How 25 Teen-Trepreneurs Succeeded And Left World Leaders Perplexed

 

This is actually a title from a book that I recently bought at a discount. I love discounted books and I have been very lucky that this book is one of the books that I bought at significant ROI – at least 1,000%. I have bought several other books with similar ROI – Fifth Discipline (Peter Senge), Origin of Brand (Al Ries) and Good to Great (Jim Collins). These are great books and I was very lucky. Coming back to this book that I just read, the actual title is “How 25 Teen-Trepreneurs Succeeded and Left World Leaders Scratching Their Heads”. It is actually a compilation of entrepreneurs stories by Sabirul Islam – very prolific young entrepreneur. Check him out.

“Anger, frustration and a serious call for change. This is the reaction of today’s youth on being labelled ‘the lost generation’. But are the youth of today really a lost generation?” This is the opening of the book at the Introduction page. It captures the very essence of “perception” of youth around the world today. I remember attending Global Entrepreneurship Summit (GES 2013) in Kuala Lumpur, Malaysia, where youth entrepreneurs around the world were a significant force. They are mostly from 3rd world countries and developing nations. Their “solutions” to social problems around them are very straight forward and inspiring. There was one African youth whose business is selling thumb drive softcopy of text books. Another Bangladeshi entrepreneur selling organic fertilizer – which he gave me a bottle to try out. Are they a lost generation?

This book by Sabirul Islam contains 25 interviews of successful youth role models who are true leaders of youth in their fields and have achieved extraordinary success in short period of time. They are the ambassadors of true grit for youth around the world to emulate and get inspired regardless of color and creed. The spectacular part of all these 25 teen-trepreneurs are all under 30 years old! Are they a lost generation?

millenial age children

Let’s find out some of the key highlights (in Q&A format) from the interviews. If you want full stories, I suggest you get this book yourself. 😉

1. What drives you as an individual to continue to do what you do?

“Knowing that I will be making a difference and serving others. The passion to pass along the things that I have been taught. The freedom and flexibility I create in my life by not working for someone else and creating the foundation for a financially secure future.”- Alexandra DiRuscio Cooper (Founder, Your Life Our World)

2. How have personal development programs helped you?

“They’ve had huge impact on my life. When I attended the first program at age 15, I was still a bit reserved and unsure who I was, trying to fit in. But that one event is what I credit that help me to break through. It opened my eyes what I had been missing out because I was playing small, I was holding back and I was uncertain. I gained confidence and determination.” – Alexandra DiRuscio Cooper (Founder, Your Life Our World)

3. What are three most important attributes you’ve developed as a young entrepreneur?

“Persistence, organization and solid critical thinking.” – Ben Weissenstein (Founder, Grand Slam Garage Sales”)

4. If you were the President, what would you do or what would you change to encourage growth in youth entrepreneurship?

“I’d have lots of programs to teach entrepreneurship and also to give seed money to aspiring young entrepreneurs. There are a lot of entrepreneurs who, with little funding help could really get off the ground.” – Ben Weissenstein (Founder, Grand Slam Garage Sales”)

5. What is the best solution for youth who have tried but failed to get where you are today?

“Try again, again and again! Find your passion and desires in it! If you want to a very successful business just find a very huge problem you see and try to solve it for everyone.” – Boris Kolev (Founder JT International)

Its not just jobs, its about passion.
Its not just jobs, its about passion.

6. In today’s world, what would you ultimately is more valuable, education or experience?

“The most valuable is education through experience. We have to define what we mean by the word education because I think experience is a key part of education.” – Boris Kolev (Founder JT International)

7. You seem to have had many jobs before you became the successful entrepreneur, at what point in your life did you realize that jobs weren’t your way forward?

