MYSELF MBA: MAIN PRINCIPLES OF BUSINESS
Josh Kaufman worked at Procter & Gamble and was considering whether to go to business school to help his career. The prospects after receiving an MBA were vague, but student debt was too real, $ 150 thousand.
Instead of saving for study, Kaufman re-read the books that are studied in business schools, and made a concentrate of them. The result was a book “To himself an MBA.”
Josh Kaufman made a squeeze from business literature and saved you $ 150 thousand
We publish the main thoughts of the author.
The basis of the business – the right value for sale
For a business to be viable, the idea must be based on five main principles:
If the process is repeatable, but one of the five principles is not respected, then you have not a business model, but something else. For example, if the lesson is not needed by others, it is a hobby.
If a company sells something worthless, it will go broke. If the goods are not sold, but sold, the enterprise is non-profit.
Niches in the market do not arise from anywhere – each of them is created based on the needs of people. There are five basic needs that affect profit mechanisms.
The more precisely the offer matches them, the better the product is sold.
1. The need to have
We want to possess material and intangible wealth. This need is met by retail chains, investment brokerage agencies and consulting bureaus that help to make us “rich, influential, and strong.”
Josh Kaufman made a squeeze from business literature and saved you $ 150 thousand 1
2. The need to make connections
We want to be loved and needed. This need is met by restaurateurs, organizers of conferences and dating services, beauty salons, spas and fitness clubs.
3. The need to learn
We want to satisfy curiosity and be competent. This need is met by educational programs, publishing houses, seminars and trainings, and creative workshops.
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4. The need to protect
We want to feel that our loved ones and ourselves are safe. Security and insurance companies, self-defense courses, law firms satisfy this need.
5. The need to feel
We want emotions and experiences. Cinema, concert halls, casinos, stadiums, amusement parks satisfy this need.
10 factors when evaluating the market
To understand whether a product can make a profit, conduct a market analysis before starting a business. If this is not done and in the process it turns out that there is no demand for your idea, then there will be no business.
So, we analyze 10 factors:
1. Urgency. Does the consumer need this fast?
2. Market size. How many consumers actively and often pay for a similar product or service?
Josh Kaufman made an extract from business literature and saved you $ 150 thousand 2
3. Price potential. How much (maximum) is the consumer willing to pay for a similar product?
4. Costs to attract. How expensive is it to attract new customers – in terms of money and time?
5. The cost price. How much resources will be spent on the development, creation and delivery of the product?
6. Uniqueness. Are there any products similar to yours? If it is unique so far, how fast can competitors copy it?
7. Speed to market. How fast can you create a ready-to-sell product?
8. Initial investment. How much does it take to make it work?
Josh Kaufman made an extract from business literature and saved you $ 150 thousand 3
9. The potential of the additional proposal. What can be sold with this product?
10. Consistency. How many resources are needed to create an offer that can function further without new infusions.
Test your business ideas. If you set a business 1-10 points for each item, then ideally it should score at least 75 points.
12 standard forms of value
Any value that a business creates is at least one form from this list:
1. Product. A tangible item that is sold at a higher cost.
2. The service. Help provided by a qualified specialist for a fee.
3. Public resource. The value that many use (for a fee).
4. Subscription. Something that people will get access to on an ongoing basis for a fixed fee.
5. Resale. Tangible or intangible value that can be bought at one price and sold at another, with a benefit to yourself.
6. Rent. Value that you can buy and give to others on time for a fee.
7. Mediation. The process in which the creator and consumer of value “join” for a fee.
8. Gathering an audience. Accumulation of a group of consumers and sale of access to this group to other companies.