Copyright © Dr Graham Ward 2019
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appeared in the July Issue of The Great Guide and can be downloaded under the “Back Issues” tab. To make sure you don’t miss the next steps, please subscribe to the website or you can order the book directly from Dr Ward
HOW TO IDENTIFY A BUSINESS OPPORTUNITY
You need not be an inventor; you just need to be an innovator
One of the major reasons why people do not start a business of their own is because they believe that they are unable to come up with a “brain wave” idea which will “rock” the world. Most people believe that unless they are able to come up with a “unique invention”, they will never make it in the business world. The truth is that the competition is likely to duplicate your ideas at some point or another and so you will need to constantly have to be on the lookout for fresh and exciting ways to carry out the business you are passionate about.
Almost all the businesses I have started, I looked at how the competition was solving problems for Customers and I thought up different ways to solve these problems. I realised early on that all I needed to do, was to find a niche market that could sustain the income stream I needed. A niche market is a small section of the whole market which my products or services could solve problems for.
The notion that a business concept has been done before should never put you off entering a particular market. You have to find a way to fulfill a particular niche in the market with your unique problem-solving abilities.
Find different ways of solving problems for your Customers
Once you realise that you make money by providing products or services which solve problems for others, you will begin to see opportunities abounding around you. The real question is whether you have the passion and drive to want to start a business to capitalise on an opportunity you have identified?
Some of the techniques I have found helpful when trying to identify business opportunities are:
- Identify problems you may have and try to find solutions to these. As I go through my day, certain things frustrate me and I wish there was an easier way or a solution. The way I see it is that if I am frustrated, then others are as well. Better still, if I am able to solve my problem then I have a potential business model which people would be prepared to pay for and I could make money from the solution/s I provide.
- Read local newspapers and try to understand if there are products or services you could offer, to solve the problems or opportunities you are reading about.
- Stand back from the crowd. I often tell students to look at a group of friends they are with and step outside the group for a few minutes. By observing the behaviour of the group, you will quite often see things in a different way and this could lead to opportunities for starting a business.
- Take a different route home from college or work one day. Along your travels, you will be amazed at how this will open your eyes to new opportunities.
- If you do things the same way each day, you are likely to end up with the same results. So try to do something different once in a while. An example could be taking up a new hobby or calling on an old Customer.
- In his book, “Rich Dad, Poor Dad”, Robert Kiyosaki, coins the concept of “working for free”. The author argues that by working for free you remain open to opportunities which employees working for a salary, cannot see.
- Question everything and continuously ask yourself why things are done one in a certain way. In other words, look at things from different angles and try to see if there are other solutions that have not been provided yet. These alternative solutions could be opportunities for a new business venture.
- Take a walk outside and observe things. You might see a house which needs painting or rubble which could be removed from a building site. Some of these opportunities could be the start of a profitable business.
The trick is to choose the right opportunity
Money will almost always be a motivating factor when selecting an opportunity to start a business. Once you have identified a number of opportunities, try to find out which one you are most PASSIONATE about and set about pursuing it with enthusiasm. Having said that you will also need to look at the size of the market you intend serving and decide whether the income you could make, by gaining a share of the market, would be enough to sustain the lifestyle and expenses you have.
Once you have made your decision to pursue your idea, remember that the pride you have for your products or services will not go unnoticed by your Customers and they are likely to return to enjoy your enthusiasm. They will also remember the great attention you gave when serving them.
THE MAIL ORDER BUSINESS
Adapted from the book “Think and grow rich”, by Napoleon Hill
I was browsing around a book store and bought a book written by a fellow called Napoleon Hill. The book was called “Think and grow rich”. As my memory goes, the book had seven chapters and described in detail how to make a fortune from the mail-order business model. The first six chapters gave a detailed step by step guide as to how to select or develop a product, which could easily be mailed via the post to the consumer. I remember Napoleon Hill, describing that the product should be light enough to be mailed and that it should still be attractive with a 500% mark-up.
The problem I faced was what product to sell, which would be good enough to have the public post their money in advance by cheque. It was late in the evening and I was tired when I finished the book. As I held it in my hands, I read the front cover again: “Think and grow rich”. Then it struck me, I had to THINK in order to grow rich. So I slept on the problem of what product I could create or buy and re-sell, which would meet all the criteria set out in the book. If I could get this right, I would be in line to make good money!
Once again I turned to my Dad for his advice and he also became excited about the simplicity of the mail-order concept. The challenge we had was that we did not have a unique product that conformed to the principles Napoleon Hill was prescribing. I recall sitting with my Dad after work one day and we began to brainstorm about a product we could make or resell which would capture the attention of a magazine reader and hopefully entice them to post their payment cheque in advance for the goods.
