Unprofitable business - options for solving the problem, analysis of situations

A business to which you devote yourself completely brings income and satisfaction. If you invest energy, knowledge, and time into an enterprise, there will definitely be a return. But the path to success is long if you don't set your priorities correctly.

Which idea is considered good? The one that will bring 20,000 rubles or 200,000 euros? In 1 year or in 10 years? Let's distribute the criteria:

economic (the business makes a profit in a limited time);
personal (an activity to which you have to devote all your time brings satisfaction);
social (being a businessman and making decisions on your own is more prestigious than working as an employee).

It is better to measure luck quantitatively: in rubles, dollars, percentages, calendar periods. Napoleon Hill, the most authoritative author on the topic of success, advised setting goals correctly: not “become rich,” but “earn 20 thousand rubles in the first ten days of April.” He also discovered the main secret of how to turn a startup into a profitable activity: do not limit your imagination, constantly direct your thoughts towards the final result. Therefore, the first recipe sounds like this: the word “impossible” does not exist.

Business and Economics

Income, money, break-even point - all these are economic categories. What does a novice entrepreneur know about economics, market categories, trends, laws of management and marketing? To organize a commercial project, you do not need a diploma from a higher educational institution, but you will need to master minimal theoretical concepts: market, business plan, income, loss, liquidity, competitive advantage.

Whatever idea the future entrepreneur comes up with, he should remember the main thing: the business must make a profit. This axiom refers us to the economic nature of entrepreneurship. The second recipe for successful activity is: “Think like an economist.”

Checking profitability or demand

Checking the viability of the idea will also help you make a choice. Will the plan be profitable? Will it ruin you? Perhaps the success of an open business will depend on many factors, for example, on the chosen place for selling the goods, the effectiveness of advertising, speed of delivery, etc. These factors can significantly affect business development. Especially if you open a business in a small town. Think of entrepreneurship as climbing a mountain, reaching your goal step by step. Ask yourself difficult questions and find answers to them, this will help you avoid mistakes. A well-thought-out business plan will not only ensure the launch of a business, but will also help cope with unforeseen circumstances and even secure investment.

Entrepreneurship and sportsmanship

Business and sports are similar. The goal of the sports competition is to beat your opponents and take the main prize. This is the goal of an entrepreneur: to come up with an interesting idea and be the first to occupy a niche.

There is a nuance: only a few manage to come up with a good idea “from scratch.” Good ideas come from those who are knowledgeable and experienced. Imagine that a newbie came to biathlon, who had never skied, and won the race. This is impossible. Surely, before taking the prize, he trained for 2-3 years.

Strategies for Business Success

Sales strategy

A good sales system is a very large topic on which I will write a separate article.

Here I will talk about several important principles that are easy to start using for an existing business and should definitely be considered for a startup.

To begin with, you must have the right sales attitude . Many people are embarrassed to sell themselves and are not sure that most employees can be assigned sales functions.

Look at sales as helping the customer. You are doing the right thing, bringing benefit to the client, and sales are the way to convey this benefit to him.

Don't worry about rejections. Refusal is just a form of external communication, nothing personal. You offered - the buyer refused, an absolutely normal situation, don’t worry about it.

Further, good sales require a script , that is, a certain algorithm of actions. Creating a good script is difficult, but the basic idea of a script is simple.

First, the script must have a sales offer; for each client you are trying to sell something to, you need a specific, ideally time-limited offer.

Secondly, the main content of a sales script is working with client objections. You make an offer, potential clients may have a lot of objections as to why they won’t use it, from lack of confidence in you as a supplier to the client’s lack of money.

Identify these objections and constantly add new ones to the “piggy bank” of objections that you hear from clients. And think about what answer you can give to each objection, and how you can remove this objection.

Finally, after making a sale, build a relationship with the client . Give a small gift, or promotion, or a discount coupon for a repeat purchase. If you have customer contacts, contact and find out if he is satisfied with the product, offer a repeat purchase or an additional product.

There is a very useful resource about sales - Nastasya Belochkina’s channel on Youtube, it is not currently updated (at the time of writing, at least), but there are already several very useful videos there (perhaps this is the most useful information about sales in the public domain).

