5 Rules to Monetize your Business Idea
Oct 04 2012, 20:30 | By SME Mentor
Book Review: The $100 Startup by Chris Guillebeau
It's every yuppie's dream today -- quit your job, launch your own start-up and be your own boss. Chris Guillebeau's The $100 Startup can help you go beyond just thinking. Packed with real-life entrepreneur stories and handy tips on starting a business from scratch, it features 'solopreneur' success stories collected by the 35-year-old author on his travels around the world. For those wanting to go it alone, here's a brief look at Guillebeau's five-step guide to monetising ideas and turning a passion into income.
1. Keep debt to a minimum: Entrepreneurs looking for advice on how to start their own businesses are likely to be bombarded with tips on funding and finance. Guillebeau offers one overriding suggestion - whatever you do, do not dig yourself deep into debt. "Since it's easy to try things without losing your shirt, why seek investment and go into debt for something that may or may not work?" he says. In his book, Guillebeau has identified hundreds of entrepreneurs who invested $100, or less or had no initial funding, to start their own ventures.
2. Find the right business plan: This book helps you organise your thoughts on business ideas and identify the right model for you, through its questionnaires and decision-making matrix and one-page business and promotion plans. Other quick-start guides include a 140-character mission statement, one-page partnership agreement, 39-step product launch checklist and instant consultant biz guide.
3. Learn as you go: When you're ready for launch, always remember, "The first $1.26 is the hardest. So find a way to get your first sale as quickly as possible. Then work on improving things that are working, while ignoring the things that aren't," Guillebeau cautions. He says the most successful entrepreneurs "sell happiness (benefit) instead of merely describing... business (features)". Thus, instead of offering horse rides, offer customers the chance to be cowboys for a day.
4. Understand your target market: Target markets today have nothing to do with demographics in the traditional sense, says Guillebeau. A target group today can consist of people from a wide range of backgrounds, ethnicities, locations and income brackets who have one thing in common - an interest in or need for the product / service / experience / community to which you offer access.
5. Don't lose sight of the bottom line: Yes, a social media presence can be important, Guillebeau points out, but an entrepreneur must never lose sight of his true goal - not popularity, not likes, not buzz, not chatter, but profit. "You have to make sure your recurring activities are as directly tied to making money as possible," explains Guillebeau, who quotes London-based consultant Naomi Dunford who runs IttyBiz as saying, 'There is nothing wrong with having a hobby, but if you want to call it a business, you have to make money.'
The $100 Startup also includes tips on hard-selling, re-pricing products and getting paid for the same product over and over. Guillebeau also offers advice on scaling up operations - or making up your mind to not grow up at all. The footnotes are also an interesting source of further reference material. So if you're ready to stop planning and get moving, this is a great guide. As Guillebeau writes: "In the battle between planning and action, action wins."
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