As entrepreneurs, many times we make deals that may not be in our best interest because we don’t want to miss out on an opportunity or you’re desperate. But all opportunities aren’t good opportunities. The ability to walk away from the table is your biggest advantage.
On today’s Black Entrepreneur Blueprint # 434, Jay discusses how to get the power to walk away from deals that may hurt your business.
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BLACK ENTREPRENEUR BLUEPRINT SHOW NOTES – EPISODE # 434
How many times have you done a deal, created a partnership, or made moves with your business that you instantaneously regret? Been there done that. On today’s show, I’m going to give you some tips to help you avoid these types of situations and keep your business healthy. I’m going to give you some real-life examples and give you a case study of what I’m doing with one of my brands (Hell Yeah hot sauce).
HOW DO YOU GET THE POWER TO WALK AWAY FROM THE TABLE?
Let’s be clear, the reason you’re at the table is that you want something, or you feel you need something to grow your business. Do you need:
Money to grow or start your business
- Partnerships or joint ventures (to help grow your sales)
- More visibility (to increase brand recognition and sales)
- Increased Distribution (to get more sales)
Better Profitability (controlling production)
THE ANSWER IS…
YOU CAN WALK AWAY FROM THE TABLE WHEN YOU DON’T NEED ANYONE’S HELP TO DO THESE 3 THINGS
How Do You Do This?
ANSWER IS VERTICAL INTEGRATION – Vertical integration involves acquiring or developing one or more important parts of a company’s production process or supply chain. Vertical integration helps a company: Reduce costs across different parts of its production process. Creates tighter quality control and guarantees a better flow and control of information across the supply chain.
Netflix’s shift from licensing shows and movies from major studios to producing its own original content is an example of vertical integration.
Disney has pursued forward vertical integration by operating more than three hundred retail stores that sell merchandise based on Disney’s characters and movies. This allows Disney to capture profits that would otherwise be enjoyed by another store.
Apple Inc. is one the key figure in a successful vertically integrated business model. Apple Inc. centered its business strategy on its own development of integrated hardware and software and sells through its own retail stores
CASE STUDY – Hell Yeah Hot Sauce
Goal: Want to get into big box retail stores
Problem: Many of the big box stores want me to have a track record in other big box stores or other retail sales
Solution: Control the vertical from production, and distribution to retail sales
How Do I Do This
1. Control Production (saves money per unit cost)
Start bringing my manufacturing in-house in stages. Stage # 1 – filling and bottling in my own facility. Stage # 2 – purchase my own hot sauce manufacturing facility
2. Control Retail Distribution (increases profits by cutting out the middleman – other retailers where I sell wholesale)
I’m currently working with several malls and other retail locations to open my own “Hell Yeah” hot sauce stores to sell hot sauce, BBQ sauce, spices and seasonings, hot chips, hot popcorn, and other Hell Yeah branded products.
3. Create Demand So Other Retailers Want To Carry The Product
Now I’ve answered all the big box store questions about having a track record selling retail. This retail brand visibility will also enhance my online sales (direct-to-consumer).
4. Now I Have The Power To Walk Away From The Table If The Deal Doesn’t Make Sense
When you don’t need the deal you are in control.