Marketing strategy

A marketing strategy should include at least these three things: positioning, competitive advantages, promotion strategy.

Positioning is the clearly defined position in the consumer's mind that your product occupies. Positioning justifies the difference between your product and competitors.

The competitive advantage of your business is leadership in a certain quality that is important to the client. According to Michael Porter, there are three types of competitive advantage: cost leadership (you can offer a product to the consumer at the lowest price); differentiation (unique quality characteristics of the product) and focusing (maximum satisfaction of the needs of a narrow market segment).

Promotion is important for any business, I will draw attention to a few points.

When starting a business, be sure to use free promotion channels , for example, social networks allow you to immediately reach the widest possible audience on the Internet. Create an account on Instagram, groups on VK and Facebook (if you are doing business for an international audience, add Twitter to this). Ideally, make a channel on Youtube; today almost any smartphone allows you to shoot videos of acceptable quality. Check if there are videos on Youtube on your topic; if there are none or few, you have a good opportunity to express yourself.

Clone content on all platforms, adjusting for the features of each. Have you made a video for YouTube? Post a piece of it on Instagram, write posts on VK and Facebook based on the video.

For existing businesses, use contextual advertising and stimulate personal recommendations.

Contextual advertising is a unique promotion channel. Firstly, you can start an advertising campaign from 1000 rubles. Of course, to get significant results, you need to invest a lot. But not a single advertising channel will allow you to enter it with only 1000 rubles and get a return.

Secondly, contextual advertising provides very high-quality contact. You will not just be an eyesore to a potential client, if a person clicks on an advertisement and goes to your website or to your group on social networks, you will have the opportunity to convey to him very detailed information about your product.

Any promotion strategy must take into account the AIDA scheme, but it is especially important to do this in Internet promotion. That is, do not offer the service right away. First, attract the client's attention, then arouse interest in the product, then arouse the desire to use your product, and finally push the potential client to action.

When it comes to personal recommendations , this is probably the most underutilized promotion channel. Almost no one specifically encourages personal recommendations, yet it is not at all difficult. There are three basic methods on how to do this.

Ask. You just have to ask your clients to tell their friends about you, leave a review on social networks, and you will already get a non-zero result that costs you absolutely nothing.

Offer benefits. Offer the client discounts: a discount for the client he brings, and a discount for the client he brings. Let's say 10% to the referred friend and 20% to the client himself. With one yoga studio I made the campaign even more interesting, they traditionally held the first lesson for a new client for free, we did a campaign focused on personal recommendations, so the first lesson was free not only for the new client, but also for the old client, who brought him to the studio.

Do something memorable. Another good method is to create something memorable for the client that they will want to tell their friends about as an interesting story. The kindergarten where we take our daughter has masterfully mastered this technique, they constantly involve parents and children in some cool activities, we burn a scarecrow of Maslenitsa, decorate the city square with homemade lanterns, take part in performances for children, and make gingerbread houses. It’s clear that all this constantly appears on mom’s and dad’s social networks, and is told at get-togethers with friends. As a result, the private kindergarten has a queue of people who want to send their children there; they doubled in size a year ago and are planning to expand again.

Profitability

How to achieve a high level of profitability is also a topic for a separate article. But there are two simple principles for increasing profitability that any business can use.

First, sell more, more frequently, and more expensively to current customers.

How to sell more to customers. Offer additional services, even just a little. For example, our kindergarten successfully sells handmade toys.

How to sell to customers more often. If you have a B2B business, it may be appropriate for you to simply communicate with customers more often. For example, if a client doesn’t order from you for a while, call and find out if he forgot to place an order.

If you have a B2C business, make profitable offers on social networks more often, and even just write about your offers on social networks. Write about the product in general, about new arrivals, about additional services. Do this without false modesty, social networks most likely will not show your identical posts to the same client.

How to sell for more. There are two strategies. First, make better products, offer special options for customers with special requirements.

Second, increase prices by small amounts. Today, customers are very aware of prices in the market, but, as a rule, they just want to know that they are not overpaying by ordering products from a certain company. If your price exceeds the prices of competitors only slightly, this in itself will definitely not become a discouraging factor. For example, when we recently started working with a small digital technology service center, we analyzed prices on the market and quickly increased all prices by an average of 29 rubles, as a result the client (our client) began making an additional 10 thousand rubles a month absolutely out of nowhere.

