About Avril

Wednesday, 20 May 2015

The Mentoring Project - Session 2 'How?'

Based on the questions that I had put to the group last session to work on, I used the second session to dig deeper into each person’s offering by focusing on:

  • How does the offering look?
  • How is it authentic or competitive or different?
  • How is it going to be marketed?
  • How is it going to be marketed?

These questions and the second session were designed to prepare everyone for the next theme titled ‘What’ which may be a little raw and uncomfortable because it will be about:
  • Getting real on the numbers
  • Committing to milestones, timelines
  • Proving that the concept works... (ouch!)

I just don’t want to fall into the trap of spending the next three mentoring sessions on ideas and strategies when it’s most important to get real and practical on the numbers and effort required to make our ideas fly and most importantly, to prove our concept in the most cost and time efficient ways. 

In working on the ‘How’ questions above, it forced each mentee to start carving out their business ideas and we saw a huge amount of progress from session one to session two in this area. 

Although each mentee is at a different stage, I think that it’s important just to ‘start’ the business processes that we will progress to at each session because in starting and doing, you learn as you go and get great momentum.  You also learn to be agile and flexible as you go so that you can pivot your products and services to suit your market.

Mentee Focus for Session 2

The mentee I chose to focus on has been thinking about her business idea for four years and wanted to just start to make it happen now.  She said that she noticed that when you are the mentee of focus for the session, it’s surprising how much you feel you don’t know about your idea (which is also what the first session’s mentee found). 

Obviously the purpose of the focused 1-2-1  is certainly not to make people feel intimated but it’s a good exercise to try and apply a little bit of pressure to help you articulate your business offering and helps you to identify where your gaps are either in knowledge or training.   Other ways to do this are to talk about your business idea to as many people as you can and ask them to tell you why they think it won’t work.

In working out what your offering is and how it can do something more or different to your current competitors, I recommended a great and extremely relevant book by Daniel H Pink called ‘A Whole New Mind’.   

In his book, Pink offers a fresh look at what it takes to excel in today’s world which he describes as ‘The Conceptual Age’ and he reveals the six essential aptitudes on which professional success and personal fulfilment now depend:

1.       Design – Making something beautiful and emotionally engaging
2.       Story – Fashioning a compelling narrative
3.       Symphony – Seeing the big picture, combining disparate pieces into a new whole
4.       Empathy –Forging relationships and caring for others
5.       Play - PLAYING!
6.       Meaning – Finding and giving meaning

So now that the group have worked on crystallising their offering, it’s time to start getting real and here are some ideas I suggested to help with that:

1. Calculate a High level business model

I would suggest a month by month plan (see attached example format)

Revenues – Work out your high level monthly revenue estimates:
  • Work out what you will charge for your products and/or services
  • Work out how much you will need to sell to make enough profit to be sustainable or to reach the level you require e.g:
    • Aiming for turnover of £80,000 in year one.
    • Day rate: £700 - £1500 + VAT
In order to reach target from solely consultancy services will need to do:
  • 54 days at highest rate (£1500) - average of 1 day a week
  • 80 days at mid rate (£1000) - average of 1.5 days a week
  • 115 days at lowest rate (£700)- average of just over three days a week
Costs - Work out your high level business costs:
  • Roughly calculate your predicted monthly business running costs e.g. for:Equipment, marketing, any training you require, any help you require from Accountants e.t.c.(see attached example to give you some ideas
  • Try and calculate three basic scenarios; a best case, good case and worst case scenario (this will help you track your progress as  you go). 
  • Once you have your projected revenues and costs, then you can start to see your net profit by taking all of your costs and expenses away from your revenues.  Doing this will give you a good view on what month you will break even and start making money and what it will take to get there.  Some businesses can take 3 to 5 years to do this. 
Spend time on the things you are good at and get help for things you are not e.g:  Accountants, Tax experts, lawyers… Recommendations from friends are always a great way to find people or you can find help across all business areas at sites like::  www.elance.com

Also – you can claim tax back on any expenses you incur as part of setting up your own business.  You can register as a ‘Sole Trader’ for this gestation period and claim back for a number of years – it’s a good idea to hire a Tax Accountant to help you do this. 

2. Understand the efforts required for marketing your products and/or services:

You can make and/or provide the best products and services in the world but if you don’t have traffic or customers passing by your door, you won’t be selling them!  These days with so many websites and ‘noise’, if you build it, it doesn’t mean that ‘they will come’. 

Marketing is the key to getting the traffic you need to convert sales.  Below is a basic example calculation and assumption for you to be able to start to understand how direct marketing campaigns can work and what they might bring you. 

Now there are obviously exceptions to these rules but from my experience, these are good numbers to ‘get real’ on the realities of what effort you may need to exert in marketing to convert into sales. 

Once you understand these numbers, it will help you start to shape how you see your business being marketed and/or partners that might be necessary to collaborate with in order to make your business (e.g. a partner such as www.notonthehighstreet.com who has 5 million visitors a month if you are wanting to sell products v’s the amount of traffic you might get to your own ecommerce site)

If you want to set up a consultancy business in a very specific area, then you may already have a very targeted list of potential customers to market to and your conversion rate may therefore be very high.  Every business is different however it’s good to understand some high level numbers and what that might mean for you and your business.  

I trust that this has given you some ideas on how to get real and understand what you need to do in order to get real about your business and take the next steps to make it all a reality.  Remember the 3 great points from Miisa Mink who I had a little skype interview with this week:
  1. Take steps even if they are in the wrong direction (just start because you learn through doing)
  2. Knowledge is not the problem – the problem in attitude and commitment
  3. Have Patience!
You can watch the interview here:

All information, articles and videos can be found at www.businessofbrave.com
See you next session!

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