Entrepreneurship Decoded for Small Businesses

1. Course Introduction: Hello there and welcome to the entrepreneurship. Simplify it for small businesses Crash Course. My name is NOR and I will be your instructor. In this course, we will focus on the most critical aspects of starting a small business. Taking all the things that don't get any measurable resort and focus on what matters the most. We will kick start this course by talking about why people buy things and how to create products that people want to spend money on at most by rather than making nice to have but not urgent product. Then we will talk through examples about the importance of meeting down you'd witness and focusing on a small group of customer. And I will teach you through examples, how you can simply find your profitable niche. Once you have what the customers want, you will look for different methods of how to develop an affordable solution. The customer can afford to buy your product. Once we do that, we are going to use different examples from different industry to talk about the first strategy for marketing and distributing your product to the end customers and how you can plan for making a sale. Once you have your marketing and distribution channels all tight and in place, we will talk about how you can build the trust with the customer. And I will show you simple message of how you can generate your first sales. At the end of the course, we will tie all things together and design a profitable business model that drives multiple source of revenue, your business and generate more sales. I will show you through real life examples how different businesses leverage different business models strategies to drive more profit to their business bottom-line, have make more profit. Now, before you get excited and buy this course, I must remind you that this course is not for someone who is dreaming or expected to make a quick buck in a short time. However, I promised, if you follow the knowledge of this course, you will get measurable result in a reasonable period. I also would like to inform you that I designed this course. Mainly I run a business with a product rather than a business with a service. However, I personally believe the fundamentals apply to all kinds of small vertices. If you are willing to be optimize enough and translate that knowledge into your business or right? So if you want to learn how to use a size four goodness, and make some money while having some fun in this course is meant to be for you. I promise I will keep it simple, short, and enjoyable. 2. Entrepreneurs Mindset: Hello there and welcome to the party. This is nor your instructor, and I'm so excited that you've joined me on this intrepreneurship simplified for small businesses crash course. Now if you already, Let's get started and paint strokes and brushes of your small business. But before we do that, let's just talk a little bit about your mindset and setup the clear expectation when it comes to starting your own business. So the first thing that you have to understand that intrepreneurship is not about becoming famous, right? That will actually distract you from starting your business. Becoming famous is only an outcome of a successful entrepreneurs, okay? The second thing that you have to understand that doing your own business or starting your business does not require you to have any kind of credential. You can't do business or right, if you have the ripeness kills. The third thing that you have to understand that starting a business only for making money is not the right reason or good reason to start a business in the first place. Yes, you want to make money, but you also want to deliver value to a customer and you want to serve a community. That's actually a long term vision when it comes to starting a business. Okay? So what is this entrepreneurship is all about? And what intrapreneurs are all about the first place? Well, intrapreneurs are kind of unique people. They can recognize cutters and they can't see a problem in the marketplace and they can actually identify what kind of carriages a customer might have. Then we'll actually say, Well, listen to the customer carefully and understand what the customers want and need and desire. Then they can work with team members or by themselves and develop a solution for the customer. Was they had distribution. Now they can pitch that to show to the customer. For a customer can actually be benefits from the solution and sexy intrapreneurs now, with the integral is doing all these activities. They want to make sure that they are making money and they are profitable. Otherwise there is no point in starting a profit business in the first place, right? So the primary difference between a small business, add a unicorn business. Small business does not have a lot of resources and money to spend on starting a business or running a business. Therefore, it cannot with its resources or it's your money at everything, like a unicorn business. It also should not distract itself from doing business and doing things that the customer does not care about the most. Therefore, the small business need to focus on two key activities. The first activity is to create a product or a service that the customer actually value and the customer want to buy. And the second thing is to sell that product to the customer. That's it. These are the two primary activities for this moment needs to do. And therefore, that will actually focus our attention. Now, let me clarify 1 that so many starting intrapreneurs right now, they believe that becoming an entrepreneur is something that spark of genius or something that is cool or something is unique. Let's clarify things. Intrepreneurship is not about being cool, is not our being genius is not about being smart. It's not about all of this trauma. Intrepreneurship make it in simple words, it just about the business, that's it. So we want to take all drama out of the game and we want to simplify it to simple business. Alright, once you do that, now we have measurable results and we can assess if our business is going profitably or if it was working in the first place, okay. No. That would actually make us focus on primary activities when it comes to building our business, the first thing that we have to focus on, which is we need to create a product that the customer is. What if we have a product that the customer does not want? We have failed as intrapreneur, right? The second thing that we want to focus on that we need to create an affordable solution. Therefore, we want to create a product. We also want to make it affordable for the customer to buy. If not, the customer can apply resolution and you felt as an intrapreneur. The third thing that we have to do it we want to establish marketing channel with the customer. Put it in simple words, is that we need to make the customer aware of our product and when we need to promote our product to the customer. And if you fail to, that, we fail as interpreters. The first thing that we have to do is we need to establish a distribution channel with the customer. So what's the distribution channel with a distribution channel is a place where the customer can buy your product. And if we fail to do that, we also fail as intrapreneurs. Now, the last thing that we have to establish trust with the customer, if we had the first force things and we don't have customer trust, we cannot make a sale, therefore, we cannot make a transaction with a customer. And that what we care about the most small business is to make as many transaction as possible, so we can't become profitable and scale our prisoners as best as we can do. Now, once we do all these parts together and we have transaction now, we want to make sure that our transaction are actually profitable, and that's why we need to make a profitable business model. We cannot make a transaction and we are losing money. That's a disaster, and that's makes us failing as interpreters. Okay, so these are the primary things that we are going to focus on in this course. Making a product like the customer one. Making the product affordable, create a marketing channel with the customer. The students are products in the marketplace, building trust with the customer. And then we need to design a profitable business model. Okay, So these are the primary things that we are going to talk through this course. Now, after this video, you are going to see your assignment and I advice you to slow down and goes through the assignment, write this assessment is important. I designed this assignment so you can actually benefit the most and you can go through your own business. Don't rush the process. Okay. So I got your back though. Okay. So that's going to be for this video. I will see you soon. 3. How To Find Your Customer Wants and Develop Your Niche: Welcome back. In this video, we are going to talk about the first steps when it comes to building your small business, which is your customers want. And to understand that we first have to understand why do people spend money in the first place? Well, people spend money for many reasons. One of the primary reason of why people said money is that because they want to cover their basic needs and these needs food. People need to eat food without. People cannot survive. People also need basic clothing. They need to cover their body. The third thing that the people need, it, they need safe and secure shorter. Now, these three things are the primary needs for every human. It doesn't matter if they leave in a less default economy or in a more advanced economy. However, where people live in a more advanced economy, desktop to shift from their basic needs and they start to move into their wants. And that means that the people start to invest more into higher education. They need a much better opportunity. They also store to buy a more luxurious products and services and actually become a fan of if tarsier and more luxurious lifestyle. And they now start to invest more into more expensive gadget AT tools. These tools actually would make the customer very sophisticated. People start to think about the sophistication of thing, it rather than the basic needs of things. At this point, people actually start to care about the image of the product and the last of the product, rather than the product itself. You have to also understand that at this point, people actually feel they have the feelings that they have a lot of work and they need to be entertained. They need actually seem to be convenience. Therefore, they don't want to cook and they don't want to do the things that could be covered by other, they actually become lazier, right? So all people also at this point is taught to care about the experience of sync and they want to try new stuff rather than actually the product itself. They get bored easily and they want to try a new experience over and over. At this point. People also want to be and feel unique, didn't want to address the same. They don't want it took us Tokyo stands, they don't want to look the same and so on and so forth. And that's why you find successful brands such as Apple or Z, Chanel and so on and so forth, invest a lot of money into this market because they understand that that's a customer at this market are sophisticated enough and can actually buy this kind of product and you would not find them in a list of all the corner. Now, these things on the surface might feel that we are developing and we are moving forward and which is a great thing actually to advanced. But however, in these things, even if it makes us feel happy on the surface, it's actually bring us a lot of challenges, alright, and weak taught become happy when it comes, for example, to many things. Say for example, we don't come happy with ourselves and we have challenged with yourself, we see who are not good enough, we are not pretty enough. We are not smart enough and we need people and businesses to actually listen to our challenges and come up with solution. And that's how you find a lot of small businesses that actually provides services. That so this kind of challenge, which is when I have a challenge with myself, right? A second kind of channels we start to have is we start to have this agreement and challenges our people with other people. And that's where we need someone to come up with a solution and actually dissolve this kind of problem so everything can go back to natural, right? And that verified a lot of small businesses also provide services in order to dissolve solution our route to people or to other parties, right? We also start to have a problem with the community, and we start to have a problem with the society and the environment. And we need someone to actually accept us and welcome us. And that's where you see also some small businesses that actually create product as a resist that art design and tailor toward a small group of people. Okay? The first kind of charges we start to have, you start to have challenges with tools, right? We find that current tools are not good enough to satisfy our physical and mental needs. And that's where we need people or businesses to actually help us with this kind of things. And that's where you find small businesses such as diabetic shoes. Shoes that they come up with a solution to serve all the specific group of people with this specific wants and needs. Now, it's very important for you to understand that a small business needs of a problem. Otherwise, this business is not going to be profitable in the long term as a small business, okay? And I will tell you why living right now, understand that you must look for a problem in the marketplace, okay, That's critical. Now, the next thing is that you have to understand is that you have to understand that are you actually making business in a less-developed economy or anymore default economy? And the rest of the economy. Businesses are normally, are made by basic stock, for example, basic food, basic shorter, and so on and so forth we talk about. And you actually cannot make a lot of money in this economy unless you sell that kind of stuff. Because people only by this kind of stop, right? And you cannot charge a high price. Therefore, you need to be very strategic when it comes to this kind of businesses. On the other hand, if you are in a more stable economy, then you can be as sophisticated as you want because you know that there is a group of customer. Who is well-educated and had the time to actually listen to her values and listen to a goal and actually support your cause. And they actually can't afford to buy this product for the simple reason that they have something called credit, which you don't