Art of War and Commerce

In his book Think Like a Billionaire, Donald Trump compares the behavior of a businessman and a commander in chief. You need to make a detailed plan for yourself and your army, and then execute it. In order for activities to generate income, they study the art of strategic planning: for a year, for a month, for every day. The life of a business person is scheduled minute by minute - he knows exactly what he will do tomorrow, in a week, in six months. Having learned to plan, set priorities correctly and achieve results, an entrepreneur will discover another recipe for profitable activity.

Important tip! A commercial project is a creative endeavor, but only competent planning will bring success.

Clear goals

A business development strategy implies adherence to clearly defined goals. An indisputable fact is that any business must develop all the time . To become a successful entrepreneur, try to improve and improve your business offerings and services. Make small changes and you will see big results over time. Correctly set tasks are a solid foundation in this area. One of these main strategic objectives is marketing. It includes:

tracking market trends;
measuring and counting data;
analysis of results and removal of ineffective methods;
Pareto principle;
use of advertising of your goods and services;
advertising experiments;
moving marketing to identified effective channels;
continuous search for the best channels.

State assistance

A commercial project has a better chance of starting from scratch and not going bankrupt if it operates under the tutelage of the state. Not everyone has access to lucrative government contracts, but it is at least wise to use the tools that are available to everyone. State support for small businesses is provided in several areas:

subsidy for opening an individual entrepreneur from the employment center;
subsidies and grants for start-up entrepreneurs;
compensation for leasing payments and loan interest;
rental of municipal real estate;
free educational programs.

Start-up capital is the basis of business

Before answering the question of where a business starts, you need to understand that almost every business requires capital. The amount may be different, if you need to invest significantly, there is an option to start looking for investors or take out a loan from a bank. In addition, you can turn to the state for help, because the state provides subsidies and preferential loans for many small business projects. For example, projects aimed at solving social and environmental problems of the region can qualify for benefits.

Adaptation of foreign experience

Oleg Tinkov said at one of the seminars: “Russia does not need innovation. We are so far behind that you can make money simply by copying other people’s achievements.” You don't have to trust this judgment 100%. But there is a rational grain in it. Good ideas from the USA, Western and even Eastern European countries are waiting to be implemented in Russian markets. Of course, you should correctly calculate your strengths: take into account the specifics of local prices and the mentality of the consumer. But such large chain enterprises as Zara, Subway, American jeans do well in Russia and bring good income to their owners.

Take note! Tinkov himself built the activities of Tinkoff Bank on Western technologies for remote work with clients. In 2016, the banking institution showed growth in a falling lending market and brought its owner income that was not comparable with the figures of its competitors.

Copying is another recipe for business success. It should be creative and not look like theft. You can use other people's ideas, but adapt them to your experience, your customer, your region.

This is interesting! One type of “permitted copying” is called franchising. Becoming a franchisee of a well-known brand is a good idea for a budding entrepreneur. Opening a franchise business is less risky - you have a better chance of getting off to a good start from scratch and setting the pace for your development.

How to build a business for a beginner from scratch and make a profit?

Today, there are several options for becoming the owner of your own business:

Buy a ready-made project.
Become a franchise owner.
Start a business from scratch.

All options require initial investments, but the first and second are significantly larger than the last. In the twenty-first century, with the advent of online business, you can create a project without actually investing money. The main thing is to have an idea and be willing to do the required amount of work. Activity planning is an equally important aspect, since it is necessary to calculate everything in advance. It's easier to improve efficiency based on an existing plan.

Assessing your own capabilities

There are no skills that cannot be developed, but every person has a set of skills with which he starts in business. It is recommended to analyze your strengths and weaknesses. The next step is to consider how best to use your personal advantages. For example, if a person knows how to sell well, then it is worth organizing a business in which the most important aspects are communication with clients.