After a couple of beers, our creative minds began to kick in and we came up with the idea of a “leather desk mat” people could place on their desks at home or at work. We believed people would like the soft feel of the leather as they wrote letters – in those days electronic typing on a computer was not that common.
We were fortunate because as it so happened, my father worked for a tanning company which specialised in footwear leather. I made up a burgundy coloured sample from an offcut from the tannery. In the end, our prototype was about ten centimeters wider, on all sides, than an A4 page. To make the product more attractive and appealing, I used a gold pen to create a border around the edges and managed to source gold corner fittings to give it an exclusive classy feel.
So far we had met the specifications laid down by Napoleon Hill. Our desk mat was light enough to send via the post and we had also met the criteria of being able to mark the product up by 500% and we believed it was still attractive to the customer. However, we felt the desk mat was lacking “the wow factor” which would ignite readers to write out a cheque and post in their order.
We took a few more days to think about the prototype and then we realised that our product would be ideal as a birthday gift. By offering to stencil the initials (at the bottom right-hand corner) of the person the gift was intended for, we felt this added a nice personal touch to the product. We finally felt confident that the magazine readers (mostly women) would purchase the personalised desk mat we had developed, as a gift for their husband or a friend.
However, there were also quite big risks in launching this desk mat as a mail-order product. One of the major problems was estimating how many desk mat sales we would get, as this had a direct bearing on how much leather we would need to order from the tannery. We also needed to factor in the time it took for the tannery to make the finished leather skins. The tannery had a six-week manufacturing lead time, which meant we would have to order the skins well ahead of the date the magazine was to be published. A further problem was the capital outlay my father would have to risk paying for the leather upfront. If we did not make the anticipated sales, we could end up with a large amount of leather in our garage, which we would have no use for. To top matters off, there was still the cost of purchasing the advertising in the magazine which also required upfront payment. I began to feel despondent that all our product development efforts would not amount to anything. It seemed as if the risks of the mail-order business model outweighed the rewards. We were at a dead end unless we could find solutions to these problems.
Having gone this far, as a last resort, I decided to send the prototype sample of the desk mat, to a prominent magazine to see if there was anything they could do to assist us with launching our desk mat concept. To my surprise a few days later, the editor of the magazine called to say that they were impressed by the innovativeness of the desk mat and wanted to feature the product in their “entrepreneur section” of the magazine. Even more exciting was that they were willing to give the advertising space in their magazine for free!
I was very impressed by how well they understood their magazine readers, initially estimating that we would sell around 2,000 units of the desk mat. However, they felt that our initial price was a bit high, so we took their advice and reduced our mark-up from 500% to 250%.
Based on the magazine’s predictions as to how many desk mats we would sell, my father took the risk and placed the leather order with the tannery. We waited patiently for the magazine to “come to the shelves”. Each day, from the day the magazine was available on retails shelves, I would walk up the road and check the post box. These were tense moments, hoping that readers would react favourably towards our desk mat product and post their payment cheques in advance.
I continued to check the post office box daily and on about the tenth day, I unlocked the front panel and the box was overflowing. I could not believe my eyes. The orders started arriving and better still, as my father put it, each envelope contained advanced payment cheques which he deposited. I emptied the post office box each day for the next two weeks and each night I would cut the leather skins, create the gold border, add the gold corner fittings, and stencil in the initials the consumer had requested on the bottom right-hand corner. My Dad’s task was to do the banking, create the labels for the cylinder containers, and post our proud hand-made product to the magazine reader.
The magazine editor was almost spot on with estimating how many orders we would receive. If I remember correctly we received around 2,200 requests for our desk mats. The product was so successful, I can still see the words my father used when we were unable to fulfill an order as all the leather had been used up. They were: “Due to an unprecedented response to the advert, we regret we are unable to fulfill your order”. Naturally he sent back the payment check to the customer, secretly proud of our success.
What success all our hard work had turned out to be! We made very good profits from our creative desk mat product and for this, we owe great thanks to the magazine for the free editorial they gave us.
Lessons to learn…
As Napoleon Hill puts it in his book: “THINK and grow rich”.
- If you consider the needs of a specific market, you can become creative in ensuring your product or service meets or exceeds their needs, at a profit.
- Every business idea will have problems which will need to be solved creatively. If you put your mind to these problems you can achieve amazing results.
- Never give up. You are always able to ask for advice and help. You will be surprised at how a positive attitude can bring you good fortune.
- By taking risks in business you open yourself up for rewards which are usually in the form of profits.
Step 3 will appear in the August issue of The Great Guide, or you can order the book directly from Dr Ward for R50 per electronic copy. You can contact him by email – email@example.com