Posts Tagged ‘profit’

Over the past year, I’ve written a good number of business advice articles for Manila Bulletin and each of those articles were and still are meant to help as many people as possible. These articles are from my experience and discoveries through a lot of trial and error in “business making”, and to be honest, all of those articles contain a secret or two of mine on being successful in business, so in this particular piece, I’d like to summarize some of the more valuable lessons and what has made me who I am over the years. I do hope that you enjoy reading this as much as I enjoyed writing it.

Keep things simple

If there is one truth about what works in this world is that the simplest of solutions are all you really need. A lot of times, I find myself looking at an opportunity and immediately start thinking of all sorts of “creative” ways of making money with it. Most of the time, it becomes an exercise in creativity rather than making a decent profit. In my article entitled, “Do Not Overcomplicate Your Business” I talk about this incident where a student from an Ivy League school was over complicating what should be a very simple and straightforward business — printing and selling of t-shirts. (Go to my blog at http://www.markso.wordpress.com and search the title if you have not yet read it) I mean, come on, how complicated can that be right? Well, as the story turns out, you’d be amazed at how our train of thought can be so devoid of common sense.

Find the customer first

When I first heard this line from a successful entrepreneur (a close and dear friend) a long time ago, I was blown away at the simplicity of the logic. This is really not a secret in business making, just find and talk to a successful businessperson, they will instantly validate it, and many a times, that is most probably how they started in business in the first place. So to explain further, I used to think like the throngs of would-be entrepreneurs when it came to starting a business, find capital, put up the business, then make money. The problem with that logic is that in order to be in business, you needed capital first and in many, many cases that was the whole problem, the reason why you want to start a business in the first place was because you did not have money to begin with, so I experimented with that line “Find the customer first”, tried this and tried that until finally I figured it out. I discuss this a little bit more in my article: “How to Make Extra Money with Zero Capital” (again go to my blog and search for it if you have not read it yet).

Learn how to sell

Business in its purest form is selling. So naturally, if you want to be in business, you need to learn how to sell. Now the problem with this for a lot of people is that the mere mention of the word “sell” sends shivers up and down their spines, “can’t do it”, “don’t want to”, “I don’t think I can” would probably be the three phrases that just popped in your head right now. But the truth is, anyone, given the right motivation can sell, in fact, the people who you think can’t sell are actually the ones who can outsell even the most gifted of sales men. In my article series “The Tale of Two Salesmen Parts 1, 2, and 3” I unravel the mysteries and debunk the myth that sales and selling are only for a select few. When you get to read those articles on my blog, you will soon realize that sales is not a position, it’s a way of life.

Manage your money

Now, the thing about selling is that if you do it very well, money comes in. And I used to think that the more money coming in, the richer I will be. Well, it is true, but unfortunately that’s only half right. What I experienced was that, the more money that I made, the lesser there was of it remaining because I spent most of it on useless stuff. It took my wife and a huge knock on the head for me to realize that no matter how much money you made, what mattered more was what you did with it. In other words, how you spend is much more important than what you make. This is another key to my business success. In my article series “Money Management Simplified Parts 1, 2, and 3” I discuss step by step how you can spend properly and of course manage your money. So if you haven’t done so yet, go to my blog now and search those articles.

Keep investing in yourself

I said this once, and I’ll say it a thousand times more. The real secret to becoming a success is to never be content to just stay where you are. You are a product of evolution, when times change, so must you, when times get tougher, so must you. In this world we live in, it is the strong that survive, and so the most basic and yet most potent advice I could ever give you my dear reader is to never stop investing in improving your self, expanding your knowledge, practicing until you understand, making mistakes and boo boos along the way are all the things that you need to do constantly to keep on growing and succeeding.

In the end, I hope that my business advices through my articles and my blog have helped you in some way, hope or form. If it has, do leave a comment on my blog on any or all of the articles that you read there. Good luck and God bless!

Author box:

Mark So is a fervent businessman, forex trader, marketer, sales consultant, and educator.  He is the Chairman and CEO of Businessmaker Academy—a business, finance and corporate training center.  He is also the Chief Forex Trainer of Forex Club Manila. Mr. So is slated to conduct his 7 Point Formula for Business Start Up and Expansion this November 13, 2010. If you are interested in attending this seminar, email Mark directly at markso@zerocapitalclub.com. To read more of Mark’s interesting and life enriching articles you can go to his blog at http://www.markso.wordpress.com

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A long time ago, I used to think that the true way to success is to outwit and outmaneuver competition. Truth be told, I am a very competitive person by nature and I hate losing to competition. And I’m sure that a part of you feels the same way deep down inside, it’s called the “competitive spirit”.

In fact I would wager that a lot of people who want to venture into business have a very healthy dose of competitiveness and most of the time think of starting a business as similar to going to war. You start to buy and read books such as the “art of war” and numerous business strategy books to beat your opponent(s). You have in your heads that to be in business, you must focus on “Killing Competition”.

Through the years of teaching business, I’ve encountered a lot of start-up businesses and even growing businesses that do not focus on what is really important, and that is learning how to make profits regardless of competition.