As for weaknesses, there are two ways:

Skill development. Think over a program, how to improve the quality of skills, purchase books, find a mentor who will provide support. Let's say a person has problems with financial literacy, then he needs to buy specialized literature and start practicing.
Finding people with the right skills. It is often easier and faster to find the right person, for example, to hire an accountant.

Building a profitable business is a long process that requires maximum dedication from both the businessman himself and his employees or partners.

Choosing a niche and idea

The choice of niche and idea should be based on two aspects:

Market analysis. It is worth carefully studying existing players, potential consumers, and employment. Determine what can be offered to customers so that they change their usual stores.
Personal relationship. It is important to be passionate about business; it is impossible to build a successful enterprise with a neutral attitude.

IMPORTANT! Have a vision, a perspective. For example, an idea may not be in great demand, but after just a few months or years, it will become very relevant. In particular, this includes: food delivery in those regions where this is not yet developed, but the trend itself is obvious.

It is often easier to develop a Russian project, since many residents of the Russian Federation are still skeptical about foreign businesses. By focusing on nationality, you can attract additional customers.

Creating a model

Creating a business model begins with a well-thought-out idea. After defining the basic concept, you need to select a model. Despite the fact that most projects today are moving to the online platform, offline points are still relevant.

The business model is based on the principles of development, marketing methods, methods of promotion and attracting customers.

It’s not always possible to develop a successful format the first time; sometimes you need to make several mistakes and make adjustments to get the desired result.

Writing a business plan

Writing a business plan involves creating sequential steps that will lead to achieving a goal. It also specifies ways to attract finance, investors, qualified employees and partners.

REFERENCE! The outcome of the business plan must contain a specific date when the enterprise will break even and begin to make a profit. It is also important to indicate methods and techniques for dealing with crisis situations that could potentially occur during implementation.

Development becomes easier when the people involved in creating the business plan are well selected. Sometimes it is worth experimenting with the introduction of original, atypical ideas; often this gives quick and good results.

Search for an investor

Finding an investor is one of the most crucial moments, since if you lack your own resources, you need to look for money on the side. First of all, it is recommended to contact your friends. People from your inner circle will be more willing to provide finances. The fact is that they have formed trust, but the personal reputation of the aspiring entrepreneur is important.

If you cannot find the necessary capital among your surroundings, then you should contact those who are interested in the development of these industries. If the project is socially oriented, it is advisable to submit an application to funds or even contact government authorities.

At the stage of searching for an investor, you should communicate with as many people as possible, show the business plan and explain the profitability and prospects of the enterprise.

Governmental support

Every year, federal and regional authorities allocate significant amounts to support small and medium-sized businesses. Some of them are transferred to banking organizations so that they can provide more favorable lending conditions.

Most of the money comes in the form of subsidies and government support programs. To receive a grant, you need not only to have a project focused on solving specific social problems, but also to prepare an impressive list of papers. Submitting an application to the authorities is an option, but you should not count on this form as priority.

Business psychology

Psychology will help you understand the client’s and your own motivation, properly inspire employees, and stimulate them to perform creative and routine tasks. She will tell you how to come to an agreement with a partner, get ahead of your competitors, and make hired personnel want to work conscientiously. Without knowing the basics of psychology, it is difficult to start a business, because the art of sales and communication is built on knowledge of the nuances of human behavior.

You should know! From the point of view of competitiveness, soft skills technologies are in demand today. These include the ability to persuade, find an approach to difficult clients, negotiate correctly, and work in a team. These skills allow a businessman to work successfully and ensure the development of his project.

Common mistakes when building a business

In addition to planning the performance of your business, you should pay attention to other problems that may not be obvious, but still often lead to serious consequences. These include:

