Many times, entrepreneurs make business too difficult. They write 300-page business plans, have paralysis by analysis, and many never take any action. On today’s Black Entrepreneur Blueprint podcast episode # 366 I’m going to break down the simple formula for success that any business can use to make money. Visit www.BEBConnect.com
BLACK ENTREPRENEUR BLUEPRINT – SHOW NOTES EPISODE # 366
So today I’m going to break this formula down and give you the tools needed to execute this formula/concept.
First, let me talk a little about following your passion vs solving a problem and which concept is best. I truly believe the best concept is a combination of the two, but the most sure-fire way to make money is by solving a problem.
Problem – Solution – Result = Success
Find a PROBLEM, your product or service is the SOLUTION, what does the RESULT mean to the customer in detail (the benefits)?
Now just using this formula doesn’t guarantee success, but it definitely increases your chances of success. There are other things you need to consider such as:
- Testing your concept (proof of concept – true test is if people spend money)
- Profit margins – do you have enough profit in each sale to account for the cost of sales (product cost, marketing & advertising, ancillary costs to deliver the product/services like website, email autoresponder, office, etc.
NOTE: you must make sure your pricing allows you enough money to market to your prospective customers. Example: low-cost item with little margin vs higher priced product with higher-margin – look at the real dollars available, not percentages. Flat iron cost $10.78 landed – sell for $129 – real dollars available to market a product after Amazon fees were $102.06. I can outspend most competitors for keywords and still be profitable.
NOW LET’S TALK ABOUT THE FORMULA
- You want to identify a “real” problem, the more dire the problem is the more you can charge for the solution. For example, you owe the IRS money and they’re about to garnish your wages. You broke a tooth, and it needs fixing.
- What is this problem REALLY costing the prospective customer – break it down to its’ bare essence?
- For example: if I don’t pay or settle these delinquent taxes, I may have my paycheck garnished and my bank account was frozen. What does this mean to the customer? No money to pay other bills which could lead to financial distress.
- Here’s another example: You have bad credit and want to purchase a car – what does this mean to the customer? Don’t have a reliable vehicle to get to work, take your kids out, or travel, also your insurance premiums will be higher meaning it’s going to cost you more money than you probably don’t have.
- The solution is your product or service. Your product or service will solve that customer’s problem.
- You need to reiterate the problem, confirm what that problem really means to them (what is this problem costing them),
- You need to reiterate what this problem is costing them – what are the pain points?
- You want to outline the solution in detail and why they need it.
- Now explain the relief that the solution provides.
- Example: now once we get your credit cleaned up, you’ll be able to buy that car and get a lower interest rate that will reduce your payment from $600 a month to $400 a month – thereby allowing you to reallocate resources that you would have spent on your car payment to other bills or savings.
- Validate and confirm that they made the right decision. This will help alleviate buyer’s remorse or the fear they made a bad decision.