Three Things You Must Do to Grow Your Business

By Michael Masterton

To grow a business, there are three things you must do. First, develop a good, marketable product. Second, learn how to sell it. Third, keep doing the first two things even when you’d rather not.

In the beginning, when there is nobody in the office but you, all three responsibilities may be yours alone. Later, as the business grows, you may find someone or several people to take over one or two of them for you.

A perfectly balanced business might have three top executives: a pusher, an idea man, and a marketer. Each would be a master of his skill. The pusher would be relentless in moving the business forward and encouraging everyone to do a good job. The idea manager would know the product completely, understand how and why the market uses it, and make adjustments to it so that it would always be attractive to buyers. The marketer would sell the product at the right price, the right cost, and in sufficient quantities to keep the gross profit where it needs to be.

Think about your own business or profit center. Who is responsible for each of these critical functions? Is that person masterful /competent/adequate to do the job? If less than masterful, is he on his way to mastery?

Of the many businesses I work with, none has all three functions "mastered."

Typically, you have a mixed bag: a good marketer who is also a good pusher running the business himself. Or a masterful product developer (idea man) who partners with a good marketer but has no one to do the day-to-day pushing. I know of one business that has neither a good marketer nor a good idea person but gets by (somehow) by virtue of its CEO’s pushing inexperienced people to try mostly mediocre product and marketing efforts.

Imperfectly balanced businesses can succeed, but you’ll reach your maximum potential only when you have become masterful at generating good ideas, selling them, and pushing everyone to do a good job.

In The Tipping Point, Malcolm Gladwell says that social epidemics (including business breakthroughs) usually involve the input of three types of people: sellers, mavens, and connectors.

In Gladwell’s analysis, the maven equates to the idea man. He is the one who learns something — an idea, skill, technology, methodology. or even just a perspective — that the world finds valuable. If you need something done, he is the guy that can make it happen. The seller, of course, is the person who persuades the world to buy this new idea, skill, etc. And the connector makes it all happen by hooking up mavens to sellers to buyers.

There is an obvious similarity here between marketers and sellers; mavens and idea men, and (less exactly) connectors and pushers.

If you are in charge of a business or enterprise, assess the strengths and weaknesses of your executive leadership according to one of these two similar models. If you are an employee, think about which one of these "tracks" appeals to you.

To make your company grow and improve, make your three top leaders grow and improve. (And this includes you.) To accelerate the success of your own career, make sure you are on track to becoming a master of one of these functions.

By Michael Masterson

The Power of Price

The Power of Price
by Paul Lawrence (03/14/2008)

When I was in college, I was desperate to find a way to make some money. And I wasn’t crazy about the idea of working at the usual part-time, minimum-wage jobs available to students. So I came up with a business plan and put it into action. One hot summer day found me trudging from door to door, passing out flyers and praying that I would get some customers from the effort.

By the time I returned home, I’d received my first inquiries. And those quickly resulted in my first customers. Within a week, I had a business that was earning more money than I needed. Within a year, that business earned over $100,000 in profits. Not bad for a college kid living at home with his mom!

That first successful start-up was a pool service. Since then, I’ve launched more than a dozen very profitable small businesses. When I analyze what made those businesses successful, I can pinpoint several reasons. But my pool service was successful because of one business strategy: price.

I got people’s attention by offering a monthly rate that was 20 percent lower than the competition. On top of that, I had an introductory "special."
Michael Masterson says that underpricing the competition may be "the most important secret a businessman can know, for it is the most powerful and most reliable way to make a small business grow." It’s also one of the best ways to enter a market and grab a share of the customer base.

When it comes to consumer merchandising, a small business can’t compete with giants like Wal-Mart. But a new service business can usually offer a better price than larger established companies providing the same service. That’s primarily because a small start-up can keep overhead low and sometimes accept a smaller profit margin. So if you can operate your small service business out of your back bedroom, without hiring a lot of employees or needing a lot of fancy equipment, you can almost certainly afford to underprice the competition.

But just because you enter the market with the lowest price in town doesn’t mean you stay there forever. For example, one of my entrepreneurial ventures later in my career was a ballroom dance instruction business. When I entered the market, I was a one-man operation, and I offered lessons at $29 when most studios charged $60. Sure, I made less money per lesson, but it was still pretty good money for me at the time. And once I had a nice little client base, I gradually inched up to the going market rate. That allowed me to hire other instructors to teach the lessons… and freed up my time to develop additional sources of income.

I already had considerable experience as a ballroom dancer - and teacher - before I decided to go into business for myself. But with the pool service business, the only "skill" I needed was the willingness to do the work. So let’s go back to that example so I can show you how well the underpricing strategy works.

Here in South Florida, where I live, the average monthly rate for pool service is about $65. In this particular industry, an account is generally worth six times the monthly gross. So an average pool account would be worth $390.

But let’s say you decided to get into the business by undercutting the competition by $15 a month. That means your average account would be worth $300. That’s a difference of just $90. Would you be willing to give up $90 a month to get a loyal, long-term customer?