“What I wanted was spare time doing my own thing, work with my own hours and be passionate about what I was doing – do something I loved. It’s hard to do when you have a job. I cant stand people telling me how much money I am going to earn and hours I am going to work. It’s my life so I am going to decide.” – Carly Ward (Founder, Young Entrepreneurs Society)

8. How has social media helped you to become a successful entrepreneur?

“Social media has been an integral part of my business. I have got some friends of Facebook, Twitter and LinkedIn. I can reach thousands people with social media. My mentor actually found me on LinkedIn. He is a successful entrepreneur and an angel investor. I got random message from him, “I like what you’re doing, can I help in any way?” and three months later he was my mentor and a non-executive director of my company.” – Carly Ward (Founder, Young Entrepreneurs Society)

9. How did you come with the idea to develop the multi-bucket carrier and what was your vision behind it?

“When I was 16, I noticed that people in Africa mainly women and children were walking in distance carrying two buckets of water. One of their shoulders and another on their hands. Using local materials I design multi-bucket carrier that can carry up to five buckets of water. I later distributed the instructions how to make it for local people to produce themselves.” – Emily Cummins (The Serial Inventor)

10. What have been the major challenges that you’ve faced when developing your products?

“The major challenge was my age. Initially some people looked at me as a younger person but when I showed them I what invented they find it very refreshing especially at my creativity. I also had to convince my parents that I was very capable to go to Africa on my own.” – Emily Cummins (The Serial Inventor)

11. How has travelling helped you to become the inspirational figure that you are?

“I believe the fastest way to inspire someone is to be inspired. The fastest way to inspire yourself is to do what you love and invest in yourself to feel alive. For me I gain that through travelling. I love to fly and be in the air, experience new culture, be in transition, meet new people and be stretched out of my comfort zone. It’s where I find perhaps my greatest appreciation for each moment.” – Emily Gowor, The Word Artist

12. Are the youth of today good enough to be world leaders?

“People will believe whatever they want to believe. People who consider youth to be unfit to be the world leaders are firstly, judging based on their lenses. Is there a rule about what a world leader should look like? If there is or was, I didn’t learn it in school. I haven’t seen any two leaders following the same script. Someday we will be old as well and new youth generation will come.” Emily Gowor, The Word Artist

13. What would you say unique about yourself?

“I consider myself a normal kid. The only difference is that my extracurricular activity has been business instead of sports or music. I helped my mum’s business since I was nine years old.” – Jason O’Neill, Founder, Pencil Bugs

14. Who has provided the most support to you during your journey as a young entrepreneur?

“My parents definitely are my biggest supporters. Without them there would not even have been a business. I sometimes hear other young entrepreneurs say that they run their business alone but that is usually not true. It takes a lot of help from many people to make someone successful. Even the most successful adults have people on their team.

15. How did you manage to pull yourself out from poverty in Brazil?

“The only way you can leave poverty and negativity behind is by being able to rise above your circumstances with your mind first. You need to be self reliant, especially if you have no role models. Leave the bad influences and friends behind, and make replaced them with books as companions. Set goals and not give up easily until you achieve what you want.” – Pedro De Abreu, Co-Founder, Moofaces

16. What are the change society needs for youth at young age?

“It is important that youth and society in general to open their eyes around them. Stop being so self-centered. It seems many focus on unimportant things such as hair, make up, clothes and adults are always concern about money and what their neighbours or friends have. We also judge others (youth and adults like) too quickly. We need to focus on the good in each of us.” Cassandra Perkins, Founder, Global Voices Reaching Out

I have purposely selected the questions and answers to provide breadth of the context and topics. Check out the full interview in this book. “How 25 Teen-Trepreneurs Succeeded and Left World Leaders Scratching Their Heads”

In conclusion, I don’t think our youth is a lost generation wherever they are. In fact youth today is a force to be reckon with and I think we should embrace them with open arms. I also believe the more senior generation that has greater responsibility should reach out more to youth and groom them further through providing various opportunities including the basic such as time and thoughts. Its more than enough for a start.

Brickbats please send to donkhairul@gmail.com

Great Leaders Teach

Leadership is today’s buzz word akin to management in the 1980’s. You probably have been asked at least once, “Are you a leader or manager?”. Of course the right answer is “leader” because it is incumbent that all of us must be one, at least to be relevant in today’s organization. But how to become great leader?

Robin Sharma once in his book said that a leader decides which mountains to climb and a manager decides how to climb it efficiently. I think that analogy makes it easier to distinguish the function of leader v. manager. I juggle both most of the time and I believe most of us do the same. Right?