Lack of targeting . The more accurately you define the portrait of your client and orient your product (marketing strategy) towards him, the faster you will reach the break-even point. If this factor is not initially taken into account, the formation period may be delayed, which will affect the payback period and may even be fatal for the business. It is better to experiment with a wide range of buyers at the stage of increasing profits.
Inability to delegate authority . The costs of specialist services may have less of an impact on profits than the loss of your personal time. So, for example, if you provide services yourself, a working day spent on documentation will be equal to the loss of a day’s earnings, which may be higher than the services of an incoming accountant.
Saving on specialists . Constantly training inexperienced specialists for young companies is much more expensive than ensuring decent wages for existing ones, since this affects production and increases the volume of production waste due to rejection.
Simultaneous implementation of several projects . It is worth starting a new business project, even if it is related to the main one, only when the work of the latter is debugged and it makes a profit without your participation.
Refusal to use progressive methods . The introduction of new technologies into business processes will allow you to attract new categories of clients and optimize the operation of your enterprise. On the other hand, before introducing them into your business, it is important to understand what goals you can achieve as a result and whether they are so important for your enterprise at the current stage.
The image of the company does not correspond to reality . This problem is especially typical for domestic business, where many still determine the success of a company by its interior design and office space. Excessive expenses for entertainment expenses not only lead to a loss, but can also lead to the conclusion of contracts that you will not be able to implement due to the insufficient scale of your enterprise.
Blind trust in consultants . Even successful entrepreneurs continually learn new things, conduct research, and carefully consider every decision, using consultants solely as a source of additional information and new ideas. If you completely rely on the opinions of others, your business may soon become someone else’s too. However, you should not neglect external specialists either, because perhaps, while working in your field, you missed new trends that will allow you to achieve more.
The price of the product (service) does not correspond to the quality . This bug goes both ways. So, for example, by reducing costs, in some cases it makes sense to slightly reduce the price in order to attract more customers and gain additional profit from turnover. On the other hand, while increasing quality, slightly increase the cost so as not to dump the market at a loss.
Fear of loans and external investments . A significant portion of success for an entrepreneur is determined by the ability to take risks. By refusing additional responsibilities, you are also giving up opportunities that could be decisive in building your business.
Lack of interaction with staff . If there is a revolution among employees, your company could become unprofitable in a matter of weeks, regardless of the calculated indicators. Therefore, it is important not only financially, but also morally to stimulate key personnel, as well as to know whose opinion in the team is accepted by others, and who, for personal reasons, creates obstacles to productive work.

When considering the question of how to make a business successful and make a profit, you should also remember about the formation of corporate policy. You must not only pursue the goal of earning solid capital, but also strive to change the life of the surrounding society for the better, by creating quality products, new in-demand services and stable jobs.

Commerce and Internet

In the second decade of the 21st century, the era of the Internet came to Russia. Virtual stores have seriously competed with stationary points of sale; other types of advertising and new niches have appeared. Internet technologies have generated fresh ideas and also offered good tools for evaluating them.

How to become a successful businessman in Russia - secrets

For Russia, business is still not as widespread a concept as in Western countries. On the one hand, this creates a list of problems, but behind them lies a lot of opportunities. For example, finding a free niche in the USA is virtually impossible, but in our country there are a lot of them.

If we talk about specific secrets, it is worth mentioning the following:

Providing service. Modern consumers are quite demanding, but entrepreneurs do not always provide the required quality of service.
Staying ahead of consumer desires. Most trends in Russia come from Europe and other developed countries. By looking at what is popular there, you can get ahead of customer expectations, that is, start a business in an area that will gain popularity over time.
If we talk about a successful business from scratch, examples are usually associated with projects that appeared at the most opportune time or became a solution to a significant problem. For example, the emergence of supermarkets in the 2000s was very relevant; people wanted to be able to buy everything in one place with comfort and at competitive prices.

Formalization of business processes

Experts say that a businessman has 2 main roles: an architect and a firefighter. Every day we have to solve many “small” problems, perform routine operations, and work on urgent problems. This turns the head of the enterprise into a “fireman” who “puts out the fire” instead of working on the architecture of his business and issues of its development. The project must be structured in such a way that it functions “on its own.”

Formalization of routine procedures is an important condition for development and progress. Business should not depend on a new master, accountant, administrator - they work according to clear schemes and ready-made scripts. This gives the owner time to think about new ideas and make global decisions. Striving to be an “architect”, turning activities into a formalized set of standard procedures, a businessman increases profits and prepares the basis for development.

