10 Steps Business Profit Formula – Summary of Startup Success Formula: Today I am going to give you the complete business formula in this one article.
What Do You Need To Build A Complete Business? What Business Mindset? What Business Formula Should Be Applied? Should There Be Business Planning? And What You Should And Should Not Do, And The Most Important Thing Is That How You Can Take Your Business Forward? I Will Tell You Everything Today.
One year, if you go to take training somewhere and whatever you will get to learn there, I will tell you by summarizing it in a single article today.
I will tell in 10 points, if you are about to start some startup or if you are already a small businessman, or why you are not a very big businessman, these 10 points will definitely help you to move forward as soon as you get petrol of car.
Will do Why am I telling this because I am also a businessman, the 10 points of business that I will tell you today will be the complete 10 points due to failure in business. Which if you follow this within business then your business will be fine and You will never have to face failure in startup or big business.
Table of Contents
10 Steps Business Profit Formula – Summary of Startup Success Formula
It has been found in a research that 90% of Indian startups fail within the first 5 years, the reason for this is – Lack of Exact Needed Innovation, this is the Patents Field of 2015-2016.
Forbes took out the most innovation lists of companies, 25 top companies in it, where most innovations happen, only one company out of 25 of India came to Asian paints.
Ratan Tata ji is continuously expressing his dissatisfaction publicly, there is no actual disruption and actual innovation to be seen anywhere in India.
If you want to make your business really big, then read this article completely.
There were so many bad experiences in 2015 that the startup funding of 2016 had gone very low, in 2015 startups got funding of $7.5 Billion, but within 2016 our startups were able to attract only $3.5 Billion fund, down about 50%.
That energy has reduced, today investors do not want to invest money because people do not know how to develop and maintain startups in our India.
The most popular 10 cities in the world regarding the ecosystem of startups, there is no name of any city in India in them. Most of the cities are American.
1. Silicon Valley,
2. New York,
3. Los Angeles,
5. Tel Aviv-Yafo (Israel)
The name of India does not come anywhere.
So those 10 points tell you, so that you too can take our country forward –
1. Missing Innovation Around Customer’s Money Making Model
All the merchants in India first calculate their money making model, they never see what is going to be the money making model of their customers, they don’t think exactly from where my customers will get success, where will my success come from All this will be calculated.
But as long as the success of the customers, how will its profitability, its growth, its productivity, its gross margin, its revenue, its inventory turnover, its cash flow, its brand equity, its customer acquisition and retention, and its velocity speed of transaction, what How my customers grow with their money, how the money making model and recurring revenue model of my customers grow, the day they understand, then my greed will be fulfilled by the need of the customers.
How does innovation come to the first point, which problem you are going to solve for your customers, whose customers cannot solve that problem on their own.
So how will there be growth in your business, on the need of customers, and even if we understand a little bit of need of customers, Indian startups are like this, it is very fast to kill copy.
When uber came to America, Indian startups started ola.
Amazon started in America, then Indian startups started Flipkart.
When airbnb came to America, oyo was pitted against it in India.
When Spotify came to listen to songs in America, ganna.com was started in India. There are many more like this.
If startups are also trying to understand the need of the customers, then they are also trying to copy the entire America startups in India. Till now there is no one who has captured the market of the whole world.
2. Negative Cash Flow & Negative Working Capital
Profit is important and cash is also important. You need both, and they are two different things.
There may be profit coming in your Books of Accounts, but the payment of your cash is getting delayed. Your money is not being recovered from the customers, it is called Negative Cash Flow.
You have margin in your invoices, but working capital is needed in cash running business, to solve this problem again and again you keep looking for funding agencies and somewhere after funding agencies come to a level. She stops funding you.
That negative cash flow is a big reason for the closure of our startups.
Some of the Indian startups that have shut down, like askme.com, autoraja, talentpad, fashionara, franklyme, were all big funded startups, which got destroyed due to this negative cash flow.
So always keep a positive cash flow, the goods you are selling, try to take payment in advance or on time.
3. Expansion with Negative Margin
If there is no gross margin then ! What a lot of startups started thinking nowadays is that acquire the market, hold the loss leading strategy, start selling goods cheaply to acquire the entire market.
If the valuation will increase, then you will increase it by taking funds from outside, if from the beginning you are not clear about where your profit will come from, you will surely die later.
What is the problem of people that they do business, but in the process of selling cheap, they compromise with the margin from the beginning, what can you do in this situation – you should make a plan in advance, so that this situation comes. It’s not
Make a plan that when and how you will cover your margin, this is the cycle of selling cheap, if you do not have big money in your deep pocket, then you will be drowning in debt for the rest of your life. So keep this in mind from the beginning.
