In the world of business there’s literally something blog worthy every day, and it was my intention to blog at least once a week (I have failed miserably). I find time is exceptionally tight these days as I’ve taken on some new projects. I expect I’ll seldom post more than once every few months for the next year or so, but I’ll try to make the posts full of adventure, intrigue and romance. Uh… or not.

-Cam

So you’ve come up with the perfect idea. You’ve given it copious amounts of thought and you’re certain it has viable business potential. You can easily envision yourself building a business around the idea and you are, to put it mildly, manically euphoric. Great start! What’s next? Easy- figuring out if there’s a market for your business and understanding the gentle art of cramming yourself into that market.

The Market: In this case “the market” isn’t a physical place. Rather it’s a idealistic representation of an economic cycle (i.e someone sells something, someone buys something, and so on).

Let’s say your idea is to sell some type of product: shoes (don’t scoff- visit Zappos.com). The question is simple: Is there a market for shoes in which you can sell the and a customer will buy them? One quick look around reveals that, yes,  there is a huge market for shoes. The idea has “Cam’s Business Idea Approval” (that’s a CBIA for future reference).

Okay, that was easy. Now let’s complicate things a bit.  What if you want to sell shoes with a type of new super sole you’ve developed? Is there a market for that? Looking around may not help as much in this case because (obviously) no one else is selling a shoe with as much soul as you (those puns just come out of nowhere). There is, as we have already noted, a strong market for shoes. If your product is part of a larger market and is better than existing products then there is a market for it. This is a great segway into…

Visible Advantage: This terms, as I use it, refers to anything that potential customers see as a reason to purchase from you as opposed to a competition. Lower prices, larger inventory, faster shipping, more articulate product descriptions, hot babes, anything that distinguishes you in some positive way from your competition. Generally your advantage comes from doing something better than others in your market. The idea of a visible advantage is incredibly obvious, but I’m floored by how often companies overlook or misunderstand this necessity.

Cam: Sure, I think selling ties could work. What’s your edge?
Client: We’ll have a website!
Cam: Okay. And what advantage will your website have over other tie websites.
Client: It will be on the Internet.
Cam: Oh… uh. Well, other websites that sell ties are online too.
Client: We’ll have Tomy Hilfiger ties. My brother wears them. He always says, “If it’s not a Tommy, it’s not a tie!” They’re popular.
Cam: Other competing websites will probably carry the same brands of ties. Is there anything unique you’re going to do to set yourself apart?
Client: Well, we’re going to sell a lot of ties.
Cam: Sigh.

Visible advantage is what allows a company to enter and succeed in an already crowded market. The result is simple: The market expands to accommodate the new business or the market remains the same and a company with no visible advantage goes under. You want to sell shoes? As long as you’re better than your competition in some way people will buy shoes from you. Once you can define your advantage and once the customer is aware of it you’re on your way.

Visible advantage is also what allows you to enter and succeed in an uncrowded market. If you’re the guy with the new shoe sole that that is your advantage. It’s your job to make sure the customer understands why your sole is better and why they need your shoe. When you focus on a small part of a larger market you’re working in a niche. A niche can be a an excellent visible advantage.

To recap: You have an idea. You identify your market and your competition.  You build your business with a visible advantage over your competition. Angels sing your praises and you drive off into the sunset in a green Lamborghini.  I can’t tell you that any of this is easy (those Italian sports cars are hard to drive!), but it’s straightforward, it’s simple and it works.

-Cam

A couple of thoughts that will be part of the next post:

• A visible advantage isn’t doing something someone else is already doing- it’s doing it better
• In a crowded market you don’t have to be the best- it may not be practical. However, you must be better than the worst.
• In a niche market you should strive to be the best.
• One visible advantage is a start. The more you have the better you will do.
• Even if you become the best don’t pat yourself on the back. Someone somewhere is gunning for you.
• If you’re successful and you’ve never heard heard of this visible advantage nonsense, then you have a visible advantage.

This post is CBIA certified.

So you want a business huh? You want to build the next Microsoft, become the next Donald Trump and marry the latest popular arm ornament. Where do you start? I’ve got a great idea- start of the beginning. Where’s the beginning? Hang on tight, becuase I’ve got the answer. The beginning is the idea.

As I talk with potential customers [*1] about running a store, the thing that frustrates me the most is that they want to start their business in the middle somewhere. Lunch conversations have literally gone like this:

Customer: How do I do order fulfillment- do you think UPS or FedEx is better?
Cam: What are you selling?
Customer: Well, my buddy makes these little wooden puppets that kids seem to like. But maybe that’s dumb. Maybe we could sell something else. Maybe wooden hats.
Cam: Well, it’s important to figure out what you want to sell.
Customer: We’ll probably go with the puppets. But it’s hard to get to get these things off the ground, you know? I mean how will we find time to do advertising?
Cam: Well, the first step is to decide what you want to sell.
Customer: Is advertising hard? Do you think we should use Google?
Cam: I’d say the first thing to do is decide what product you want to market.
Customer: Well, one thing I know- we’ve got to sell something good. I hope we can find a cheap place to rent for a store. How much does your store cost?
Cam: I hate you and you’re lucky this fork is plastic.

Times are tough now. You can’t simply announce that a great idea will be forthcoming and have venture capitalists begging you to take their money. From what I understand this was the case a few years back, and now companies built on the idea of an idea are completely gone. Nice work there. So let me drive this home again- you start your business by thinking of an idea.

The idea itself can be anything. Maybe you have the great idea for a world changing invention (way to go!). Maybe your idea involves buying some spiffy niche product wholesale and reselling it (works for me!).  Or maybe you can provide some incredible service that everyone wants (make it free for Cam!). Lie in a hammock, brainstorm on paper, harass your friends- just find the idea.

Now you have to ask yourself an important and potentially uncomfortable question: Can i build a business around my idea?  Let’s say you love pickle and jelly sandwiches. No one makes a better PJ sandwich than you! Maybe you should open a pickle and jelly sandwich shop, right? But in the nick of time you realize that no one else on earth will eat your sandwiches.  Sometimes common sense is all you need for a business evaluation.  Other times it takes a little more work.  You need to churn your idea around. You need to imagine how a business could function around it. The idea has to be viable enough so that it can support an infrastructure of processes (processes are big- we’ll talk about them one day [*2]) to reach a desired goal (usually money!).  And even after you figure out everything in your head, you may not know an idea isn’t viable until you’ve started working with it.  We’ll go more into depth on that later.

So to recap: A business starts with an idea. Find an idea and ask yourself if you can build a business around it.  That’s the first step [*3]. Now is not the time to figure out of your cousin Bubba is going to be a good customer service rep (“I just wish he knew English”) or if you should start planning your retirement. Begin with an idea and evaluate it’s business potential as best you can.  Then you decide if it’s something you really want to do, something that will be within your ability range, something you can afford, and so on. We’ll get to that soon. If you want a business just start thinking of ideas.

-Cam

[1*] Potential customers for our ecommerce software, Blaze.

[*2] Processes are a fundamental requirement to achieve a successful business. Processes solve problems, create order and make you feel warm and fuzzy. I’ll be writing a section on developing processes in the future.  This will be updated with a link when the post is done.

[*3] Yep, all my business started with an idea. “Can I sell knives on the Internet and make money?”  worked out pretty well. “Can I pour lime juice into water, add caffeine, add the words “natural” and “power” and make a million dollars?” We shall see.