find in this default economy. Therefore, you can't go as far as you want in a more advanced economy. Now, the first question you have to understand and to ask yourself, am I living in a less-developed economy, that economy on basic needs and I should sell basic needs product at low cost? Or am I living in a more advanced economy? And people actually don't care about them anymore and they want more sophisticated product that critical. And the next thing that you have to understand also RA to understand what is the person in power of my customer and what are the things that they spent money on? I need to understand what they are buying. That critical, okay? Now, once you understand that, you have to understand the next sake, which is what are the limitation for you as a small business? Well, it's more than that as we talked previously, runs only small and tight budget. It cannot spread, it margins or its profit way to say, it cannot serve everyone. And that's why it's more than they should focus on small group of people. Now let me show you one of the biggest mistakes you see I just Malmo is the small, many small entrepreneurs. They believe that they need to serve everyone in order to make the most profit. However, that's not true. You cannot serve all these cool people. Each one of these people had different wants, needs, and desires. And unless you are a large corporate, you cannot do that, okay? Therefore, as a small business, you focus on small group of people wants, needs and desire, and deserve them whatever they want. And then you make the most profit from this small group of people. And we call that concept is niches down your silver or the Xing Dong, your product. So what is niches? Where Michigan is when you find large group of people, then you divide them. You divide them into small groups. And then you pick one group of customer and you serves it was different product and service it and you make the most profit from this group of customer. So if we put it in simpler way, we narrow down our customers paid, and we wire up our product lines. So there are so many ways to niche down your product or service. The first way is you need to up by function. So say for example, that you pick a category which is bakery products, and then you choose a bread, and then you go with gluten-free bread. That is your niche, and then you widen up your product line. You go with gluten-free products such as bread, cookies, biscuits, chocolates, and so on and so forth. Now, you can also knees down by styles there, for example, that you go with appeal, then you go with T-Shirt, then you go with cartoon t-shirt, and then you go with cotton T-shirts for adults as your niche, then you widen up your product line. You go with cotton appear for adults, such as t-shirt, shirt, pants, hats, and so on and so forth. Okay? Now, once you understand that you also can knees down your product by industry. For example, you can go with digital marketing, social media marketing. It goes social media for small businesses. Then you go with Instagram marketing for small businesses and you actually can't find a better niche if you go with Instagram marketing for small fashion startup, you can't build the portfolio around that is much easier than going with social media marketing as general, right? And then once you have that customers base, now you can server with different products and services. And you can actually be responsible for all of your social media account and only for small fashion startup, OK. Now, to find your niche, if it is a product, you can actually go to Amazon. Amazon and you just look for the shot by department and then just click See All. And then you can't find a different major category. We are going to shoot for now, beauty and hills. And you can find a lot of subcategories inside this categories. And these categories are not your niche on all the major categories as well. And it's not a good idea to compete there. Inside that, you will find a lot of product line. These are not niches, these are products that you can develop later on in your leisure. Now to find your niche, you go back to Google and you type in skin care for. And then you'll find a lot of niches that actually Google will provide you. For oily skin, skin care for acne, skin, skin care for black woman, skin care for sensitive skin, and so on and so forth. Now this is your niche and product that you find on Amazon and these other products that you can develop inside these niche. Make sure that you start with one or two product to try your niche, then you can devolve it into more product lines, okay? Now if you add a service, you can just go back to Google and just try social media marketing for, and then try different alphabets. And then you're fine for a, for B, for C, and you will find different industries that you can niche down your service. Now the last thing that you have to understand is what does the market offer to your customer? And you have to acknowledge that in the marketplace you might have a competition and you will, at this competition is going to be, in some scenario, very heavy. Therefore, you also have to understand that you might have more than one competition. At all of this competition is trying to compete on a tritone your customer attention. You also have to understand that the customer has the power to choose which competition to work with and to give attention to. And you have to understand that this customer might get bored easily at that, a challenging mission for you as a small business. You also have to understand that your competition might be working as hard as you are to attract your customer money, right? And the customer will only pay for the money for the business that actually benefit them the most. Now, you don't have to worry about that a lot, but you have to consider it right? Because most of your competitors actually don't keep an extra attention to your customers specific situation and wants. And you have to understand that there are so many customer cannot work with a generic product and they need a product that actually fit their wants and needs. And you also have to understand that there are so many small businesses. They don't keep an extra attention to the customer experience and making the customer happy and making the customer wanting to come back and spend more time Our business. You also have to understand that not so many businesses are very good at customer experience and making the customer wanting to come back and purchase more because the great customer experience. And that's how he discovered that there are so many unhappy customer with currents tuition. And your job as an entrepreneur is to find what the problem right now in the marketplace in terms of the customer frustration and the competition. And to do that, you go to the Internet. And first, I'm going to search for a specific problem around specific situation, right? For, so for example, I'm going to search inside, trade it for a frustration about diet, right? And then I want to look inside rate for article that people actually normal people like you and me, Talking about their frustration around this situation, right? I don't want to go for a article. I just want to go for conversation because I want to hear and see real people took him about a problem. Once I do that, now I want to add to that I will have an idea, a generic idea, general idea about the problem, and then I can devolve into a hypothesis, right? The next thing I want to do is I want to go to a website called Answer the Public. And I want to write a specific key word about my problem. For example, let's say acne scheme. Right now, this tool will actually grew up a lot of data and information from many forums or Google around the specific problem. And it's actually going to give me a lot of question and keywords that people are searching around this problem. Now this is golden for me as a small business entrepreneur. Because right now I can understand what the Internet is talking about a specific problem. And I can understand how my customers are thinking and what are they looking for when it comes to Acme scheme, okay? Now, if I want to understand my market now and I are semi competition, I will go to Amazon and I will look for the product that are designed or this group of customer. And I want to scroll down and I want to see as many products as I can be as it could be. And I want to click on one of these products and I want to actually go and read the customer's review. I want to see what's going on with this product. How does the, how does the brand present this product? But that's not the most important thing. What's matters most if I scroll down and scroll down, I want to go until I find customers reviews and customers view or the most important thing, right? So I want to see what's good and what's bad with the product. Not caring about is it's four-star, it's five-star. What I'm talking about it, how's the customer feel about the product and what are the problem with a product? Okay, so once you understand that, now let's look at the most important thing, which is, let me show you some examples of businesses that actually niche down the offer and create essential for business. The first example we will look at is quest nutrition. It's a business that is designed to create healthy food and fast food looks alike. Food that actually serve people who care about their health and lifestyle and their diet. They took care of all the bad ingredient and they replace them with healthy nutrition. The second business we will look at, which is lifts, where this is a spoon that this business design in order to serve people who have difficulties and have some kind of disability when it's come to eating food. So they not only design a generic spoon, but a spoon that actually serve and solve this kind of specific problem, which is genius. The third thing I want to show, which is a small business yoga class. This class only focus on the people or the women that are pregnant, pregnant. And this will the problem. And they design a specific lifestyle around this kind of ladies, which is also a genius as well. They don't offer yoga to everyone only for women who are pregnant. Once you understand that, now you have to understand that purpose of this course. For the purpose of this video, the purpose of seats we do is first in nice and narrow down your customer base. And once you do that, now you need to understand that your nice need to meet a customer challenge. The challenge could be the customer channels themselves with other people, with a society or the tool. And once your niche habit met a challenge. Now, your niche need also to take into consideration the customer limitation. This limitation could be money, is to include mutation, could be tied, or it could be a physical or a mental limitation. Now, if you do that successfully, then you will find a product market match, and then you will have the right customer for the right product. If you don't do that, then you are probably not going to be profitable because you are not going to find a customer who actually pay you a profitable price, premium price for your offer and you are probably going to lose in business. It is that simple. No less, no more. It doesn't matter how smart you are. You need to find a product market fit, okay, so that's going to be for today's video. Please go through the assignment and I will see you in the next video. Bye-bye. 4. How To Develop An Affordable Solution: Welcome back. In this video, we are going to talk about the second when it comes to building your small business, which is three I think, and affordable solution. Now, to understand the cost of building an affordable solution, we need to understand the three types of shock when the first type of shoppers, it's a shepherd's pie, the things at the lowest cost or the lowest price possible. And this kind of customer care about big discount and big deal. They want to get the best bargain. Now, this customer also care about the quantity of thing rather than the quality of thing. And it's very, very understandable reason, which is probably they cannot afford expensive stuff and they probably have too feed the family at a limited budget, which is understandable. However, you need to understand as a small business owner, that a lot of brands spent billions of dollars right, into creating the most efficient infrastructure to satisfy these kind of customers and compete on low margin. For us more business, you cannot actually build such a mega infrastructure. It's not possible. It's not feasible for your small business. If you are one person or a small team that creates product, getting into such kind of business is not profitable at all. It's actually will lose money because such businesses actually compete only very, very small and tiny margin and it's not possible for us to become prompt. Now, the second curve, customer, which is the customer who care about luxurious, luxurious product and they don't care about the principal product, okay? They care about the specific kind of image. They care about specific kind of lifestyle. And they want to buy the most expensive and the most experienced things because it makes them look luxurious and it's actually read them when it comes to social hierarchy, right? So for us move is this owner, it's not going to be easy or possible probably to build that kind of image. You cannot. And you don't have the resources to build such luxury store. You don't have the money and relationship to build amazing advertising and advertise on TV. That not possible and not within your, but now you don't experience that. You actually take a couple of photos and you call your step a cool bread. And then you expect people to buy from you as you next year spread. People buy from brands such as Ferrari, Lamborghini, Versace, Gucci, because these flat existed for a long time and the spread, understand how to play it with people desire. And the spread invested billions of dollars in creating that image. So people will buy that lecturers image, right? The third kind of customer, which is the perfect customer for us more business, which we call a premium customer value already customers. These customers, they don't care about big brands name and they want the value of thing. All right? And this kind of customer, actually the best customer to market your product for and to reach and asked them to buy your product. Now, the way that you can sell this customer is you can sell directly to them. And which we call direct to consumer, is when you sell on your own website or in your own retail store, right? And you make all the profits for yourself, rather