detailed, it just needs to be specific enough, so you can monitor your progress. By developing a plan, you will have a guidance system, which helps keep you on track, and provides you with the necessary motivation to wake up the next morning, fully aware of the steps you have to take, to change that habit!

 

 

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