Top 10 Lessons from Small Business Big Money by Akin Alabi (Book Review)
Hello and welcome to Stepwise show, I will be reviewing 10 lessons for in the book Small Business Big Money. The author, Akin Alabi, focused on budding and small business owners, people that want to get started in business. Without further ado here are 10 lessons you can go away with.
Lesson one; the odds are stacked against you as you’re more likely to fail than succeed: This is something most entrepreneurs and new business owners should be aware of. If you decide to go the path of owning a business and running a business, you are more likely to fail than succeed. A report from the United States Bureau of Labor Statistics states that 20% of new businesses will fail in the first three years of opening 45% during the first five years and 65% during the first 10 years, only 25% of new businesses make it to 15 years or more. The failure rates increase when trying to do business in Nigeria, where the cost of starting and doing business is high, and the conditions are prohibitive. This is not to scare you, but to let you know that your reasons and convictions for starting any business must be really strong.
Lesson two; don’t do what everyone else is doing: There is a tendency for people to copy others when they see what others are doing is working. The fact that it is working for others does not mean it will work for you. The problem here is everyone else is doing these types of business. This leads us to one of the issues identified in the book, which says don’t create a product or business and then look for customers. Rather, look for what people want and then create a business around it. An example of this, it is easier to run a successful restaurant, where there are hungry people, instead of opening a restaurant and going to look for hungry people.
Lesson three; always try to be the first in your marketplace: Running a business right now can be really competitive, and a lot of copycats in the market, people doing the same things as other people are doing and doing the same things as other people already did. To stand out in your marketplace or be number one, you must have a Unique Selling Proposition (USP). If you can’t be number one in your market, your USP would let you stand out. To create a USP three conditions should be fulfilled:
- Adding a special feature to your business,
- Targets in a sub sector.
- Disrupting space.
An example of a company that added a special feature to its business is Domino’s, which offers 30 minutes delivery time for your pizza in some regions, or you don’t have to pay for it. Targeting a sub-sector might include selling to customers that want more freedom over the phone’s operating system like Android offers, or disrupting the space would be like Uber and Amazon disruption.
Lesson four; you must have a reason for advertising: This can be to get instant results like sales or contact or to create visibility and mindshare among your potential customers. Advertising for your business can be tricky because there are a lot of ways you can get it wrong. You should always have it at the back of your mind when advertising for your business, you must always establish credibility. This is because you’re still a small business owner and nobody knows you. For people to be comfortable doing business with you, they have to know that you’re a credible person, you must show that you are the real deal. The three ways to do this are:
- Including testimonials in your ad: how to do this is to get some people to use your products and get honest feedback from them. include these in your ads.
- Includes getting recommendations from experts, getting professionals or industry leaders to endorse your product will really go a long way in making your ad be more effective.
- Include statistics from surveys, carry out a survey about your product, and convert the results from the survey into percentages. For example, ‘90% of our customers recommend our product to their family and friends because of the durability.
This will make your ad sound more convincing and effective.
Lesson five; word of mouth is everything. Do you know according to Nielsen’s 92% of consumers believe recommendations from family and friends? If you check your last purchases at least two to three of those buying decisions were made because of something your family or friend or someone you know said about that product. Word of mouth is a less expensive, far more effective way of advertising your product without even spending any money. Six ways of stimulating word of mouth include
- Offering good customer service
- Staying in touch with your customers even after they buy from you,
- Rewarding your customers.
- Using influencers as opinion leaders
- Outstanding product and service delivery
- Rewards for referrals
Lesson six; do not reduce your prices to make more sales. People are not looking for the lowest prices; they are looking for the best deals. No one wins a price war. In a country like Nigeria where the cost of business is high, reducing your price is suicidal. Reducing your price will also force you to reduce the quality and service delivery you offer your customers. Two ways you can reduce prices without losing out are:
- Offer discounts for a period of time
- Use low-price items to entice customers into becoming loyal customers so they buy more expensive products from you in the future.
Lesson seven; don’t sell what people need to buy, sell what they want to buy. Before you start a business, you must ask yourself, ‘do people really want my product or service’? Do not make the assumption that people will buy anything you sell. What do you think sells more between business articles or sports articles. In all instances, sports articles come out on top. Even though we need business articles, more people would rather go for the sports articles. Take note of these whenever you want to start out your business.
Lesson eight; delayed gratification is key to keeping your business going. When you start to make money from your small business, reinvest it into the business, don’t just spend it. A lot of Entrepreneurs make the mistake of going on a spending spree when they make any sales from their business. Build your business no matter what it takes; reinvest into the business, don’t spend the money yet.
Lesson nine; don’t ever close your business. Always find a way to stay open. On Sundays, public holidays, and days that you’re tired. If you can’t be in the business physically, employ someone. You can put your business online so people can still order from you when you’re not open. You can put your number in front of your store so people can send a message or order from you.
Lesson ten; don’t quit your job to start a business. Starting small is key, make mistakes and learn from them as you grow. The uncertainties involved in growing a business are a lot. When your business begins to make as much as your job or even twice, maybe we can consider quitting the job.
I have also saved you some bonus lessons you should also use.
- Don’t start a business because you don’t want a boss, the customers will be your boss.
- Don’t start a business If you want to make instant money. There’s a reason it’s called growing the business.
- Also, don’t start a business if you don’t want to work long hours. Your business is your baby and it will always be on your mind.
If you would like to gather some more information on how to get it right in your business this year, I would like to recommend the book, Small Business Big Money by Akin Alabi, in which some of the core messages in the book are summarized here. They are authorities in the area of business development.
If you would like to buy this book please check the following links: