25 February 2020

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SMEs, Get Your Idea Checked Before You Invest, Before You Spend...

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By Ashwin Merchant

We know every entrepreneur has unique set of strengths viz. constantly emerging ideas, gut feeling, quick decision making ability, taking risk, will to execute and self motivation and leadership quality. On the other side, a quick note on common weakness most of the entrepreneurs display, viz. never planning long term objectives, invest in business process, hiring professionals & experienced specialists, myths about marketing as mass advertising, misunderstanding marketing with tools of marketing and always ignoring marketing as an important business function.

They must remember that only marketing and innovations are two important revenue generating heads, rest if you see in balance sheet are all expenses. Today, business is marketing. Howsoever, novel idea you have come out with, a good product you have developed, quality of service you propose to offer bundled with your product, the optimum price you have labeled, but, if the product/service is not marketed, you are lost.

It is not the problem of startups and first generation of entrepreneurs that they do not understand marketing, branding, business development strategy, grass root to global market, but they must understand that they are putting first their own hard earned money, money borrowed from relatives and friends. Unlike yester years, today, success is also measurable in terms of return on investment. As you grow, you need to convince banks, financial institutions, private equity and few successful ones may want to go for IPO. All through your dreams along with your products and services you have are marketing your enterprises, your dreams, and your idea power and in return expect faith, trust from customers and investors.

Having great idea is not everything. It’s the first step. Next step is to execute idea. Think about USP of your idea. Convince yourself whether your customers will buy your idea (product & service emerged from your idea) and whether investors will make investments and show their faith on your idea. So, entrepreneurs, come out from conceiving idea to checking value of idea with your own story on how you propose to  move further with your idea. It is not simple as it sounds. You and me, one and all, will always find their own idea as one of the biggest thing and win-win situation. But, wait, hold on, before you spend further, invest more money, GET REALITY CHECK on your idea.

A young enterprising client visited my MARKETING KLINIC with an idea to install mineral water mini bottling plant  in a distant western suburban of Mumbai wherein he was having his ancestor’s property. He knew that the investment size will be anywhere between 10-15 L rupees and had no issue with this. He was fascinated by the huge market potential and economics of business as profit compared to cost. The fact he was not aware of was about the logistics & distribution, cost of marketing, sales promotion, brand building and economies of scale for future expansion. 

In simple words, he had no idea about where his product market may exist in competition with MNC brands established since decade and more in city like Mumbai, and positioning his product v/s others. He was only concerned about affordability while pricing his brand at lower price in competition to popular brands and that he believed will be a great idea!

A young student , I met in my capacity as one of the judges for project appraisal at the family owned business certificate course, presented a high powered plan of mobile hand driven vans to sell chats in different societies in Mumbai under a branded chat name. Idea was to go to customers instead of customers going to a joint to eat tasty chat of their age old taste – a proven local phenomenon that persists in consumer mind. Idea lacked the basic buyers’ behavior factor!

A computer programmer with 5-year experience came with an idea to start a website for match making site catering to particular community and demographics. Idea was a niche when compared to all wide based matrimonial websites owned by dot com companies in the business today and operating with high degree of customer satisfaction. . Going niche may not attract large customers and create sizable database for effective match making and hence the proposed revenue cycle was a great challenge. Sponsorship and advertising revenue are not great idea for starting yet another ‘me too’ enterprising business!

Lots of young entrepreneurs visit at MARKETING KLINIC with ideas, but, majority of them in ‘e’ segment,. This is because one believes it’s always a great idea built around technology platform that do not attract large capital (less risk), self skilled (man power no big deal), on-line marketing (low cost, no cost), upgradable, scalable (technology friendly) and more. Even valuation of the idea into project now simply does not depend on how new, innovative and novel concept it is but whether and how idea will be implemented and executed for results in short term and long term. Only ideas do not attract VCs, PEs and public investors because reality is totally different than executive summary and presentation. Everyone wants powerful ideas to produce powerful returns, results, response.

By its meaning, Reality Check is an assessment to determine if one's circumstances or expectations conform to reality. Reality Check answers Dos & Don’ts, Whys and Why Not? Reality Check takes into account everything by its need as well as overall importance and creates a logical start-to-finish flow, from competitors’ to customers’ point of view, sales to service aspects.

As you start working over the idea, and as it picks up momentum, there comes the need for clarity and reality check to find out what’s workable, doable and profitable in long run. Before you spend another rupee on your new idea or new business or new market, check out on reality essentials.

Reality Check also focuses on the start up process and the potentiality on possible funding with due focus on exceptional aspect of every idea and project feasibility.
Finally, Reality Check also gives you realistic expectations before investing your time and money on idea marketing and your business. 

Idea Power + Power Packed Marketing Strategy = Success

About the author

Ashwin Merchant is the founder of MARKETING KLINIC for SMEs and offer e-consulting to businessmen & entrepreneurs from Mumbai.

Visit his website  http://www.ashwinmerchant.com/

Last Updated ( Monday, 21 February 2011 01:48 )  

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