than actually go into retail store at, you can actually advertise to your customer is directly on the Internet, which we call Facebook advertising, or Instagram advertising. This strategy will actually save you a lot of money and it will actually keep a lot of money in your pocket because go into retail probably would take 50 percent out of your margin. And when you talk about that later. Now, let me show you some example. This is Amazon shirts and you can see that it's priced at ¢18.9. Write it in dollar sales. Now, most mobile tried to compete on these kind of quality and which is a mistake. If you look at the quality of this shirt is actually an average shirt and you should not compete on this. And you should by now understand that this company had to compete with a lot of the same kind of large businesses on a low margins, right? And that's not possible for us more business. Now, on the other hand, you get the Georgia or managers, right? And these are price adds 500 to 600, 700 Euros. And Georgia and many had a lot of time, money and skill into creating such luxurious. Sure, however IT people, but only by the shore because the quality, but because it also gives them a different kind of social image and it makes him look expensive and rich, right? And people buy it because it's Giorgio Armani, right? It's not just because it's shirt for us, because it's good for the shirt. Now, you get the value oriented and premium brand, which meets a customer in the middle. So they offer shirt at a $115. Now this is, it creates quality shirt and it's well-made and that trap nodes. This shirt is actually amazing. Brands sell direct to consumer, which they sell on their website. And they can make sure that they actually produce a high-quality product. And they actually cut the cost of marketing and retail and actually distribute the product to the customer at a lower cost. Now let me show you another example. This is a blue brand which is called, which is specialized in selling microphone to creators, right? So they are nice is to sell microphone to create a sort of podcasters, YouTubers, music makers and so on and so forth. And they actually, you can see they can afford the product at an affordable price because they felt articles tumor. Another brand is coelom mattresses. And you can see from the images, you can see that the customer or this brand. Our sophisticated yet value oriented customer, and they care about converts right, and lifestyle rather than it looks curious or expected stop. And they actually don't care about the cheap stuff because they want a good quote, Stop. Another example is bombast thoughts. As you can see, the price of the stock is not that cheap, is not the cheapest stocks, right? But it's designed specifically toward people who care about quality stops, but they don't want to pay for expensive marketing. This is also supply blades. And you can see that the design of the supply is really nice, specifically physical design and a sophisticated at it designed specifically to meet specific people want and need and they care about good shape was beautiful design. The second is that you want to look for is how much the customer is willing to pay. You cannot come up with a price out of thin air and then expect the customer to take the price. That's not possible, okay? There is a market price for everything at the customer expected to pay a specific point or a specific price for a specific product. Now, to do that, you have to go to Google and you have to do a market research around what is the customer is willing to pay for this kind of product. And then you will find a lot of information about what is the current price point for a specific product category. Now, you can pick from a lot of sources. I'm going to pick one source, retina. And we are going to look at different brands and how they actually can offer and price their product. And what price point do they offer their product, right? So if we pick any one of these offers, now, we want to look at different point when it comes to price comparison. The first thing we look for is actually the price range. So what are the price range of this specific product, right? As you can see that it's around 600 to one hundred, five hundred dollar, that what the market is willing to pay. You also want to look for the trial period. What's the author of this price, right? What is a warranty? What are the shipping option of these things, right? Because that's an offer that's not only a product. The second thing that you want to look at, the features and the benefits of each product. And you want to see how much the customer is willing to pay for a specific features and specific benefit. Critical saint to you because you don't want to sell one thing at a low price point. And then you discover that your competition actually sale something much better at a lower price point, that's a disaster, okay? The customer or what would compare, will always compare right? Now. Once you understand that, you have to understand how should you price your product. And normally, we have to price our product at three times to five times cost of making your product. And for this, this is for a simple reason. Okay? So let's say that for example, you discovered that the retail price of your product is should be 45 dollars. Therefore, your manufacturing costs need to be around $15. It cannot be higher, right? So once you do that, you have to understand why you want to do that. Well, the first thing you have to understand that that's $15 is only the cost of making your product. Now you will have the overhead expenses of actually running urbanism. And if you actually divide that cost by the number of units, you will read, for example, to a $21, fair one unit. That's total cost, right? And if you actually want to sell your product at a wholesale price, you have to sell it at a 50 percent discount off your retail price, which is $22.5. Now, if you look at your numbers, you will see that you only make $1.5 in profit per one unit, and that's not a lot of profit. Now, if you want to sell direct to consumer, then you will have marketing costs. And the cost of acquiring a customer might be around, for example, sometimes $15 and that $15 if you add it to your overhead expenses and your cost of making product that probably could go to surgery 737 door or sometimes more. Therefore, you have to see that in order to become profits, what you need to have the right pricing model in order to make truck, okay? What do you learn from this video? We learn from this video that there are three kind of Shepherd, which is the low budget shopper. And then we have at the other end of the spectrum is the luxurious customer. And then in the middle, we have the value oriented but premium customer. Now, for us more business, you can pick whatever you want. It's up to you actually, but you should only pick one and it should not work with a three because each one of these have special wants, needs. And they actually have special person in power and they have their own wants and they don't want to buy from shift up if they are carrying about the serious stuff and if they are carrying about ship stuff, they cannot afford expensive stock. Therefore, to not overwhelm or frustrate your customers, be clear, not the best thing is just to choose the customers that makes sense the most your business, which is value oriented but premium customer, right? Then you need to look at the marketplace and you want to see what is the market price for your product category. And you want to see how much the customer is willing to pay. That's it's going to be for this video. I wanted to go through your assignment and slow down and do the work. And remember to have some fun, okay? It's doing it just having some fun and making some money. I will see you in the next video. Take care for now. And this is nor Bye-bye. 5. Bonus1: How To Calculate Your Product and Business Costs: Welcome back. In this video, I will walk us through some accounting basics. I understand that mass might be frightening for some people, but please don't fear and do your best to stick with me till the end of this video. I promised to make it as simple as possible. If you are an entrepreneur, you must know your numbers. Otherwise you will be out of the business pretty tasks. The first concept we will be talking about is the cost of creating your product. And it's called cost of goods. How much does it cost you to produce one unit? Let's go back, go our burger example and calculate the costs that are involved directly and making one burger. First, we have to calculate the cost of the raw materials. Your suppliers do usually provide you with the information of your wholesale price. Then it's only a matter of dividing the cost into small pieces. Keep in mind that in some products such as Berger, this cost is as close as possible to the average cost. Since each slice of tomato might differ in weight and size. And you don't have to do the math for every separate burger. You only do it once and that's it. This cost changes when your supplier inform you about significant changes in prices. Once you add up all the materials cost together, you should come up with a total materials cost per unit for your product. Take a note of this number and remember it carefully. The second cost that we need to calculate and add to your materials cost is the direct labor cost that is involved in creating this product. Say for example, that you hire one step for $6 an hour, takes him three minutes to make one burger from start to finish. Therefore, it takes him one hour to make 20 workers, 60 minutes divided by 3 brokers equal to 20 burgers. To calculate labor cost of making one burger is only a matter of simple algebra. For 60 minutes. It costs $6 for three minutes, it cost X amount. Now, it's only a matter of simple cross multiplication. X equal to 6 multiplied by 3 divided by 60, which equals to 18 divided by 60, which equal to $0.30 per burger. Feel free to use the same formula and change it with your numbers to find the total cost of goods, simply add materials cost to the direct labor cost. And you should come up with a total cost of goods, which equals to $1.40 per burger. What does this number tells you? It says that you should never sell your product at a price lower than $1.40 per burger unless you are planning on losing money. It also tells you if your cost of goods is higher or lower than the industry average. Now, let's assume that we are going to sell this burger for $2. Which brings us to the next concept, which is called profit margin. Profit margin is how much money do you make on selling one burger? Profit margin equals to your price minus your cost of goods. In this case, profit model equals to $2 minus $1.40, which equals to 60 cents. And that's equal to Profit margin of 30 percent. In this scenario, 30 percent is pretty awesome. Normally your profit margin in this industry is around 69%. But for the sake of making this example easy to understand, we are going to stick with just number. Profit model is equal to price minus your cost of goods. This is one of the most important formula that you need to keep in your mind. You only have to do it once, but It's critical for your business success. Here's a list of some other costs that you need to consider. Why calculating your cost of goods. And it varies depending on your industry. Materials costs, direct labor costs, shipping fees. If you provide free shipping, online stores and credit card transaction fees such as PayPal, Amazon, and credit cards, insurance fees, your state tax or European VAT tax and product maintain warranty fees. If your cost of goods is much higher compared to your competition, it means that you need to go back and renegotiate your suppliers. Do you find different supplier or change some of your component of your product? Otherwise, consider adding more value to your product so you can offer it at a higher price. The second accounting concept that we need to talk about this gross profit, unlike the profit margin, is where you calculate the profit margin. Selling one unit of product. Gross profit is the profit that you make on your total sales. Say that you sell 50 burgers a day. We sell for $2 for each burger, and it costs you $1.40 per burger. Therefore, we sell $100 worth of money with a total cost curves to $70, and we end up with 30 percent in gross profit. Gross profit comes in handy when we had to calculate. The total profit for a specific period, or estimate the total profit of different products with different costs. In this example, we can't generate better gross profit by upselling you're offering and introducing less costly product at a higher price point. As we have seen in the last example, that the profit margin of sending one burger is 30 percent. But what if we combine it with a Coke which costs 20 cents and we can sell it for $1. The profit margin when a single cup of Coke is 80 percent, which is excellent. If you bundle both products together, then you will end up with a total cost of $1.60 and the full retail price of $3, which equals to 46% in correspondence. That is 16 percent higher than all the selling a burger. Now you should be able to reason was they tried to upsell you when you make an order at Manto mode. This is because the money is in the drinks. They make a very low profit margin on the burger. Now that we have calculated all the costs of making your product, must people stop here and yet still end up with a loss? Why? Because you still haven't calculated your fixed costs. Think of your fixed cost as the underlying expenses that you need to make payment for your business to be able to operate and function. The first fixed costs that you need to think about is rent. Even if you are going to perform from home, you still need to consider renting one of your house room as a fixed cost when you are looking for a lease, you might be looking for how much should you pay per month. Although this is critical, there is something more important to consider. If you plan to approach as a distribution for your product and services, you should always be thinking concerning the trade-off between space versus traffic. If your product require high food tropic for sales to happen, they're looking for an abandoned place to rent for the sake of being cheap, will drive you out of the business. I see this problem happens all the time when the business owner tries to save money or rent and find a place, very little traffic. And I asked him, what is the point of owning a store was low traffic and bad environment in the first place. On the other hand, if you need a large space for a functional reason, and