I was at a client’s office late afternoon last week. I was waiting for the Chairman long enough to strike a conversation with one of the managers, whom happened to be the Human Resource Manager. She is leading the organization’s academy and we exchanged smiles – and we talk. Replying to her question, I said my coaching is targeted to top talent – making top talents even better and hopefully they stay longer. Besides, my leadership program for managers and leaders is to enable them learn how to teach. She shared her stories of going through a particular coaching program, NLP programs, EQ and so on. She is a very prolific manager and hungry for new knowledge. She is quick to share her coaching experiences with talents around her but except these talents are not internal but external to her organization. According to her it is not possible to share her knowledge internally because no one would appreciate – she hasn’t tried yet. She hasn’t got over the feeling yet to drive the coaching initiative for her organization. She doesn’t know where to start. What a waste.

Large organizations are endowed with this wealth of experienced managers and leaders at all areas. They are groomed from ground up (most of them), defended the organizations through thick and thin and possess deep knowledge of the organization trade secrets. Unfortunately they don’t have the platform to showcase and transfer this latent and tacit knowledge embedded in them for years. So much knowledge sedimented in the same body and brain for years. These are not top leaders and senior management that may come and go – I am referring to prolific managers and leaders that are on the ground; servicing the customers and take the brickbats from their direct reports. We must do something.

One of the ways to scoop out this deep seated knowledge is through making these managers and leaders learn how to teach. This “teaching approach” has been used by General Electric, PepsiCo, Southwest Airline, Home Depot, Cisco, DARPA and many global organizations. Just look at yourself, someone must have taught you well. So it worked! Hence, we need to make our organizations teach and learn from each other. Best if the top management learn how to teach their experiences and the rest will ultimately follow.

You can start by getting the managers and leaders go deep down themselves to truly understand what is it they are very good at. This is call Teachable Point Of View (TPOV). Jack Welch (former CEO of GE) in his own words said, “As a great leader, you need to have teachable point of view.” TPOV helps managers to focus on their ultimate strengths and dissect them into learning curriculum. Say for example a Marketing Manager may be good at product launching. So he will create his TPOV based on product launching. He will gather all his experiences related to product launch (its successes and failures) and organize it to match his organization needs – and the best part he is doing this to teach his engineering department about product launching! This applies to all other managers and leaders from various department.

Coming back to the Human Resource Manager, her eyes lit up when I shared that with her. She now plan to make 2015 as her experimental year from just a manager to becoming a great leader through teaching. Wish her good luck!

Brickbats please send to donkhairul@gmail.com

Management – Performance Now

“The management boom is over; the time for management performance has come.”

                                                                       Peter F. Drucker; Management: Tasks, Responsibilities and Practices, 1985

Today’s management is all about performance and results. Management can be found in big corporation to government to non-governmental organization to military and self. Management is an organ that sits inside a body and cannot exist on its own. Although much has been theorize on management, many institutions including self faced with inability to harness the results from management. To be an effective executive (or manager), it is important to have knowledge, be discipline and focus on action. Those are elements of management. Above all successful executive is determined by its ability to use management as vehicle to achieve its goals – via purpose and mission.

A great business must have clear and definitive idea on how the business should be run. The same goes with executives and managers. They need to crystallize what is their purpose and mission at work place. These later needs to be aligned with the company they work with. However, most executives come to workplace hoping to be told what their purpose and mission are. They thought the organization goals are their goals. While executive must make company goals their goals, it is unlikely they are solely responsible for the business goals of total company. Instead they need to have own plan what contribution they can make. It is with regret the reason why so many executives unable to perform, because they have no goals to work on at first place.  The reality disturbs me greatly. Often when asked what is your plan for the day, many executives have no clear ideas what to do. Some responded referring to work or job they are currently doing. But work and plan is different. Work is a subset of plan. Plan should also include other facets of the executive such as reading, networking, getting fit and so on.

Through management, purpose and mission will be broken down into work and processes. The central to this is customer. Without customer the business (or executive) has no reason to exist; at all. Management needs to ask four main questions. What is our business, who is our customer, what value is to the customer and what will our business be. The rest of the work and process revolves around these questions. It cuts across strategy, financial, talent, logistic, administration, marketing, innovation and so on. Only then the management become useful and productive. In other words, when management has answered all these questions, the rest of the departments must throw its weight to this goal.