And you’d only have to give up that $90 for the first six months. I can tell you from experience that if you do a good job of servicing your pool customers for six months and then raise your price by $15, at least 95 percent won’t drop you. In fact, most of them will feel that they got a bargain, because they enjoyed a very low price for a reasonable period of time. It’s not like you low-balled them and then jacked up the price right away.

And, let’s not forget that you were still making money on all those initial $50 accounts… just not as much.

Here’s how to use this strategy to start a small service business:

* Identify a service business where you see a chance to compete on price
Some of the easiest service businesses to get into are house cleaning, lawn maintenance, exterminating, and car washing. Services like these are often offered by big operations that have been in business a long time. But they tend to have big overheads, and aren’t hungry for new business, so their prices are somewhat inflated. Crunch the numbers and see if you can offer the same level of service at a better price.

* Create a marketing campaign that emphasizes the price savings
Whatever advertising medium you choose, make sure the discounted price is mentioned prominently. For the pool service business, I used flyers and direct-mail pieces. But for the ballroom dance business, I started with classified ads in newspapers and the local Yellow Pages.

A good way to emphasize the savings is to show how it adds up over time. For instance, in the pool business, I didn’t just tell prospective customers that they’d be saving $15 a month, I pointed out that they’d be saving $90 over six months.

One thing to keep in mind: Make sure your customers know they won’t be getting a lower standard of service from you. Explain that you can provide high-quality service with a lower price because, for example, you’re doing the work yourself and have practically no overhead.

* Be ready to begin operations immediately

When you launch a marketing campaign that offers a greatly discounted price, you can expect to get customers ready to do business with you in as little as a few hours. So make sure you’re prepared. Providing the promised service efficiently (and well) will assure your profitability.

[Ed. Note: Paul Lawrence is the creator of the Quick and Easy Microbusiness System, ETR’s program for starting a business for under $100. He is also the publisher of the Street Smart Business program, which has dozens of "no nonsense" tactics for the small-business entrepreneur. Check out the details here.]

This article appears courtesy of Early To Rise, the Internet’s most popular health, wealth, and success e-zine. For a complimentary subscription, visit http://www.earlytorise.com.

Small Country Becomes First in South America to Offer GAC

Suriname, a small country on the northeast coast of South America, has become home to the first Global Assessment Certificate® (GAC) program in the region.

“We are very delighted to be the Caribbean and South American leader in this critical and essential process of finding genuine leadership solutions for young international students who are college bound,” said Sean Taylor, principal of the AlphaMax Academy in Paramaribo, the capital city of Suriname.

GAC is ACT’s university preparation program that is taught and evaluated in English. It gives international students the skills they need to enroll in and succeed at English-speaking colleges and universities. Successful completion of the program guarantees entry into many GAC Pathway Universities in the United States, Canada, United Kingdom, Ireland, Australia, and New Zealand. The program is currently offered at 38 locations in 12 countries.

AlphaMax Academy, a private, nonsectarian international English school, offers classes in grades K-12 to nearly 70 students. Staff consists of 15 teachers, including professors from the Anton de Kom University of Suriname, where students conduct laboratory experiments in physics, chemistry, and biology.

Choosing the GAC was a long process, said Taylor. “We took our time—at least two years—seeking out and researching various programs. In the end, after research, deep thought, and reflection, we selected the GAC based on our existing relationship with ACT.”

The academy has been an ACT test center since it was established in 1998. Eleventh- and twelfth-grade students can take the ACT at every international test date. Their average score has been 24 and their top score 31 (on a scale of 1-36).

The GAC program began in October 2007 with six of the twelve students who expressed an interest in the program. Ros Washington, ACT Education Solutions curriculum manager and regional academic manager based in Australia, was at the school early last fall to train faculty and staff and assist in program implementation.

“AlphaMax Academy officials are very serious about the value of the GAC,” said Washington. “They say the GAC program is just what the Caribbean area needs because it develops not only academic skills and strategies but also, most importantly, the soft skills students need to succeed in tertiary study abroad. These are not always addressed in the normal school curriculum.”

The academy, whose motto is “in diligent pursuit of excellence,” was founded by a group of academics who saw a need for an institution that could “provide students with an education that develops their innate qualities and gives them an edge in their future pursuits.” The school is dedicated to individual attention and has an average class size of six students. It offers an “interactive academic environment to ensure quality, good student retention, and an insistence on good performance on internationally accepted, external, American examinations.”

The academic program focuses on cultivation of solid classical, foundational learning skills within the wider context of plural, multicultural, developing societies. There are concrete plans to establish other sister institutions across the region.

Since the academy’s first graduation in 2001, 80 percent of graduates have gone to college—locally and abroad. The government of Suriname has awarded scholarships to several students for study in the United States, Mexico, Venezuela, Holland, and Cuba.

Roughly the size and shape of the state of Georgia, Suriname lies on the northeast coast of South America, bordered by French Guiana in the east, Brazil in the south, and Guyana in the west. It is a multicultural and multi-religious country of 450,000 people. Though Suriname gained independence from the Netherlands in 1975, it retains a strong heritage of Dutch traditions and architecture. Given its rich ethno-cultural diversity, Suriname is often called the ‘mini united nations’ of the region. There are 20 distinct communities in Suriname – each with its own language – although Dutch remains the country’s official language.