you feel that you can't do your marketing on social media or hire a separate sales reps. They're fighting a place on the last floor of a shopping mall will make sense. Since you will value space over traffic and people once they arrive at the chain, will require more quiet and focused environment. Another problems that I see with many stores is a problem with space efficiency. When you rent a space, you should make sure that you are using the space to get the best return on your investment. Avoid Western your space with a lot of declarative and nonfunctional areas? Yes. You still want to have a peaceful place, was a fantastic environment. But it's not an art gallery, it's a business. And you should measure your space efficiency on the return per square meter or square foot. In this scenario, you can see the Starbucks makes an excellent use of space. If you find that trending store might be expensive, you might consider operating from a truck or pop shop. On this occasion, your timing and location are flexible. You will also end up with much lower overhead costs comparing to a retail store. And last but not least, if you still find that all of the above to be unnecessary or unable to afford, you can always start an online store at your fixed cost would be your monthly subscription. In this case, it will be $39 and 99 cents a month. Keep in mind that each type of products require a different kind of audience. Make sure to find the platform that fits your products. Now that you calculated your rain. Others things that you need to be aware of as fixed costs are your utility bills and your employee salaries, those are the salaries of your most critical employees. For example, your accountant or your waitress. Without them, your business won't be able to operate. Here's a list of the ticks Gazi at you need to think about, and they vary depending on your industry. This list include rent, salaries, utilities, insurance, property taxes, machinery costs, and maintenance expenses. Okay, so now that you have an idea about your cost of goods and fixed costs, start to have look at your marketing expenses. Many small businesses intrapreneurs dismiss or underestimate marketing costs. But if you want to sell products, then you have to do marketing. And it usually cost you a certain amount of money. Let's look at an example of how to look at your marketing expenses. Let's assume that you launch a Facebook campaign. It runs for three days. It costs you a $100. You will reach 100 people, 100 absorbs people, will click on your ads and list assumes that you have create products with a high conversion rate of 10 percent, which means that 10 people will buy your product. By the way, this is a very high conversion rate. But for now, let's keep the numbers simple. Which means that it's going to cost you $10 and marketing expensive to acquire one customer. Sounds cool, right? Not yet. Let's look at the other side of the equation. Let's look at your product. It's going to cost you $5 to make one unit and you decide to sell it for $10. Since we sold 10 units, your total sales should be $100, right? You should be happy to break even. But wait, not too fast. Let's find our gross profit, which equals to $100 revenue minus $50 in production costs, which equals to $50. Let's substract your gross profits from your marketing costs, which equals to $50 minus $100, and which equals to negative $50. Wait, what just happened? Oh, you just lost $50. Imagine if we haven't managed to control our budget, we got too excited and we spent once I had done on Facebook ads without doing any customers or market research, we will end up with a negative 500 dollar as a loss in this scenario. To at least break-even, you should work on creating a fantastic marketing plan was a conversion rate of 15 percent or raise your price point to $15, or maybe bring your cost to $0, which is impossible unless you are selling, it is still product. When you calculate your marketing costs, you should always keep your profit margin and the number of you require sales to break even at a framework to calculate your return on investment. Now that you have all the numbers in mind, it's time to find your profit. Profit equals to total revenue minus total cost. And that's including cost of goods, fixed cost, and marketing expenses. You should always keep track of those numbers, otherwise, you will end up with negative cashflow, high depth, and bankruptcy company. All of those costs will bring you to the net profit bottom line, which is your total sales minus your total costs plus taxes. If your revenue exceeds your cost, then you will end up with a positive net profit. If your income is less than your expenses, then you will end up negative and loss must start ups. A negative income for the first two or three years. And some takes up to five years to break even. This is why I told you at the beginning of this course, try to keep a stable income source at the moment. Okay, so let's combine all those concepts into one small example. Let's calculate a required amount of investment for a simple Berger truck. Let's assume that you buy a cooking equipment for $2 thousand and it's only one time payment, period, a food truck for $2400 a year. And it's going to cost you 3, $7 a year to maintain. You decide to hire one step for $5 an hour and you will work eight hours a day, which equals to $1200 a month and 14400 dollars a year. Your total fixed cost would be $21,800 for the first year and 19804 second year, assuming that you will continue using the same equipment. Let's find your break-even for your first year in business, your total fixed cost is 21,800. Let's look at cost of goods. $1.40 per burger, your price would be $2 per burger. Your profit margin would be $0.60 per burger. Your break-even point is $2900 a year, divided by 60 cents, which equals to 36,324 burgers per year. Set equals to 37 and 27 burgers and 101 burgers per day, which equals to 12 burgers and hour. If you operate for eight hours a day, who sets lot, you should be very good at selling burgers. Your burgers should be awesome. Keep in mind that I'm assuming that you have already found great cation and you do not need any extra marketing effort. So what can you do to reach faster to your break-even and make more profit? Well, first, you can find location where customer calf toward higher prices. Second, you can rent a cheaper to truck to reduce your overhead costs. Or you can work on your product costs and find a way to bring it down. And you can improve your gross profit by up-selling and cross-selling different products. Okay, so now you have it. After all, it's not that complicated. Do it for once, then visited every three months or half a year, at least you have a clear idea about your numbers and you will know that you are operating in the green zone of your business. So let's summarize. You should always calculate your cost of goods, your fixed costs, and you break even numbers. Your profit margin equals to price minus your cost of goods. Your profit equals to total revenue minus total cost. You should always be looking for ways to increase your gross profit with up-selling and cross-selling, always work on reducing your tastes and overhead expenses. Avoid competing with low prices, especially when you're starting out. Do not underestimate your marketing budget. So for your assignment for this week, you need to create a cost breakdown. Pick one of your product, or research any products that you are interested in, list and calculate the cost of goods, materials, direct labor, shipping, transaction fees, and so on. This I calculate overhead costs, website rents, salaries, including yourself and your space. How much is it going to cost you to be in business for one year? How many units should you sell per month to break even? How much should you spend on molecules to reach your sales? It might be from 30 to 50 percent of your profit margin. Please take this seriously. Do a slowly, you don't have to rush, it has some risks. There are a lot of tools that will come next article. Use them for your benefit. If you have any question, please leave it in the Q&A section. I will see you in the next video. 6. How To Market Your Solution To A Customer: Well, hello there and welcome to the third steps of how you can establish your small business, which is establishing a marketing channel or put in Civil War how you can market your product to your customer. Now, this topic of marketing actually frustrate a lot of starting intrapreneurs have business owner, they think it's complicated and it is, I can understand that. However, in this video we are going to simplify things. And in order to do that, we have to look at the essence of marketing for small business and what is the reason behind marketing? Well, the reason is pretty simple. You need to attract attention. Without attracting attention, you cannot make the customer aware of your product. And you also cannot promote your products to the customer and you cannot make a sale. Now, in this video, we are not going to speak about all the small details when it comes to marketing risk for business. And we are only going to look at the bigger picture. However, I promise you, before you finish this course, at, at the end of this course, you will find a detailed video from my marketing course on how you can actually market your small business with all the strategies and tactics. So don't worry about it. Just focus with me right now, I got your back. The most important thing to understand for route is to understand what is a marketing channel? What a marketing channel just a place that the business can establish a communication with that customer. And without this communication channel or marketing channel, the brand cannot promote its product to a customer. Now, there are communication channel that your business actually partially owned and they don't have to pay money to actually promote the product. Say for example, that your Instagram feeds or YouTube page, you actually, you don't have to pay to post on these pages, right? You can do that for free. And now you have communication channels that where you have to pay in order to display your products, such as a billboard right? Now, there are different ways of how you can market your product on the channel. There is the organic way is when you take pictures of your videos or videos of your product, and then you actually just post them on your social media feed or on YouTube page. The other way is when you use this channel to advertise for your product, Say for example, Facebook advertising on Instagram advertising or Google PPC, pay-per-click. Now, there's also another way of how you can use this channel is when you collaborate with other people, where they have their own audience, right? And now they drive their audience to your business and to buy your product, okay? And that's called partnership marketing. Another way of how you can leverage this marketing channel is where you have, for example, to participate in trade shows and events in order to promote your product to a specific group of customers. Say for example, that you sell B2B to businesses, right? You need three shows in order to attract this kind of customer. The most important thing to understand is what is marketing channel? But actually what marketing channels actually worked for my business. And that's comes when you understand that you have always to advertise or promote your product where the customer exist. If they are on Instagram, you advertise or too much on Instagram or on YouTube, you go to you to correct. Now, in order to market your product successfully, you need to reverse engineer the mindset of the customer when they want to make a buying decision. Let me give you a small example. Let's say, for example, that you have a small business, that you sell coffee bean as a wholesaler, right? And not you want to attract your customer. Now, who is your customer? Will probably correct customer would be a coffee shop is more coffee shop. Who want to buy coffee bean fresh copy, right? So how can you actually market your product to the customer? Well, the first thing that you have to understand that if this small coffee shop want to look for coffee beans, the first thing they will do, they will go to the Internet and they will search, for example, where to buy coffee beans for coffee shop in, for example, California, right? Your area. Now, Google will give them a lot of these old and thus off result of this search. It's actually page is all PPC, right? Therefore, probably you need to participate or pay for this kind of advertising in order to show your business right? That the first strategy you can follow. Now, once people actually click on this ad, you probably need to invest a little bit any website that has a wholesale page where you actually can direct your cause, your customer to this specific page where you display your product. And you display probably a little bit about your business and their context for where doubleness, where the customer can actually contact your business. Now, what else does this business do? They work, they probably will actually check one of your social media page and they want to see if your business is actually legit. And they want to see behind the scene around your business. And they want to also see what kind of product we have and what kind of customer reviews you probably might have on your social media page. So these are the three things that you need to consider when you have, for example, a wholesale business right? Now, what else do we have? Well, let's say, for example, that these people will also go to Google and search for coffee bean wholesaler. Near me. Now they will get resolved, for example, on Google. Local businesses. And therefore you have to understand that your business also need to be listed with these businesses with reviews at your business information. And you can't do that if you list your business on Google, My Business, if you only have to follow the instruction and you only need to register three in your information and it's all for free. And now you will witness is listed on Google right? Now when people search for coffee bean suppliers near me, your business will actually appear. And once they are happy with your surface, they can leave a review which is social proof around your business. What else can you do? Well, your customer also buy from other supplier. And the supplier actually don't sell the same product for the same product category as yours. And they are not competitors, but they sell to the same customer. Now, you can actually cooperate with the supplier and you can't give them an affiliate