4. Lack of Talented Manpower
- Do you have talented high potential, high performance, high skill, high will?
- Have you created manpower of highly capable people?
- Do you see that you have people who can execute your vision?
- Do you have people who can execute your idea?
- Do you have people who are the most talented people who can work tirelessly all day?
If you do not have good manpower, then despite everything being good, your business will never grow. You definitely need manpower.
5. Scalability with Recurring Revenue Model
Here scalability means what is the model to grow up in business, from where the business will be big, many startups are very profitable, and many startups have very good margins, and there are many startups who are in their region. Inside they do very well.
But now it comes to how to make that business big??
It should be prepared in advance, and the recurring revenue model means that if your business is getting bigger, but whether your customers are becoming regular customers or not!
In this, along with expanding the business already, you will have to plan how you will get regular income from your customers.
But what most people do is that they keep running after new customers, and leave the old customers. They think that hey, this is an old customer, so they will keep on coming, keep on taking the goods, what difference does it make. So you have to pay more attention to the recurring revenue model along with scalability, and plan for it in advance.
6. Mixed Marketing Signal & Wrong Positioning
People do not know very well how to position their products well in the market, that is who is your identity, who is your perfect customer, who is your imperfect customer, what is your perfect products, what is your imperfect products What is it, your products were not planned properly, and the segmentation of customers was not done well,
Going everywhere you are saying that you also buy, you also buy. Do not sell a little of the goods to everyone, you have to find according to perfect demography and psychology, and then go and present the same product.
Find your single signal of who you are, which will create your identity. Are you the newest? Are you a problem solver? are you the best? Are you most convenient?
There are many types of positioning. When you know who you are, then you will do packaging accordingly, branding accordingly, marketing accordingly, presenting the market with products accordingly, bringing scheme and policy accordingly. Accordingly, the backend team will be ready.
Whether your marketing planning is right or not, this is their single signal of thumbs up – taste the thunder, do something stormy today, give 4 storms. They know who the market is and how to sell. This is called – product positioning.
7. Releasing Product as a Laggard
This laggard means that the product which comes late, which has been established in the product market, people who come last in the market with similar products, then keep on giving discounts, keep reducing the margin, and most of all, Will keep on lending.
Depends on how safe your business is, whether the timing of your product is right, are you able to find the adoption curve of the market.
There is a big reason why people struggle because of late arrival of the product in the market, that why no one is buying!!! Even if the product is of very high quality, people do not buy it, so you have to move forward with the market.
8. Save Yourself from Getting Outcompeted
You started a good business, but your competitor is watching you carefully, what is this man doing, you have to prepare in advance.
You have to walk by creating an entry barrier, intellectual property rights, patent & licensing, proprietary technology, you should do some planning so that your competitors should not be exposed to secrets.
Try to improve your brand equity, or buy your goods so cheap, by building economics of scale, then the competitor is not able to imagine how he is able to sell the goods so cheap, he does not even know, there are many ways To create entry barrier in business.
Have you created an entry barrier inside your business from the very beginning?
9. Missing the Process of Converting Feedback into Feed-Forward
Customers give you feedback, you do not convert it into feed-forward, customer tells you problems with your existing products.
You are thinking that hey they need a discount, that’s why it is telling, your customers are giving you a signal, it is not the customers, it is everything for you, if the customers have feedback or complaints, try to improve them. Do it
Your customers want to be with you, so he is telling you that the shortcomings in your products should be removed.
If your customers are not complaining to you, then it is very dangerous for you, if they mix quietly with your competitor, then it is a thousand times better than the customers giving complaints. Because he wants to be with you, hug him.
Your first product is only for trial, many improvements have to be made on the top of the product according to customer feedback, and convert the feedback into feed-forward.
Otherwise, your beginning will be good but later the whole company will be shutdown.
10. Business Model of Building Complete Ecosystem
This ecosystem means that as one organism depends on another for its life, it becomes a web in business. Do not work alone, create an ecosystem together with the entire society.
Like Google, YouTube, Facebook, Amazon, Flipkart, Uber, Ola etc. Like a company which is a huge ecosystem, you should do something so that the world benefits from your existence. The day you left, the whole world should stop, and at least plan from your city itself. With which you can do something big with 10 other people like you.
Friends, if I keep writing in this, then it will be a very long article, I do not want you to get confused with your mind by taking a lot of information, so you should know only this 10 points and in the next one point I will tell a lot in detail you.
If you apply these 10 points to your business, neither will you see where your business will reach. Friends, tell us how did you like our Business Tips – 10 Steps Business Formula by commenting below and do share this Business Tips with your friends.
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