Allon Raiz, the founder of Raizcorp, an organisation that nurtures entrepreneurs, has produced a tool that is both valuable and accessible for founders of small businesses.
IAN MANN | FIN24
It is full of battle-tested wisdom, insights and advice that will have anyone who has ever started a business nodding with recognition. Then I suspect you will be wondering how things might have turned out, had you only come across these insights in time.
The book is written in a genre I rarely enjoy, a conversation between Raiz and Rachel.
Most books written in this format bear a striking resemblance to the Socratic dialogues, with one sage and one stooge or the paper thin characters of the early Blanchard books.
The style works here because the characters are multi-dimensional and have a feeling of familiarity.
Rachel is an amalgam of many of the people who have come through Raizcorp.
She is an entrepreneur whose fledgling business, Divine Designs, is failing to deliver yet again. The emotional strain of the fluctuation, from intimation of success to feelings of hopelessness, have driven Rachel so that she despairs of ever making her business a sustainable success.
Raiz starts by asking Rachel what she would do if she weren't running her business, to which she replies that there is really nothing she would rather do than run a design business.
This is an acid test for entrepreneurial success, explains Raiz, as pitifully few entrepreneurs have ever had an easy time building a business (I have never heard or read of any). When passion for the work of the business is sustained by commitment to the business, the potential for success exists.
To have a business that can succeed, it must have "an economic right to exist". This right is a function of adding value to the customer or client, so that they are willing to pay enough to provide the entrepreneur with sufficient profit.
The book is replete with concrete examples that will enable the reader to assimilate the key messages. "Cole's Law" is a good example of this didactic technique.
Raiz produces a cabbage, carrots and some mayonnaise and has Rachel and her husband make a salad. Then the three of them compare this to a pre-prepared coleslaw salad from a supermarket, which cost multiples of the raw ingredients simply for having combined them.
The entrepreneur's basic task is to combine ingredients, add value, find a name and package it.
However, when Raiz produces his grandmother's "secret sauce" and pours this on the raw coleslaw ingredients, all agree this is special and in a different taste league.
This leads to a discussion of what is special about Rachel's secret sauce that would distinguish her design offering from others.
"Where there is a mystery, there's a margin" - a valued differentiator that cannot be easily copied allows for a price differential that can be sustained.
The conversation moves on to facing the unpleasant facts about one's business without which no progress can be made. Rachel talks of having "about 30 clients" when in fact she has only six, but has at some time served the others.
The candid assessment goes on to interrogate how profitable the clients are, and reveals that the delusion of revenue hides the reality of miniscule profits.
What makes the work so compelling is that it is not a barely disguised textbook on how to establish a successful business hiding behind a narrative, but rather an actual account of what happens to real people in these circumstances.
There is the genuine fear of failure and the fear of the humiliation of confessing defeat to friends and family.
Present is also the very keen and common problem of self-worth, which has a monetary manifestation. Rachel undercharges for her services because she doesn't really believe she is worth more, and as her business starts failing, the self-deprecation only increases.
The book addresses a host of issues commonly overlooked by entrepreneurs, such as the size of the market for the product or service and the danger of superficial "market research".
Raiz cites the example of a young mother who establishes an upmarket day spa where young mothers can spoil themselves while their children are attended to.
The model had done well abroad and friends of the founder thought it a great idea, but it failed. In countries where child minders are prohibitively expensive the spa has value, but in South Africa, where people who could afford the spa can also afford child-minders, the offering has little value and the concept failed.
After addressing the practical issue of finding cash, the entrepreneur's recurring quest, and offering approaches on how to find answers for oneself, the book concludes with a chapter entitled: "Sell, sell, sell".
"From now on," says Raiz to Rachel, "selling needs to become your obsession."
This inescapable fact is what differentiates many of those who have great passion, value-adding ideas, and a saleable product or service and never succeed in creating a business, from those who do.
The chapter provides practical advice on how to improve one's selling and cautions against thinking that selling is the same across different industries. The chapter ends, as all the chapters do, with a useful checklist.
What To Do When You Want to Give Up should be read by all those in the starting phases of their businesses, including those who have worked in other people's businesses and are now going out on their own.
The simple, accessible style should not be mistaken for trivial; this is 180 pages of important information.
Readability: Light +---- Serious
Insights: High -+--- Low
Practical: High +---- Low
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