A lot of businesses that I’ve encountered will typically price their products lower than competition so that they can “steal” the clients from them. They feel that the more clients they are able to take from other businesses, the more successful they become.

For Example: You just opened a water refilling station just a few blocks away from an existing one who sells their 5 gallon jug at P50 each, you decide that for the opening promo you are going to price your 5 gallon jug at P45 each so that the customers of the existing business will switch to buying from you.

If you are starting to think this way, let me say right now that this is faulty thinking. Why? Because:

1.)    Your competition will most probably match or even price their products lower than yours and a price war may start. A price war is never good for business, not for you, not for your competitor. If you go down this path I guarantee, no one will win.

2.)    Competition will ALWAYS be there, even if you manage to destroy one or two today, 10 more will spring up tomorrow. It’s a losing battle that you will never win. Plus, this is the sure fire way to attract more enemies and possibly bankrupt you.

3.)    You are not acting in your business’ best interest because your profitability suffers and you are running your business not like a merchant but like a warrior.

So instead of thinking like a warrior let me give you now a few insights that will help you think more like a merchant whether you are just starting a business or have been in business for a while.

First, let’s re-focus you, repeat after me: “Businessmen are merchants, not warriors”. Business is not about going to war with your competitors, it’s about being profitable first with your customers.

There are many methods for pricing your products and services to be profitable with customers which I discuss fully in my Business seminars, but for this article I want to focus on a very important philosophy of profitability and that is to start learning how to

“Price for Profit, never for war”.

Here’s a real life example on how I did that. A couple of years ago I was invited to speak on “How to Start and Manage a Food Cart”. At first, the organizers wanted me to price it at P500 / seat since their other speakers (talking about other topics such as catering and baking) was offering that price. I said no to P500 and ended up negotiating the price to P2,500 / seat, 5 times higher than what the other seminars were going for. Though the organizers were reluctant at first, they finally said okay. You should have seen the poster. My seminar was the only one that was priced at P2,500 and the rest of the seminars were all P500. It stuck out like a sore thumb.

When the seminar day came, there were three seminars going on at the same time, mine and 2 others. The other 2 seminars were jam packed with about 60 participants each, mine had only 30 participants. Here’s the math:

Seminar A had 60 participants x P500 = P30,000.

Seminar B had 60 participants x P500 = P30,000

Sub Total                                              = P60,000
My seminar had 30 participants x P2,500 = P75,000.

Even if you add up the sales of my 2 “competitors” I still produced P15,000 more. Another way to look at it is that even if I only had 12 participants, I would have made the same amount compared to seminar a or b’s 60 participants, in my example above I only had half of what they got but I won over them in profits by an astounding 150%.

So you see, as businessmen, if you focus too much on increasing your customers by lowering your price, it is not at all as profitable as getting a smaller number of customers at a much better price. I never try to steal the customers away from my competition by lowering my price, instead I focus on giving more value to my customers with the price that they pay, regardless of what competition does.

Knowing this is the most important first step to becoming a merchant and a true Businessman.

Mark So is the Chairman and CEO of Businessmaker Academy and Forex Club Manila.  He regularly holds seminars on Business, Finance and Investments.  To read about past articles from the BIZMAKER column, you may visit www.markso.wordpress.com.  For more information about his seminars, you may contact Tel Nos. 6874445, 6874645, 6873416 or visit www.businessmaker-academy.com or www.zerocapitalclub.com.

When I was younger, I read that competition is the consumer’s best friend because if there are more businesses offering the same thing, prices should go down. As a consumer, I agree and have benefited lots of times from it. Problem is that thought process became the norm even to Business owners. Start-up entrepreneurs started thinking that to be successful in business, you have to get “market share” by killing competition, and to kill competition, you sell at a lower price.

In my marketing seminars to start-up entrepreneurs, I will almost always start by saying “We are merchants, not warriors” to remind the participants to focus not on competition but on their business. In business you should never think about killing competition, worse, never even try it by selling at predatory prices. Why? Because competition will ALWAYS be there, even if you manage to destroy one or two today, 10 more will spring up tomorrow. It’s a losing battle that you will never win. Then I would say “As merchants, we price for profit, not for war”. No one wins in a price war, but the business with the most profits will always win against its competitors.

Here’s a case in point. A couple of years ago I was invited to speak on “How to Start and Manage a Food Cart” At first, the organizers wanted me to price it at P500 / seat since their other speakers was offering that price. I said no.

I ended up negotiating the price to P2,500 / seat, 5 times higher than what the competition was pricing it. Though the organizers were reluctant at first, they finally said okay. When the seminar day came, there were three seminars going on at the same time, mine and 2 others. The other 2 seminars were jam packed with about 60 participants each, mine had only 30 participants. Yes, the other 2 speakers had the market share, but I made the most in profits.

Speaker A/B had 60 participants x P500 = P30,000.
I had 30 participants x P2,500 = P75,000.

Even if I only had 12 participants, I would have made the same amount compared to the competition, in my example above I only had half of what they got but I won over them in profits by an astounding 150%.

So here’s the point, I did not have to lower my price to compete and in the end the business who is left standing is the one with the money to continue going.

All the best!
-Mark