The development of managers must take into consideration all these. Only then the manager will be able to acquire today’s skills for him to be effective tomorrow. “What brought you here won’t get you there.” , said Marshall Goldsmith. Effective managers must learn how to become execution specialist. Because only results count, not efforts. Manager development is the responsibility of the individual, though company and superior have an important part to play. The aim of it is excellence. The development of a manager is to enable him or her develop abilities and strengths to the fullest extent so the goals can be attained. Ultimately the manager himself must be able to control his own performance by understanding his strengths and weaknesses. Many times when i interview executives and managers, they stunned by “what are your weaknesses” question. Majority said no one has ever asked them, of course they grumbled and took some time to answer. People that answered “what is your strengths” on the other hand got the answer wrong. They usually say, “my strengths are i am a good comunicator, honest, punctual and hardworking”. My reply is, “that’s my basic needs”. they startled by that respond. Organization really need to deal with this urgently, otherwise people come to work with all those qualities that are not strengths but basic needs.

 

Organization can use this as a good start to develop managers to become more effective, but more importantly becoming execution specialist. By getting more things done, organization will become productive and growth is imminent. Consequently it will be able to take more risk to go to new markets in search for business expansion beyond boundaries. New jobs can be created as well as customers and innovations. Ultimately through management the organization will have itself sustainable business strategy and all prepared for future succession.

 

p/s: Management is going to be the tool to boost organization productivity. We dont talk about management as in cost cutting, downsizing, penalizing people and other negative connotations; but management is a good model to more things done.

 

Brickbats please send to donkhairul@gmail.com

Leadership Code

The last 15 years the center of the economy has been shifting towards Asia. This trend will continue. In fact it is eminent that the standard of Asia will become the de facto standard of the world. These exciting opportunities pose a big challenge for Asian because we will need to have global business skills to be able to serve both domestic and international markets. We need unique and high quality leaders to make better choices to respond more rapidly to change. We need effective leaders.

Leadership theories are around us. When you Google “leader” you will get 571 million hits in 0.11 seconds. Effective leaders must be able to renew and reinvent themselves together with the organization they lead. What succeeded in the past decades may not work in the following decade. Leaders must also be able to draw learning from their past experiences; successes and failures. Leaders that never fail cannot be trusted, because it means they are always in the comfort zone. They will fail the entire organization without realizing it. So, how to create leaders that are adaptive to change, push the boundaries and yet has net success rate?

In a recent leadership study conducted by Dave Ulrich, Norm Smallwood and Kate Sweetman titled Leadership Code found that effective leaders shared around 50-85 percent of the same characteristics. This study later concluded that there are five rules of leadership that embody leadership DNA.

Rule 1: Strategist (Shape the future)

This rule suggests that effective leader answers the question “Where are we going?” and make sure that those around them understand the direction as well. They envision as well as create the future for the organization.

Rule 2: Executor (Make things happen)

This rule suggests that effective leader knows exactly how to ensure things get done. They translate strategy into action. They know how to make change happy, to assign accountability, to know which decisions to take and which to delegate and to make sure that teams work well together.

Rule 3: Talent Manager (Engage today’s talent)

This rule suggests effective leader optimizes business by drawing talent to their organizations, engage them, communicate extensively and ensure talents turn in their best efforts. They generate intense personal, professional and organizational loyalty. They also help talents to commit and find meaning at their work.

Rule 4: Human capital developer (Build the next generation)

This rule suggests effective leader builds a workforce plan focused on the future talent and know how to help them see their future careers. They prepare talents for future challenges and manage succession so they readier to lead when the time comes.

Rule 5: Personal proficiency (Invest in yourself)

This rule suggests effective leader learns from success, failure, assignments, books, classes, people and life itself. They are passionate about beliefs and interests, they expend an enormous personal energy and attention to whatever matters to them. Proficient leaders have strong moral code that connects values to actions.

At the end of the day, effective leaders need to have balance when performing all the five rules. Since rules are just rules, the inaction of a leader will violate the entire leadership code and other leadership theories. Leader who can’t walk the talk is not effective leader. Talk is cheap way to show you know a lot (but do too little). Therefore he or she must be able to self-manage and self-lead to be successful effective leader.