Scaling

You can treat larger projects within a business in almost exactly the same way.
For example, break down some large tasks into projects. For example, we close 5-6 stores a year in order to move them to new locations or open new ones somewhere else. This is with an established business model. In new directions - we are constantly trying something, it’s good if 2 out of 10 projects survive. This, by the way, is serious luck; the same startup incubators can play the lottery with a chance of 1/50. In general, a medium-sized business can generally be represented as something already tried and tested and new experimental projects that may or may not work. For us, this means releasing and selecting new games for localization, opening new retail outlets, adding any new product to the range, and so on. But projects in this stream have a systemic difference from their first project - sometimes you can safely lose money if the result is worth it. For example, if we release a game not to make money, but to develop the market, we will not mark such a closing point (more precisely, we will mark it, but if we go beyond it, we will simply throw in more money). In the case of a business, if there is a reserve of funds in other companies, there is another point - you need to evaluate the cost of exit “here and now” and when adding additional money. The second may be cheaper, oddly enough. But this is rare, as a rule, when some long-term processes are taking place, which in the end increase the value of the company upon sale. If she will.

In general, even with the greatest enthusiasm, you should not forget two things - how to understand that everything was done well, and how to understand that everything was done poorly. The first is a plan for the year (“What will I have in a year?”), the second is the point of no return.

Reading the “correct” business literature

Those who have already climbed to the top love to give advice. In order for reading books and participating in seminars to be beneficial, you should choose authors who have achieved something themselves: only from them can you find answers to pressing questions. Especially listen to those who organized the case in Russian conditions.

Where to start a business so that the profit level is above average?

Working as a hired worker, you can afford only the essentials - things, food and utility bills. Many take out loans and mortgages, which they have to pay off over many years. You can get rid of debts and interest only if you start your own business.

The most important thing is the psychological attitude. By being indecisive, you are dooming yourself to failure. Beginners and amateurs who are confident in success achieve great success, because enthusiasm causes a surge of energy, people think more broadly. Where an insecure person is denied, a confident person who believes in himself will receive everything. An optimistic person easily convinces others.

You need to work on yourself, change your thinking, believe in success. The first step is to obtain sufficient information about the basics of entrepreneurship, for this you need to:

undergo proper training;
make an appointment with a psychologist;
read motivational books;
communicate with familiar entrepreneurs;
learn the basics of advertising, economics and trade.

According to statistics, many of those who want to start their own business do not actually know what exactly they can do. Among the list of options, they find it difficult to find a more acceptable type of business for themselves. Thinking gets you nowhere. Initially, you need to think about what to open: a production workshop, a commercial store, or start providing services to the public. There are many opportunities in each direction; you can always choose a niche where there is little competition.

Let's sum it up

To ensure the development of your business and derive income from it, you must adhere to five rules:

think with your head and not with your emotions, learn to plan, spend every ruble and every day profitably;
live your business and enjoy it;
monitor and analyze activities using formal procedures;
stay one step ahead of competitors, sniff out valuable ideas from them, and implement them creatively;
learn from those who are worth something themselves.

Important information! Napoleon Hill talked about recipes for a profitable business back in 1933 - his ideas are not outdated. You need to be persistent, persistent, protect and promote your idea, extract income from all possible sources, and believe in yourself. And then success will definitely come to you.

How not to make a mistake

Since wrong decisions lead to loss of money, then you need to learn to make the right decisions. Here are three simple rules:

Take responsibility: for the business, clients and employees. Think not about how to get more money into your pocket, but how to create conditions so that the company develops, customers are satisfied with the product, and employees are satisfied with the working conditions.
Collect three basic reports every month:

Cash flow statement to account for money coming in and going out.
Income Statement to track profits and liabilities.
Balance to see which assets your money is frozen in (inventory, customer or equipment).

Plan the company's work. Draw up a sales plan, expenses, maintain a payment calendar. This way you can control the current situation and set goals that you can realistically achieve.

Count your indicators and don’t make stupid mistakes!

Sales markets

To improve business processes, make sure the product competes in the market. If not, we study techniques for developing a competitive strategy and create a new product that will exceed existing offerings on the market in a number of criteria. Next, you need to understand how effectively the system of attracting and retaining an interested audience works. For many companies, the level of sales is not high enough, not only because the audience is poorly attracted, but also because those clients who are attracted cannot be retained. The base of so-called former clients is growing.