fee or commission feet, right? And whenever they want to sell their product, they can't recommend your product. And if they make a sale, they can take a commission. Okay? So these are three major strategy. If you have a sale with wholesale business, now, let's say, for example, that you want to sell to a lot to consumers. You want to cell B to C, right? So how do you do your marketing? Well, one of the passive strategy is to find someone who has a lot of customers, a lot of audience, and then you want to cooperate with C's audience. We call this is influencer marketing. When you find few or a lot of influencers, micro influencer was 10000 to 30000 followers. And you actually quantitate this influencer and you ask them for a corporation, right? So we'll call that partnership marketing. And you can do that if you go to the Internet and search for influencers platform and you will find a lot of platform. Now, all this transaction happened on this platform, and that's how we make sure that everything is transparent and you can get whatever that you pay for. So as this influencer will get a small fee and some of these influencer will accept just a free gift as a product, okay? The second way that you can go is that you can go to Facebook and you can start to advertise your product on Facebook. And that's how you can attract customers to your, for example, website and you can make a sale. One of the most important thing I want you to understand when it comes to marketing products that I really want you to look for the cheapest way of marketing product, but that doesn't mean that it's only organic. Sometime you probably need to invest into buying a product. But I also need you to take your presentation of your marketing, right? I wanted to make some effort into marketing your product. If you cannot do that, you probably can hire someone who is good on camera or in good and marketing as you can help them, as the M to help you doing the marketing for your business. The second thing that I want you to do is you actually, I wanted to actually find one social media channel and actually invest is that social media channel. So for example, if you want to sell a product and it required a lot of visual ideas, then you can invest a little bit into your product photography and videography. Video, and you can post it on Instagram. This will make your brand look legit, okay? Don't expect to make sales from this account. You just want to make your brand look legit. The third thing I wanted to do is I want you to invest is a bit into paid marketing and paid marketing, I want you to do it at the closest point of sale. So if you are selling on Amazon, I want you to mark it on Amazon because this is where the customer is ready to buy. I do want you to go to Facebook, then grab a customer from Facebook brings into Amazon, and they are not in buying mode. You can do that layer when you want to scale your business, but when you are running on a limited budget, I want you to leverage the platform, okay? If you are, if you have a surface of you have a restaurant or if you have a local business, you can use the platform that are actually use to list just kind of businesses such as Yelp or TripAdvisor. Okay. Now, one thing I want you to understand that I wanted to consider your budget and I want you to understand that you cannot blow off your money just on marketing. You only need to consider a small amount of budget for marketing. Say for example, at starting point of your business, you probably is going to spend around 25 percent of your budget. And later on you'll probably just going to spin around 30 percent. And when you scale your business, probably you would cut it down to 20 percent when you have more customer and more acute, more procuring revenue, okay? Now, there are so many marketing channels that you can leverage as small business, and it's really depends on the type of your business. You can go with blogging, with podcasts, influencer, online distinct social media advertising, trade shows, event, or you advertise inside the online marketplace. What really matters the most if you have to understand that where the customer exist is where I market my product. If you sell B2B, probably trace shows and events. If you sell direct to consumer, probably influencers and social media advertising. Okay. If you said inside Marketplace, probably you and advertise inside that marketplace. When you start your small business, I want you to try two or three message of how you can advertise sure, all market your products. So probably you can start with blocking. You can make a block and you can work with other podcasts. You can advertise on other people's podcasts, and probably you can do some kind of social media branding and advertising. All right, So the second thing that I want to look for is what is the cost of acquiring a customer? And we talked previously that there are two major ways of marketing your product to a customer. There is a organic way, is when you post content on your social media page and you actually build awareness around your bread and you educate your customer about your product. And these things takes a lot of time. Therefore, you cannot measure the return on debt kind of mockery. Now, the second way of marketing we call direct marketing, which means we advertise for our product and keeps the customer a direct offer. And then we need to measure how much it cost us to market a product. How much does it cost us to acquire a customer? And how much does the customer spent with our brand? And you will have all the align tools to actually provide you with this number. So it's not difficult, but you need to measure that. And let me give you an example. Let's say for example, that you spend a $100 on Facebook and you get ten solid depression, which means 10000 views. And then from distance out and you only get 10 percent to visit your website, we should pretty practical and from this, once our views you only get 10 sales. What is the cost of making a sale? Well, it's 10 dollar. Now, as a small business, is this profitable? I don't know. It depends on your retail price. We talked previously about that and it depend on the cost of your product. Know what kind of other strategy 2 I have as a small business. Well, I can try, for example, to work with one micro influencers, right? And I could pay them $50. And this micro influencers now helped me to make ten sales, right? They have, for example, 20000 followers and they make the sale, right? So what is the cost of making a sale? Influencer on average, it's $5. Now, which message is more profitable for me as a small business on the limited budget? Probably if I go with the second strategy, right, probably I would have less customer, but probably I would have more certain sales. And I can scale this model to work with multiple or 10 influencers at a time for $500. And I can put, for example, generate more sales. And West, I make those tail and I kick-start my project. Then I have the money now to hire someone to do me an efficient and effective Facebook advertising and to scale my Facebook budgets so it can get the cost of acquisition lower than 10 dollar, right? And then I can scale my. So what do we learn from this video? Well, the first thing that we learned is we first need to reverse engineer our customer mindset and how they buy a product. The second thing that we learned is that we need to attract the customer attention and we need to market where they exist by posting videos, images, and sometimes advertising or listing a product. Now once we do that, we have to know that we have many ways to do that. We have three, we have paid and partnerships. So you don't have to do rely on only one method. Probably you rely on freeway to build your brand and paid or partnership way to make a sale. Okay? Once you do that, now you have to understand that you need to find the most efficient and effective marketing channel and the cost effective channel to buy the cheapest attention, right? You don't want to pay a lot for your attention and it does not bring you any customer, right? Once you do that, you are actually golden. Now, you take that marketing channel and you actually tried to work with that marketing channel at the schedules a bit until you bring a specific amount of customer and you are profitable. Once you do that now you can leverage other marketing channels to scale your business bigger. Okay? Now let's take it easy. Capstone death and relax. I know marketing can be complicated, but I promise you, as I told you at the end of this course, you will have a detailed videos and it will make things more simpler. Okay, Just take it easy. Have fun. Do the assignment, and I will see you in the next week. Take care, Bye bye. 7. How To Sell Your Product To A Customer: Welcome to the first section in this intrepreneurship simplifies crash course. In this section we are going to talk about distribution channel. Now that you have marketed to your product, to your customer and you made the customer aware of your product. You need to send the customer to a place where they can check their product and they can actually buy it. And that's what we call a distribution Chung. All right, so what kind of distribution channels do we have as small business? Well, we have an offline distribution channel, which might be your retail store, brick and mortar store, truck, or a pop shop, where the customer can go and check a physical store and they can make a purchase, right? The other kind of distribution channel, which we call an online distribution channel, which might be your own website, or it could be your Amazon store. Now, obviously, the cost of starting a business online is less than the cost of starting a business or flight, right? In mostly diarrhea can start with $1 or $29. However, if you want to go with retail strategy, that could probably cost you ten of solid, if not hundreds of thousands, to start a business which is a lot of money for a new concept or a new business, okay? Now, there are two kind of distribution channel as marketing as well. So there are distribution channels that you own. Sale direct to consumer. And we can, you control the entire customer experience and the customer can become familiar with your business. And there is a distribution channel that you don't own and the retailers own, and they control the entire customer experience and they control the entire pricing. Is Walmart. Walmart want discount your product, they will discount it and they don't care about your business right? Now. One of the most important thing when it comes to your distribution channel is the location of your business. It's critical that you have the right location. You want to exist, where there is traffic and where is your kind of customer actually exist? It's just like marketing as well. So distribution and marketing work hand in hand in order to sell to the right customer. You also want to think about your distribution channels, just like a marketplace. Each distribution channel have a specific kind of product that serve specific kind of customer in specific occasion. So say for example, Etsy etsy cell hand-crafted and had made product just like any hand-crafted and handmade market right at the product on these distribution channel, they are actually designed to serve as customer with specific wants, needs and shopping myself. It's unlike, for example, when you go to the supermarket, right? And you want to look for the basics. When you want to, for example, buy food or you buy drinks or by every day consumption product, right? And you can see that on Amazon, that Amazon product sale every day consumption product. And when you want to sell on Amazon, you want to sell this time of products. The second thing to look for, what is your budget and expertise? Not all distribution channel are made will, or work equally for a small business on a limited budget. Therefore, you need to be very strategic when it comes to choosing your distribution channel when you are working on a small budget. So the first question to ask yourself, does my product require a physical location in order for the customer to buy the product or experienced my brand? If yes, then you probably need to invest a good amount of money in having a great store, adequate education. If you don't have the money, it's not actually preferable to start a business that require a physical store. You don't want to have your horrible store or a horrible locations that you have no traffic and then you regret your investment, foreign investor, or tone to the business. The other strategy is that you can't go with product or a service that can't rely on direct to consumer online distribution channel, right? Therefore, you can actually now lower your distribution costs and you can lower your overhead cost at your startup costs. And that's a great strategy for a new and a small business that run on a limited budget. Now, if you decide to go with the offline distribution channel, which is okay if you got the money right now, the first thing that you have to make sure that you build one prototype store, which is egress door. And then you make sure that you document or the process inside the store and how it does store will function. And if you want to scale their business, now your next step is actually to multiply your store or franchise your business as just as large franchisee, but you do it on a small scale and that's how we can grow your business. Now, if you want to go with an online store, now, you have one good strategy which is you start on a marketplace and you start to build a brand and you start to discover what kind of product works well for your business. And then you can do some social proof and you can actually make sure what kind of business you want to develop and grow. Then once you have that, now you can take your product and actually you can't go to a store. And now you can sell direct to consumer but to your, on your website. And probably you could actually have also your own retail stores. And once you accomplish those steps, now you can move one step forward and you can start to sell your product to other small boutique shop. Okay? Now I want to show you one brand that actually is direct to consumer. And actually they started from selling on their own website because they got the marketing, stamina and budget to drive traffic to their website, which we call Dollar Shave Club to spread is great brand. Now, once they actually have established bread, now they move one next, one step ahead and they actually start to sell on Amazon. There are two consumer, right, and also soil own Walmart and they actually widen their distribution channel. But when they started, they started from selling on their own website and driving traffic from YouTube. Now, what if you don't have any kind of marketing experience and the student have a product, what should you do? What the best strategy is just to license your product. And licensing means that you give the right to other manufacturer to produce your product with your recipe. But they actually print their branding on your product. And they actually are responsible for distributing and marketing your product to a consumer. And you only have every months just to collect the money. Now, I want you to keep in mind that for you as a small business owner, I want to take contour control when it comes to marketing your product. And I want it to become responsible about marketing your product. You do not expect your retail store to actually do the moccasin work for you. Therefore, you do your marketing, okay? And you control your marketing and dp of the brand. So when customers go to any retail store, they start to identify that brand name, which you market it. Okay? Therefore, you start with small boutique shop. You do your marketing and you push your tropic to or small website or too small boutique shop or others more put shop. And this gets, the customer gets immediate with your brand name once you do that. Now also retail stores also want to work with your breath because you have already invested a lot of effort into marketing your product. Therefore, marketing and distribution work hand in hand in order to build a complete lifestyle brand. So what do we learn from this course or from this video with your friends? This video is that your distribution channel is like your marketing needs to exist, where the Mach, words, the customer exists. That's essential, right? Once you have that, now you have to understand that you can start from a simple distribution channel that you sell to your own customers. In addition, you can work with different marketplaces or small boutique shops to sell to their customers, right? And once you have a specific amount of customer, now you can take actually your business and you can scale it. You can multiply your store or you can sell to other distribution channel. Alright, so that's it for distribution channels. Okay, So now I wanted to have some fun. What did you enjoy your homework? And I want to take it easy, okay, things will get easier. I promise you. I will see you in the next video. Bye-bye. 8. How To Gain A Customer's Trust: Welcome back. In this chapter, we are going to talk about one of the most important topics when it comes to building your small business had making a sale, which is building trust with the customer. Without trust, you cannot make a seal, my friend, no matter how good you are, period. So so many starting intrapreneur table leaves that exists cream at the customer and makes you aware of their product. The customer will have trust and they will buy the product. That's not true. Screaming at the customer is only makes noise and it's actually disrupt the customer and they don't want to buy from you. You also have to understand that even if you are a great strategist and to create pockets, and you have the greatest strategy when it comes to marketing a product. If you still don't have the trust of the customer, you still are not going to become able to make a sale. Therefore, don't only focus on the tactic and 2, and focus more on how you can build trust with the customer as fast as possible. In order to understand trust, you have to understand how people think and how they interact with other people and how they actually form an idea about other people. And that actually takes time for people to track the other, right? So having trust for your small business is not a matter of actually having your advertisement on a magazine, right? It's also not about having your business listed on a magazine or newspaper as well. That's not how you build trust at a small business. You can do trust as more business when you invest a little bit in your visual presentation and you make yourself look legit. The second thing that you can do is actually you can make yourself familiar to the customer. So you invest a little bit into your organic marketing. And the shorter customer that you care. And you are actually a friendly person who wants to make some good living while serving the customer. The third thing that you want to do is actually you want to become transparent with the customer and you want to make them feel in control of the process of how you make a product. Like that pretty important. The customer need to feel that they are smart and they are doing smart decision. The first thing that you wanna do, you actually want to invest into the customer experience. And do you want to serve the customer benefit before you serve your own? Which means that you're gonna give the customer a grip product. In addition, you want to make the customer feel that they are treated nicely by your brand. Now once you do that, people start to build trust into you and they want to actually start to promote your product to other people. And they actually start a word of mouth marketing. And that's where we actually start to have trust. A customer with other people started to talk about your product, okay? So how can we actually build trust with the customer, right? So let's talk about some strategies. In order to understand that. First, you have to understand that a business is only a matter of transaction, right? A customer gives you money and they expect something in return, and they expect that thing to be at a good quality, at a decent quality. And they also want to make sure that if they don't like the product, it can return it. Now, if you have a physical store or an offline distribution channel, the customer can go to your store and they can actually try your product. And they can see the product and they can expect a product and they can actually have more conversation with you, an intrapreneur, and they can understand what your business is all about and then they can make a purchasing decision. Now, what happened? If you are an online business and you don't have any kind of social proof. And the customer actually can not see your process. And actually the customer can not know if you are a business or if you are a legit business. Now, you actually know we have to invest a little bit into your visual presentation of your brand and you need to have a well-designed website. Now, this does not mean that you have to invest tens of dollars. You only need to invest a little bit into your website. In addition to having a great product photography and a great product copyright right. You want to show that. You're gonna show the customer that your website and your business is legit. The second thing is that you wanna do is you want to list don't you return and refund policy on make sure that the customer feels safe once you want to buy your product and if they don't like it, they can't return it. You also want to list down your shipping policy and you wanna make sure that the customer understand when they will receive the product. Okay? So if you want to seal on a marketplace, you want to make sure that you list your product in a very nice way when it comes to display your product photography, you want to have clean, clear, and well branded photography. You get, you can create a video. All of this kind of proof actually shows a customer that you are eligible business, okay? You also want to invest a little bit in your product title. You don't want to have, you don't want to have a random product title. You also want to invest in the ingredients on how you write your product description, right? You want to show the customer that you actually is eligible business and you have all the right system and process in order to sell the customer. You also want to invest in to the official presentation of how you present your brand. All of these aspects are pretty, pretty important and they actually don't cost you a lot when it comes to present your business. They are only visual, right? And you can hire a graphic designer to choose this kind of work. Now, I also told you that you have to invest it's a bit into your social media account and you want to post isn't bit about your behind the scene, your product, your process, and your business values and so on and so forth. All of these elements are addressed or report for a small business to build the proof, it's fitness. Now, the second step is this is the best way to build trust with the customer, is actually to make the customer try making a purchase with your business. And to do that, you actually need to lower the barrier to entry where it comes to buy your product. And to do that, you need to make the customer feel that they are making a smart purchase. And to do that, you follow a simple recipe, which we call hook sale, impressed as atropine. So let's talk about each one separately. You look the customer when you give them an offer. An offer is not a product. An offer is it is a great deal. So say for example, buy one, get one for free, or gets 50 percent off. Or for example, by two pizza for, for example, $50 or by two for $5 and so on and so forth. Now, all of these deals are not made to make profit, they are only made to break even, or maybe in some scenario, lose some money. But the point of this to you, just to grab a customer attention and makes it a try with your business and have specific thing in their mind. So when they go to your store, they will look for that specific offer. And that's an opportunity for you to grab a specific kind of customer with specific word. Now, once they come to your store, you give them the best customer experience possible because you want to make that sale. You really want to make that sale. And to do that, you really need to keep a great customer experience, okay? You're going to make fuel that. We want to make the customer feel that this is the right product for them. And this customer experience is amazing because once you do that, now they will start to refer to your friend and plink other friend. And they will actually start to actually review your product. And that's what you actually want, right? Once you do that, now we repeat the same process and you will have more customers. All right, let me show an example. This brand sell shirts and they actually promote a lot of offers on Facebook, right? Through advertising. And you can see that three shirts for 89 dollars or $1900 plus, plus free shipping. Now they probably do some money on this offer, but that's not the point. The point is to bring the customer to say a website, right? And keeps them the same kind of offer now or different kind of offers. And you can see that this plant can build a lot of social proof just around this offer. Okay, so once a customer companies that were said there are multiple offers that the customer can choose from, from different shirt design, okay, That's what the plant actually want to try to do. Wonder Bread makes the sale. The other brand can ask the customer for review. And if you have your own website, you can have just, you can't just find a tool that actually helps you to ask for a customer review at that easy, if you sell on platform, that platform will have the tool to do that. Now, if you don't have any customer review, which is not a big deal, but if you're going to have one and you don't have any, you can actually discount you product at a huge price, right? You can't discount it, for example, at 8%. And then you can ask your friend to buy your product and actually review it. That's legit. There is no problem with that. That's not scab that's not like you're you're just can't be asking other people to buy your product at a discounted price and then honestly review the product. Keep in mind that if you create a great quality products and there is no social group around it, you need to do whatever it takes to drive people awareness around the product. And you need also to be a trust around this product because people buy when the other people trust in this product. So there's no shame in asking other people to review your product. Okay, lets it be, don't worry about the other way of how we can actually promote your product or build trust with the customer, is actually when you add an influencer to do a marketing pitch in a state of your business. You can see when the influencer is the right influencer and their value matches your value and they took about a similar product. When it comes to your product category, you will see that their audience was taught actually to like your product and they will buy your product. It's a market product fit, okay. Now, what do we learn from this video? We learned that first we need to invest a little bit into your visual presentation and you need to look gentle and legit. The second thing is that you have to do is you actually need to look familiar with your customer. And you can make the customer feel that you are actually exists and you are legit, right? And that happens through when you advertise on social media or you actually do any kind of organic content on your social feed. The third thing that you wanna do is actually you want to work with other influencer and other people to actually build social proof about your business and make them repair your business to your audience. And that's how you can build trust with the customer. Now, once you have a transfer to the customer, you want to grab attention. You're going to grab the attention of that customer through promoting your product, through your own channels and working with other influencers. And then you want to drive them into an offer. And what they buy the offer. You want to actually give them a premium customer experience. And once they give you, once you get some a firm customer experience, you ask them for review or for example, reserve, right? And you repeat the same process. That's it. Got it. Simple. You don't have to over-complicate the process. It is that easy. Okay? I will see you in the next video. For now, do the assignment, and I will see you later. Bye-bye. 9. Bonus2: Developing Your Marketing Distribution And Funnels: Welcome back. In this chapter, we are going to talk about one of the most important topics when it comes to building your small business had making a sale, which is building trust with the customer. Without trust, you cannot make a seal, my friend, no matter how good you are, period. So so many starting intrapreneur table leaves that exists cream at the customer and makes you aware of their product. The customer will have trust and they will buy the product. That's not true. Screaming at the customer is only makes noise and it's actually disrupt the customer and they don't want to buy from you. You also have to understand that even if you are a great strategist and to create pockets, and you have the greatest strategy when it comes to marketing a product. If you still don't have the trust of the customer, you still are not going to become able to make a sale. Therefore, don't only focus on the tactic and 2, and focus more on how you can build trust with the customer as fast as possible. In order to understand trust, you have to understand how people think and how they interact with other people and how they actually form an idea about other people. And that actually takes time for people to track the other, right? So having trust for your small business is not a matter of actually having your advertisement on a magazine, right? It's also not about having your business listed on a magazine or newspaper as well. That's not how you build trust at a small business. You can do trust as more business when you invest a little bit in your visual presentation and you make yourself look legit. The second thing that you can do is actually you can make yourself familiar to the customer. So you invest a little bit into your organic marketing. And the shorter customer that you care. And you are actually a friendly person who wants to make some good living while serving the customer. The third thing that you want to do is actually you want to become transparent with the customer and you want to make them feel in control of the process of how you make a product. Like that pretty important. The customer need to feel that they are smart and they are doing smart decision. The first thing that you wanna do, you actually want to invest into the customer experience. And do you want to serve the customer benefit before you serve your own? Which means that you're gonna give the customer a grip product. In addition, you want to make the customer feel that they are treated nicely by your brand. Now once you do that, people start to build trust into you and they want to actually start to promote your product to other people. And they actually start a word of mouth marketing. And that's where we actually start to have trust. A customer with other people started to talk about your product, okay? So how can we actually build trust with the customer, right? So let's talk about some strategies. In order to understand that. First, you have to understand that a business is only a matter of transaction, right? A customer gives you money and they expect something in return, and they expect that thing to be at a good quality, at a decent quality. And they also want to make sure that if they don't like the product, it can return it. Now, if you have a physical store or an offline distribution channel, the customer can go to your store and they can actually try your product. And they can see the product and they can expect a product and they can actually have more conversation with you, an intrapreneur, and they can understand what your business is all about and then they can make a purchasing decision. Now, what happened? If you are an online business and you don't have any kind of social proof. And the customer actually can not see your process. And actually the customer can not know if you are a business or if you are a legit business. Now, you actually know we have to invest a little bit into your visual presentation of your brand and you need to have a well-designed website. Now, this does not mean that you have to invest tens of dollars. You only need to invest a little bit into your website. In addition to having a great product photography and a great product copyright right. You want to show that. You're gonna show the customer that your website and your business is legit. The second thing is that you wanna do is you want to list don't you return and refund policy on make sure that the customer feels safe once you want to buy your product and if they don't like it, they can't return it. You also want to list down your shipping policy and you wanna make sure that the customer understand when they will receive the product. Okay? So if you want to seal on a marketplace, you want to make sure that you list your product in a very nice way when it comes to display your product photography, you want to have clean, clear, and well branded photography. You get, you can create a video. All of this kind of proof actually shows a customer that you are eligible business, okay? You also want to invest a little bit in your product title. You don't want to have, you don't want to have a random product title. You also want to invest in the ingredients on how you write your product description, right? You want to show the customer that you actually is eligible business and you have all the right system and process in order to sell the customer. You also want to invest in to the official presentation of how you present your brand. All of these aspects are pretty, pretty important and they actually don't cost you a lot when it comes to present your business. They are only visual, right? And you can hire a graphic designer to choose this kind of work. Now, I also told you that you have to invest it's a bit into your social media account and you want to post isn't bit about your behind the scene, your product, your process, and your business values and so on and so forth. All of these elements are addressed or report for a small business to build the proof, it's fitness. Now, the second step is this is the best way to build trust with the customer, is actually to make the customer try making a purchase with your business. And to do that, you actually need to lower the barrier to entry where it comes to buy your product. And to do that, you need to make the customer feel that they are making a smart purchase. And to do that, you follow a simple recipe, which we call hook sale, impressed as atropine. So let's talk about each one separately. You look the customer when you give them an offer. An offer is not a product. An offer is it is a great deal. So say for example, buy one, get one for free, or gets 50 percent off. Or for example, by two pizza for, for example, $50 or by two for $5 and so on and so forth. Now, all of these deals are not made to make profit, they are only made to break even, or maybe in some scenario, lose some money. But the point of this to you, just to grab a customer attention and makes it a try with your business and have specific thing in their mind. So when they go to your store, they will look for that specific offer. And that's an opportunity for you to grab a specific kind of customer with specific word. Now, once they come to your store, you give them the best customer experience possible because you want to make that sale. You really want to make that sale. And to do that, you really need to keep a great customer experience, okay? You're going to make fuel that. We want to make the customer feel that this is the right product for them. And this customer experience is amazing because once you do that, now they will start to refer to your friend and plink other friend. And they will actually start to actually review your product. And that's what you actually want, right? Once you do that, now we repeat the same process and you will have more customers. All right, let me show an example. This brand sell shirts and they actually promote a lot of offers on Facebook, right? Through advertising. And you can see that three shirts for 89 dollars or $1900 plus, plus free shipping. Now they probably do some money on this offer, but that's not the point. The point is to bring the customer to say a website, right? And keeps them the same kind of offer now or different kind of offers. And you can see that this plant can build a lot of social proof just around this offer. Okay, so once a customer companies that were said there are multiple offers that the customer can choose from, from different shirt design, okay, That's what the plant actually want to try to do. Wonder Bread makes the sale. The other brand can ask the customer for review. And if you have your own website, you can have just, you can't just find a tool that actually helps you to ask for a customer review at that easy, if you sell on platform, that platform will have the tool to do that. Now, if you don't have any customer review, which is not a big deal, but if you're going to have one and you don't have any, you can actually discount you product at a huge price, right? You can't discount it, for example, at 8%. And then you can ask your friend to buy your product and actually review it. That's legit. There is no problem with that. That's not scab that's not like you're you're just can't be asking other people to buy your product at a discounted price and then honestly review the product. Keep in mind that if you create a great quality products and there is no social group around it, you need to do whatever it takes to drive people awareness around the product. And you need also to be a trust around this product because people buy when the other people trust in this product. So there's no shame in asking other people to review your product. Okay, lets it be, don't worry about the other way of how we can actually promote your product or build trust with the customer, is actually when you add an influencer to do a marketing pitch in a state of your business. You can see when the influencer is the right influencer and their value matches your value and they took about a similar product. When it comes to your product category, you will see that their audience was taught actually to like your product and they will buy your product. It's a market product fit, okay. Now, what do we learn from this video? We learned that first we need to invest a little bit into your visual presentation and you need to look gentle and legit. The second thing is that you have to do is you actually need to look familiar with your customer. And you can make the customer feel that you are actually exists and you are legit, right? And that happens through when you advertise on social media or you actually do any kind of organic content on your social feed. The third thing that you wanna do is actually you want to work with other influencer and other people to actually build social proof about your business and make them repair your business to your audience. And that's how you can build trust with the customer. Now, once you have a transfer to the customer, you want to grab attention. You're going to grab the attention of that customer through promoting your product, through your own channels and working with other influencers. And then you want to drive them into an offer. And what they buy the offer. You want to actually give them a premium customer experience. And once they give you, once you get some a firm customer experience, you ask them for review or for example, reserve, right? And you repeat the same process. That's it. Got it. Simple. You don't have to over-complicate the process. It is that easy. Okay? I will see you in the next video. For now, do the assignment, and I will see you later. Bye-bye. 10. How To Design A Business Model: Welcome back. This is 6 of how you can start your own small business and entrepreneurship simplified for small businesses. In this chapter, we are going to talk about what is the most exciting topic for stopping intrapreneur, which is how you can make money from your customer. Now, let me be honest with you. Business is about numbers, okay? If you make numbers, you succeed in business. If you don't make your numbers, you are not going to succeed in your business. If you are not profitable and you are not positive, you will fail and you will exhibit that because you can scale your business and you are going to lose your money as you will bleed money and you will actually bankrupt your business. However, if your numbers are right, then you can become profitable business. And probably you can become a millionaire. Now. In order to understand how you can have the right number, you need to understand the basics of business model. What is the business model? A business model, It's a group that gives us that the business to in order to create a product. And there's a cost of that current activities. And at the other side of the business model, you have the customer. And the customer is the one who pays us the money. And we call that revenue. And there are different ways of how we can generate revenue. And recall that revenue streams. Now, the cost of making your product and running your business exceed your revenue. You lose money. And if the customer pays you more money, more money, and you generate more revenue than your cost of running your business and the cost of making your product. Now, you become profitable. Therefore, for a small business, it's always a battle between controlling costs and increasing revenue stream and the way how can a business generate Bye. Now, there are different kind of cost. The first cost is the cost of making a product, which includes the cost of the raw materials. How much you buy your materials from your supplier, plus the cost of labor. How much does it cost you to actually hire someone to do the work? The other costs, There's an operation cost which is, we go over it costs which include your, for example, your red costs, right? Your utility costs, your administrative costs, the cost of running your business. The other calls that we have, we have marketing costs. In simpler words, is, how much does it cost us to acquire a customer without marketing, we cannot have a customer. You also have the cost of distribution. How much does it cost you to distribute the product and make a sale? Now, let me give you an example. Let's say that we are go to say a T-Shirt and lists is that the cost of materials is $3 per unit. And let's also say that the cost of labor is $2 per unit. I hope you watched my bonus video on how you can calculate your costs. Let's say that the total direct costs of making this tissue is $5 per unit and the retail price is multiply by three and it's $15. Let's also say that the operation cost of running your business, a total overhead of $1500 a month. And let's say that you make 500 units a month. Now, if we divide 1500 by 500, that gets out to $3 per unit. Let's also say that we are going to advertise on Facebook. And because advertising on Facebook, it's very expensive, it's going to cost us $15 to acquire one customer. And let's say that we are going to sell this product on our website. And let's say that we are going to host it on Shopify store. And we are going to give Shopify every time we make a sale 3%, and we are going to give paper. I've credit card for 3% as well, that 6% in total of distribution costs. Now Let's look at all these costs together and see if we are going to make someone, okay. So it costs us $5 to produce a product. The cost of making the product, and we are going to say that $15. Now, if we add $3 as overhead expenses, we'll get to a dollar. And if we have no marketing costs and we only make sales at that price point, we are actually profitable by $7. However, by now you should understand that it's not so juristic to not have any kind of marketing costs. And if we add our marketing cost, now we will get to twenty-three dollars, okay? And if we add our distribution cost, which is 6%, we get to $23.9. We are actually spending $23.9 to make $15 sales. Now let's look at our numbers. 