This article is based on the author’s view on leadership and Leadership Code by Dave Ulrich and team, which he found refreshing and easily connected with. By no means, this article a respresentation of Leadership Code itself. For more on Leadership Code book, please click here.

 

Brickbats please send to donkhairul@gmail.com

PTMBD_Interview with Pak Agus from REFANES

If you have ever been to Indonesia you would realized that it a country that capture the spirit of entrepreneurship substantially. You will see many people involve in businesses from the petty traders to IT geeks.

I was at Padang a number of times where I saw “mobile” cigarette seller, rent-an umbrella (while raining you will see a lot of them) and street performers. A few times I was at Bandung to see fruit sellers (selling durian by the big basket and very cheap), songket traders and IT geeks.

During one of my visits I was introduced to this person where I have some work to work on with him and the friendship lasted until today. Having done my own business but I wasn’t successful, thus I am always eager to meet someone who has made it to the top. His name is Agus Widodo. I call him Pak Agus.

As soon as my project ended in Indonesia we maintain good relationship and exchange ideas. Pak Agus runs his own enterprise called REFANES other than being an IT Project Manager. I was very impressed with his enterprise because it is very successful and classic. After some time I thought it would be good if I can share his experience and some stories about his business, perhaps some other people might get inspired or perhaps expand their own business.

I did an email interview. I sent him a set of questionnaires and he has to answer at least 5 questions but he did 7! J  The main reason I did this interview is because Pak Agus business is a good example of small medium enterprises (SME) that is thriving. Besides, it also an exemplary model of how seemingly traditional and mundane business can grow exponentially and profitably by leveraging on modern technology.

The interview below has been edited for pleasant reading experience and context.

 Q1: Can you tell us a little bit about yourself, your business?

My business is in creative industry and my company is called REFANES. Our main product is innovative and creative Muslim fashion clothing especially for kids. We have been in business for about 4 years. Our main market is Indonesia and we are currently exporting regionally and other parts of the world such as Middle East through our agent distributors.

I am handling the management of the company and my wife is focusing in product design and communication to our customers. This is relatively a family business but we are expanding rapidly. Our karyawan (workers and artists) and distributors are mainly Indonesian. But we are open for foreign distributors if the model is right.

Q2. What are the products that you carry?

Our main products and very popular currently are the following:

a)       clothes and tudung (or jilbab) for kids and teenager

b)       dolls

c)       any bags with same character with the clothes

 Q3. Who are your market segments? Local and International?

Our main market is Indonesia (local). It is  close to 250 million population strong and majority is Muslim. If we can cover the whole Indonesia it would be good enough for us. On top of that, we also have exported to other countries such as Japan, Malaysia, Singapore, Qatar, US (California) and Saudi Arabia.

Basically, wherever there is Muslim population we would like to be there. You probably should take a look at our designs and you would be surprised how creative, innovative and modern Muslim world now, without compromising the faith. I am glad to be in this business.

Q4. How much is your business turnover/sales per year?

Our current turnover is around $ 500, 000-$700, 000. We are still growing and we are working hard to fulfill the market demand. I think the potential upside is still very huge. We hope to expand and add up more karyawan to meet those needs.

Q5. How do you see the prospect of your business with the current economic condition?

While the economy seems bleak, we are confident the business thrives. In today’s economy especially while it is interlinked, there are parts of the world that is not affected such as Middle East and parts for Asia like Malaysia.

Our strategy is to maintain our creativity and innovativeness because that is our main differentiation factor. Customers buy on differentiation regardless of price and economic state. They may not buy now but we need to create presence so when they recover they will buy from us.

Q6. What are your key success factors?

Our key success factors are our ability to constantly coming up with new creative ideas and new design in sustainable manner. In this aspect, I think my wife and her team has done a great job. It is not easy to get someone dedicated and consistently producing good stuffs.

On the other hand, we also keep improving our internal manufacturing process. We keep investing on new machines so we can hire new karyawan (workers and artists). Our production is still manual whereby we use the foot pedal sewing machines. Yes, the production is limited by that method but we maintain the high quality of our product. We created numerous jobs at the same time and still profitable.

Q7. What media channel do you use to engage your customers?

Just like any other business, we are involved in trade shows, magazine and social events. We are social products, so we need to be where the society is. Our distributors also our walking advertisers, with their good service they attract more customers. With our high quality clothing, we attract more agents and distributors. It works both ways.

We’ve been on blog for quite some time. And recently we jumped in to social media such as Facebook. In Indonesia there are close to 25 millions users on this and we are tapping into it. With social media we are able to post videos on our events and fashion shows for children. They love it. We gathered a lot of Fans/Friends of our products. We also have a website that has online catalogue. We also communicate with the distributors and agents online where ordering can me made from our website. Lately invested in SMS as another engagement model. 

We believe in communication and that’s why we invest in all these channels. We want to maintain good rapport with all our stakeholders so we can grow together profitably.

Children is REFANES main customer

Thanks Pak Agus! See you at Bandung soon! 🙂  

If you have other entrepreneurs from small medium enterprises that is suitable for this type of interview, please email to entreprenovator@gmail.com

You Need Hands!

I was captured by the following paragraph i read in Paco Underhill‘s “Why We Buy” book. Indeed a very good book especially if you want ideas but for a retail business, this is  a must read. Let me recite the paragraph:

“A woman is carrying a handbag, and that she’s wearing a coat, which she’ll probably want to remove once she’s inside the store, meaning she’ll have to carry that, too. God gave here two good hands but she’s shopping with one. If she selects something, the free hand carries it. Now she’s down to no hands. Maybe, if it’s small and light, she can tuck the purchase under one arm. Perhaps she’ll sling the handbag over a shoulder or forearm. Then she’ll have….let’s call it a hand and a quarter. If she picks one more thing, though, she’ll run out of hands. Only an extremely motivated buyer will persevere. Human anatomy has just declared this shopping spree over.”

What do you get out of that? I said, “I need my hands!!”. And i want to relate that to strategy.

Having extended hands definitely move you faster!

Strategy, in that story is our “business” hands. If we are too occupied or “full” with strategies we are going to get stucked. Just like that woman’s hands. There was one CEO i know that has his hands full of strategies until he can’t carry it anymore. In our hands, we can only carry certain things for a limited time only. then we have to unload.

With our strategies (hands!) also, business can pick and choose what they want and what they do not want. For example for a food retail business, they can choose to sell inside the mall or outside the mall. Both require different strategies. What if they want to sell both inside and outside the mall? Chaos! I have seen in Malaysia, whereby few retail brands try to have “captured both sides” of the mall but fail to do so because people are confuse. Customers are confuse on two things. Firstly, why do you need to have two outlets in the same mall? And which one should i go to? One thing about customers, when we are given options to choose most of the time we fail to choose. Customers go somewhere else to other outlet that has single message per outlet.

On the other hand, for business to business (B2B) businesses, having “hands” definitely very important and have to set it right from the start. i recently learned that large companies operation is very complex. A lot ogf stakeholders and usually steps taken are far too many and planning is on very long range too. Therefore, making sure the “hands” are picking up the right strategies are very crucial.

View Marketing Plan Breakthrough S6PEC HERE

Alternatively, business hands also can be extended. Say you want to expand to new market in new country, you definitely cannot do it alone. We need a helping hand. This is where friendly parties, partners, sponsors and networks play very important role. We need to talk to them, identify and select them accordingly to become our extended hands for our business.

I recently met one CEO of a growing global university and he shared me a story. he said that in some African countries, people are still don’t want to spend on education. people save money under their pillow because they are so worried and have low access to information. they don’t trust bank so much and they live a traditional life. he also added, to set up a global university there definitely a big challenge, but the moment the country wakes up (just like China!), it is going to give a handsome return. So how he plans to do it? Find strong local partners and support them. This is because local partners, most of them have less money and do small trading business. The idea of effective and efficient are definitely alien to them but they are hard working.

I personally found this approach is very interesting and unique. Nevertheless, a good example of extended hands are needed if you want  to go beyond your home base. But what if your hands are still full?

