London South Bank University weekend residential MBA session at Latimer House in Buckinghamshire, England. Photo Courtesy: Mark Hillary
In his book, The Personal MBA and on his blog of the same name, Josh Kaufman took on the rather daunting task of trying to condense an entire MBA into a single volume. The idea behind the book is that anyone can learn the skills associated with that prestigious degree – but without spending several years and thousands of dollars getting it.
The Personal MBA is a good read, and if Josh could condense an entire degree into a single book then surely it’s possible to condense that single book into one article… so, without further ado, I present to you: The Personal MBA – Article Edition.
Business is Systems
Before you learn anything else, it’s important to understand the nature of business which essentially revolves around systems. These are systems that have been tried and tested and proven successful – your product may vary as well as your marketing, your audience and your numbers; but ultimately, the underlying systems will function in a predictable way. There’s an element of luck but mostly it’s about understanding the numbers and the way the human mind works.
The role of any business is to create value and to do so without spending too much of your own money. In other words, you need to be able to get your supplies cheaply, then somehow add value before selling them on for more than you spent on them (perceived value is almost as important as actual value). To make the most of this, you need to understand your market and you need to find a good market to begin with that you can easily promote your offerings to.
Understanding core human drives is a great way to do this and if you can make your product work on an emotional level, or make people believe it will help them to be more attractive/become richer, you will be able to appeal universally. To test the success of your idea, try surveying the market (market research) or releasing beta tests (but not before alpha tests – which are prototypes you try using within your organization).
Understanding finances here is important too. This means looking at your cash flow cycle and using financial modelling (spread sheets taking into account as many factors as possible) so that you can predict the future direction of your assets.
Manufacturing Your Product
Once you have found an idea that you can market and have tested the said market to ensure there is an audience for you, it’s time to bring the product or service to that market. Donâ€™t spend too long perfecting your offering – a key tip in business is to bring things to the market before they’re finished so that you can then test market reaction and tweak your design accordingly. This is called the iteration cycle – and it is a great way to make sure your product adapts to the market and that it fits the need for it perfectly.
The more feedback you get, the more you can ensure your product, service or concept improved is tailored to meet demand. Using modularity and bundling, you can create various different ‘packages’ for your product too, which will mean people can choose the precise version they want and you can target different sub sections of your market.
You should also look into optimizing your production. This means using project management to plan the very best order for carrying out a service (as a building contractor, this means planning contingencies for rainy days so that no time is wasted for instance), while for products it means optimizing manufacturing by using fewer materials and reducing waste. It can also mean using ‘automation’, in order to make a ‘scalable’ business (for instance using digital printing).
Any form of tool that can increase your efficiency is called a ‘force amplifier’ and can help you to accomplish more without increasing your overheads (automation is the most efficient form of force amplifier). Note though that force amplifiers also amplify mistakes, which can result in dire consequences unless you monitor the process closely. Understanding and motivating your workforce is also vital.
Marketing means making sure people know about your product and making sure they want it. Conveying your message can make all the difference when it comes to selling your product. Marketing essentially means attracting attention to your business and giving people ways they can learn more about your products and services. Think of your ‘route to market’ which is the most direct avenue to the people you want to tell about your product.
You can also use a bit of psychology to make your products more desirable. Use contrast to make your products appear cheaper or more premium (by placing them next to expensive/budget alternatives), use a call to action to hurry people into snap decisions (such as limited discounts) and use narrative to explain how your product/service has helped others. Remove ‘barriers to purchase’ by making it as easy as possible for people to buy your products and to remove any element of risk. Most of all, focus on the end result you are selling – you aren’t selling a hat, you’re selling a warm head!
The Transaction & Reputation
In terms of your reputation, you need to make sure that the way you handle delivery and packaging (this applies in services too and applies to things like customer service) is as perfect as it can be and that your products are consistently high quality. Create consistency so that your brand inspires trust and where possible, find ways to exceed expectations with faster delivery times than promised and free gifts. If you don’t handle the transactions yourself, make sure that you are being well represented by stores, logistics companies and outlets.
Whew, there you have it. You may not quite have as much knowledge as an MBA graduate but that should certainly be enough to get you started and should provide enough of an overview to help you understand the basic principles of business.
This guest post is submitted by Evan Thomas. When he is not busy, he enjoys playing chess or reading a good book. According to him theÂ company registrationÂ services provided by Incorporator.com.au are second to none.