23.9 minus 16 equals $8.9. We actually have lost $8.9. Now, what can we do to actually fix our pricing for a fixed our stream, revenue stream? Well, the first thing that we can't do, probably we can't give the customer an hour. We can tell them that, Hey, your customer, we are going to offer you three t-shirt for thirty-five dollars instead of by 14. Let's see if we can become profitable. Let's try. Let's see if we are just the cost of making the product plus the cost of distribution, how much do we get? Well, it's a minus $6.1. We also lost money. It doesn't work. Let's try something else. Let's say we are going to multiply the cost of making product by five. And we are going to sell this product at twenty-five dollar. Let's see if we are going to become profitable. If we adjust the cost of distribution. Let's see if we are going to make some money. Well, we are making $0.5. Now. We are profitable. But does it worth it to start a business in the first place? Of course it does it. Now. What else can we do? Well, we can tell the customer, their customer. We are going to offer you this T-Shirt for $12 and we are going to lose 10 points, $7. However, the customer needs to subscribe to your service. And we are going to send them every month, one T-Shirt. And every month we are going to make $4 because we don't have any marketing costs or distribution costs, right? And within 2.5 months we will cover our losses. And after that, everything, we make a profit. Or we can give the customer another choice. We can tell them you can subscribe or you can buy this T-Shirt for one time and it's for $30, right? And we can make once asked sale $6.2. Now we give the customer an option and they can actually choose the best network for them. What else we can do? Well, we can expand our product line and we can now have more product at a higher price point. So we can't tell the customer, their customer because you chose that seizure. Now we can actually bundle it into a better offer and you can buy a more expensive thing that actually work with your t-shirt. And we can actually make more profit. And overtime, we can actually opposite of the customer or cross sell them to different products. We can also tell the customer, their customer, we have a kind of service that we can treat your own design, your custom design on our tissue. That is going to cost you $35. And if you don't know how to design, we had designed to work with you and it's only going to cost you $15. We also can't tell the customer that their customer, we have a specialist that can actually work with you on a monthly basis to make sure that we have the right style. If you have the party, we have someone to actually arrange some kind of clothes that will actually make you look status and so on and so forth. And it's only cost you $15 amounts. So now you have two subscription. Subscription is for your bread product line and the other subscription or for the service, okay? You can also tell the customer, the customer. We understand that you value, value add you value quality. And we also worked with other bread and they actually match the same style of our product. And we would like you if you actually try them and we will actually get 25 percent commission on the sale. As you can see, that we can make a lot more money from one customer. We, when we actually diversify our revenue stream. Now there are so many ways for small business to create a revenue stream. You can have a fixed price. You can have upselling, bundling, subscription, commission. You can have digital service and product. And you can also have to have customized order or service. You can have the VIP. You can work one-on-one with the customer. You can offer the customer a membership or you can give them a freemium. It gives them the first trial for free, and then you offer them a premium price. Now, in order to understand how to make more money, first, you have to understand that first you need to have one product or to product to attract the customer, right? And build a relationship with the customer. And once you have that, you want to give the customer a reason to come back for your business. And that's where you have different offers and different services that the customer can try. I can't pay your business more at enjoy working with your business as long as they know trust in your business. As we go back to our niche, strategy is when we know what a dao, our customer base and we widen up our product. And I hope I know these things start to make sense to you. Now let me give you example. Let's go back to question attrition, right? And you can see that they have a lot of product lines, right? And now you can see that inside each product line, they actually have a lot of choices that they give the customer. And ease of gestures is one product. And what's the customer choose one option. They actually have two ways of charging the customer. They can share it. One time purchase, which is not a good thing for the bread. But they can ask the customer to subscribe and they can save, which is a much better way for the grad to bring Eric unit revenue. This spread also sell to us and you can see that they advertise on Facebook for offers and what the customer it goes to a website. They can see a variety of towels and you can see that they have bundled toes, right? They have a lot of towel design. And when you go to the accessories, you can find that they have a lot of small product. That doesn't cause them a lot, but they can actually use it. It's selling at a premium price and they can make some profit and they actually now expand their product line and gives the customer a reason to buy from the brand, and the brand becomes a lifestyle brand rather than only a single product family. If you go to xr bundle, you can see that the brand also bundle different product together and seal that as an offer to the customer. When you go to the product page, you can see that the product at $48, probably if they are marketing on Facebook, they will lose some money. However, when you add the product to the cart, they would ask you if you want to add any kind of accessory item that doesn't cost them a lot, but they actually can make a good margin on that product. Once you pass a product, they will actually keep silly. You e-mails to upsell you across to you in two different product. And they will also promote to you different offers. So we can buy more and more from the spread. And they will use the same strategy on Facebook as well. They will advertise for different products to the same customer. Let me show also remove. This is a brand that is designed to create a software for yoga for people who want to exercise at home with minimal equipment. Now, they have a software. In addition to hardware, they also have closing beauty product at gift card, and that's how they make more money from the customer. And as you go to the clothing, you actually see that they have different product categories for different kind of customer. Right? Now you can see that where the customer try this software and the software, and they build the trust with the software. Now, they can actually buy the physical product, discounted price, and that has a brand can make more money. Now for the software or 40 app, the business model is if freemium, which the customer have 14 days trial, and then they charged him mostly for $20 or nearly a $199. The bread making more on monthly basis if they charged for the Muslim, but they want to collect more money and that's how they charge a yearly. And they encourage the customer to pay them at once because they want to make sure that the customer would stay right, and they will make sure that they collect cash as much as possible. So what do we learn from this video? Well, the first thing we learned that we have to control our costs. If we cannot control our costs, we want to go into become profitable. And once we control our costs, we need to understand that we need to create a product at a low barrier to entry. And once we have that, now we need to get the customer into different product at a higher pricing point. And we can do that actually when you leverage different kinds of revenue stream, such as absolute memberships, bundling, subscription and VIP. Okay guys, so that's going to be for this video. It might be a bit complicated, but it's not. It's just going to find different ways of how you can charge your customer and make more money. I think you will clarify teeth when you do the assignment. So I really, really, really want you to do the assembler, okay? I will see you in the next video. Take care and have some fun. Bye bye. 11. Final Thoughts: Well, hello there. Welcome to the last video of this chapter. I know it's kind of sad to see you for the last time. However, let's get this party going mad or care or lady or a gentle man, you have done its job. It's not easy to become an entrepreneur. It's not easy to study the governorship. It's not easy. It's got to fit in. It's not clear to me this is Course. Hero took me a lot of hard work. And I understand in some scenario, you want to give up, but you did it and you finish the course. Congratulations, you are my hero. Okay, so let's have a button now. Before we finish this course, let me give you few advice from experienced. The first thing that you want to understand that you really, really, really, really, you are nail down your fundamentals, okay? Because without the right fundamentals, you cannot scale your business. And these fundamentals are your customers want. You want to create an affordable solution. You want to establish marketing channels with your customers. And do you want to distribute the product to the customer? And most importantly, you want to build trust with the customer, okay. And do you want to reach transaction as fast as possible with a buying customer? And you want to make sure that this transaction is actually kind of profitable at the beginning stages, okay? And that's why you have to design a profitable business model mole. Now, the second thing I want to tell you about is that I want you to stay away from all of these marketing and sales events, all of these fancy event that they actually want to sell tickets. Okay. You can go there and they can make more money out of you. Okay? I want to stay away of all the of this MLM things because all of these things are scam and they lie and they want to make more money out of you and they seal you marketing more than the ACLU. How we can actually make money as profitable business, okay, so stay away from that. I also want you to stay away from all the drama when it comes to entrepreneurship. Intrapreneurship is not about having a painful life or not having a good life, or the Zohar, Daphne intrepreneurship is all about. See intrepreneurship about, I'm building on what it's about. It's about building a system, is about building an effective system. And to do that, you need to have the right knowledge and bite. Now, you have that. Now you might have the skill and you might not have this cube. If you don't have the skill, hire someone to build the system for you, okay? So you can operate your business, but don't take it personally and don't make it painful for yourself. It might be difficult, it might be hard, but it's not painful, right? So let's get a drama autos effects. The first thing that I told you about is that I want you to treat your business as experiment, okay? So this experiment might go right, or it might goes sauce, okay? Therefore, I want to think about it just like a trial. You try say, some things work and some will not, and something will actually blow and your face, that's totally fine. As long as you can actually devolve strong mental mindset, okay? And you can always step back and get confident in yourself and smile and go back to your business, that's fine. I don't want it to become fragile, okay? If you meet one struggle or one challenge, you give up your business. That's not how a successful entrepreneurs operate their business. You will meet challenges every day. So don't be fragile, right? What I also want to do is I want you to start your small business on a budget, maybe bootstrap your business, right? This will actually teach you how to become an entrepreneur. I don't want you to draw money at every problem. I want to go through the problem and become a problem-solver. I wanted to look for different ways of solving a problem. That money. So I want you to have, for example, a solution forcing that does not require money. For example, you look for relationships, for example, you look for other people to help you with your marketing and so on and so forth. Don't always rely on money, become a resource for intrapreneur. I also want you to focus on your business, just your business, and really serve your customers the best. Don't worry about other people, businesses or other competition. Maybe can have a look at their business, but you don't have the same history at the same time as they started their business as your new business, therefore, don't focus on them. Focus on the customer and make your customers happy that what matters the most. And most importantly, I really, really, really want to focus on the main activities and what matters the most to your business and to customers at the bottom line of your business when you started with MIT and when you have a business, so many people will start to market to you different courses, different product, different solutions that promised you to make more sales. Most scenario, you don't need all this kind of stuff. You don't need all this fancy stopper. Focus on what matters the most to your business. That's it. Okay, guys, it was my honor to be your instructor and your friend. Actually, I'm so happy that you produce a course and I hope to see you in other courses. This was newer with all love, Cheers.