One, is to pray to God for a stronger back and not a lighter loads! Two, you need to prioritize. Prioritization is easy said than done. Even i sometimes overlook prioritizing, especially during busy period. I remember someone said, “when the going gets up, everyone is very happy!’. This refers to stock market bullishness, when it’s up everyone starts to forget basic things. But it certainly helpful to get our priority right.

I normally write down and prioritize based on time, processes and outcome. Lastly i also measure ROI. Sometimes, certain things you do is very painful but it’s going to give the highest ROI, so i choose to do that first. But as for you, you need to decide what’s best.

I will discuss more on Maven marketing in my next post, how to use it as your extended hands for your business. Cheers!

Marketing Plan Breakthrough S6PEC is READY! Buy it HERE (ONLY USD 19.90 WITH LAUNCHING DISCOUNT)

EIGHT Tips on Pricing


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Pricing is super important for “making it sells” and “making your profits”. Agree? But often times for new business owners, they are sometimes overcharged and on the other undercharged. Thus only profiting is just a dream. Because they lose both ways; overcharged they get less sales, and underchared they make losses for every additional output.

What are things to look for when we do our pricing plan? How to determine the correct pricing strategies for our product? Here are EIGHT Tips on Pricing as a guide.

1. Have a pricing plan
– i always emphasized on having a plan including pricing plan. it’s like this, before you launch or introduce your product/service, i suggest you to take a piece of paper and write down what you plan to sell and how you plan to price it. write it down and see it for yourself. does those information make sense to you?

2. Know your segment– different price is for different segment? Yes, this is fact. i know someone who sells women dress that he gets from a supplier price $45 for segment A and charge $95 for segment B. Segment A receives the dress in a plastic bag and segment B in a striking colored brown bag. Got it?

3. Know your cost
– many costing methods covered in my book Marketing Plan Breakthrough S6PEC such as cost plus, mark up and so on. But the gist is, “know how much you paid for the product”. The cost you should include are raw material, transport, miscellaneous and time. Then you break them down into per unit cost to see how much is the cost distribution. if you are running a restaurant, factor in your fixed cost like rent, overheads and utililities. If you are selling services, most probably your additional unit production lessen at least by 30% – 50%. So do the math!

4. Set your pricing point
– pricing point should include your minimum profit you want to make. Say you use mark up pricing at 20%, therefore your $10 cost price should be sold at minimum at $12 because you marked-up 20%. But as question whether 20% enough for you to sustain business? Therefore, when you set pricing point please include your risk factor as well. for example slow season, pilferage rate, spoilt and so on.

5. Multi pricing
– lately i realize multi pricing can give greater profits if done correctly. i have a friend who runs a toy shop and whenever certain toys on high demand, he will increase the price that is enough to make him keep up with the competition (when he priced lower, customer may think his product is inferior and when he priced too high, customer may think it’s too expensive!). what he does is to gauge the demand and look around pay attention to his customers and competition. he will reduce certain less-demanded toys and display it at the main storefront. when customers are “captured” with the cheaper toy, he goes in and then he will see the high-demand toys and the rest is better sales and greater profits. customers and sellers happy!

6. Keep your overheads intact
– this is important when you have sales team working on project selling (involve in large contracts and items) or you work with distributors. Sometimes, after working with them for a particular project, you may realize your cost run too faraway and eat up into your profit. i recommend to have constant check and monitor the performance vs incentives vs achieved sales

7. Scan your environment pricing
– it is common now to have competition in any business you go. there are always someone who has done it first, therefore i recommend to do a little benchmarking. but not getting overwhelmed with the data, but rather “be in the know”. For example consulting is becoming more expensive and sometimes too expensive. are you willing to make it cheaper and still offer the same or greater material and content? 🙂

8. Trend
– when the trend comes, demand will surge like crazy. i still remember a friend of mine who imports Tamagochi (virtual pet) 10 years ago. it was “D” thing and it was super hot. One Tamagochi can sell up to $40 and that is consider average price. He bought tonnes of those pets and within 2 years those pets is a fad. no one plays Tamagotchi anymore because many already can afford Sony Playstation and so on. Watch the trend because when the trend goes off, you are sure to make losses!

Hope it helps! For further marketing strategies and how to have a solid marketing plan, please view my book Marketing Plan Breakthrough S6PEC or DOWNLOAD SUMMARY HERE.

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