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Business angel, serial entrepreneur and founder of Pirogov's Bureau design studio Vasily Pirogov in his first column explains why several projects at the same time - this is by no means the path to success and prosperity.
In this article, I deliberately exclude the goal of increasing an already existing significant capital. Some people own lots of hotels, business centers, shopping centers- capital-intensive companies that are created in order to show profitability higher than banking at relatively low risks. That is, we do not consider the case when there is already a billion rubles and you need to attach it somewhere. We are looking for a way to earn it.
One of the most common strategies used by entrepreneurs who want to become successful is as follows: now I have a main business, then I put in a manager or managers, I exit operational management main business, open other companies, hire directors - and as a result, I have many companies that will generate high income (let's denote high income, for example, 5 million rubles a month).
I myself have used this strategy - and very unsuccessfully. Also, all my acquaintances - who tried to use it - did not become successful as a result.
History of owning multiple businesses
Many entrepreneurs tend to hire managers for new businesses. At first, everything works well, but as the business develops and competition increases, all these businesses, which seemed independent, begin to require attention, competence, time of the main owner, as, probably, the most extraordinary in terms of mind and seriously ill with his idea of a person. And because of the lack of this very attention, everything open companies grow to a certain level above which they cannot rise. Depending on the competition in the market, this can be either a break-even level or a loss or a small profit. As a result, the owner rushes between businesses, solving various problems. As a result, it turns out that the entrepreneur has a main business that makes a profit, and businesses that spend it. If all businesses are connected to each other or are in adjacent niches, then the situation looks more positive, but still often leaves much to be desired.
It is also very important to note that if you run and develop several businesses, then you need to be prepared for the fact that there will be a lot of stress, because something constantly happens in each of them. You will never go home happy with the mood that everything is finally fine everywhere. Somewhere it will always be bad. Whether you can handle it is up to you.
So how to be?
A little about markets and competition
To begin with, I will make a small remark about markets and competition. The fact is that with increased competition, when the market becomes more and more saturated, the requirements for capital and/or competencies of managers of this business increase. That is, if the market is low-competitive, then the hiring manager will easily cope with the management. If the market is highly competitive, then in order to successfully develop your business, you need extraordinary skills of the owner, or capital, if the industry is capital-intensive.
In simple terms, competing on a big free market with two or three people, it is enough just to somehow manage. But then another 10 people of competitors come, and you already need to be no worse than them. Another 100 people came - and in order to simply survive, you need to be already above average, since there is not enough money for everyone in the market, and out of these 100 people, 50 will work at a loss. And in order to achieve success in a market where there are 100 people (companies), you need to be at least better than 95. This already requires very serious work on yourself and the inclusion of the owner in this business.
And the Shvets and the reaper and the player on the pipe
Now let's look from the other side. If you want to make a lot of money, then it is extremely important to hit one point and focus your efforts on one business in which you have the greatest advantage, or in one niche where there is a maximum opportunity to develop. If your talent is spilled over to many companies, then each company will only get a small fraction of the time it could have.
Imagine a person with the talent of a musician who is also a dancer, an athlete and a good cook. I am sure that he will earn more money if he works as a musician. The example is quite simple, but it best explains the fact - if you distribute your skills among businesses, then the efficiency and efficiency in each of them will be below average.
Flow and focus
Any person has such a state as a state of flow. This is especially evident in creative professions but also applies to all other activities. The fact is that if a person does one thing, he concentrates much more strongly and gets a much better result than spraying himself into several areas. If he sells books, then he learns about this much more subtleties, patterns and rules, devoting his free time from routine to studying the sale of books, and not, say, opening a beer restaurant.
Summarizing
Based on the previous three thoughts, we can conclude that doing one thing is much more effective than spreading it over several projects, and this is especially true for medium-competitive and highly competitive markets that require a lot of attention and effort from owners.
But what to do in a situation where the main business brings little money, or has already hit the ceiling, and you want to earn much more? The next thought is usually: what if we just open another startup and develop it within a year or two? But it is obvious that there is a big risk of failure and loss of time. What to do?
Startup Farm
You can use a structure such as a “startup farm” (this is my term).
The essence is very simple:
1. We create several (3-5) startups in parallel until the first commercial tests or a little longer.
2. We look at which startup shows the best results or prospects.
2. You need to make a difficult decision to exit and close each of the startups quickly and without emotions. Otherwise, this scheme will be no different from the unsuccessful “parallel businesses” scheme that I described at the beginning of the article.
3. You need to come up with 3-5 good ideas for testing, study the markets, evaluate the competition. This requires quite a lot of time and knowledge.
Summing up, we can say that one of the main enemies of an entrepreneur is time. Many people want to be successful at a young or middle age. Most likely, you will achieve success by doing only one business. But it must be the best, most profitable and promising business. And in order to find one, it is not enough just to invent good idea. You need to come up with a few ideas, test them, get rid of the bad ones and focus on the best. This approach allows you to significantly save time, instead of delivering tolerable inconvenience.
Each approach has its pros and cons. When you start your first business, you have to learn new things very quickly, which makes focusing on that particular venture almost essential to success. But once you and your team have gone through this process, you have the opportunity and ability to apply what you've learned to starting other projects, and it's quite possible that you'll have to run them all at the same time.
To make the right choice, you need to understand when something is worth taking on and when not. It can be difficult, especially if you like to say yes - like me. In the early days of the Virgin Group, one such mistake almost destroyed our company.
I still get occasional tweets from people who are surprised that we used to make movies. Our business was called Virgin Films (obviously) and in 1984 we were going to adapt George Orwell's 1984 for a film adaptation starring John Hurt (a British actor known for Harry Potter, V for Vendetta, Only Lovers Left Alive) - ed.) and Richard Burton (seven-time Oscar nominee, known for his roles in "Cleopatra" and "The Spy Who Came in from the Cold" - ed.). That same year we launched Virgin Atlantic and looking back, our team took on too much.
Richard Branson on Virgin Atlantic's first flight from London to New York, 1984
The cost of the film got out of control - shooting ended up being three times the original budget. Our entire company came very close to bankruptcy. Launching two risky businesses at the same time turned out to be beyond our power, and therefore we agreed that it was necessary to get off the ground with Virgin Atlantic. (I'm happy to report that Virgin Produced, our later entry into the movie business, is faring much better than the first venture. And you can still find our version of 1984 on Netflix.)
However, entrepreneurs must always consider their capabilities and look to the future - and sometimes this means that they will have to take on several projects at once, despite the difficulties. For example, when we launched our very first business, Student magazine, we also decided to start a mail order business. After a while, things picked up and when the magazine became unprofitable due to lack of advertising, we were able to just close it and focus on selling records. Later we launched Virgin Records, which might not have happened if we were doing just one project.
When you're getting ready to juggle multiple businesses, you need to make sure you have enough hands to grab each ball. Of course, it's good if you can afford to hire talented employees and delegate responsibilities to them, but it's not always about money. We've learned that experience helps the most - the more you do something, the easier it becomes. Starting a company is never easy, but things can go more smoothly if you have a wealth of experience with which to solve any problem.
Greetings!
Yesterday, one of my old students asked me how best to run 3 projects: writing sales texts, an Internet marketing studio, and selling physical goods.
I answered him: it’s better to close 2 of them, and leave only 1.
The law of concentration. The Greatest People on the planet has always focused on one direction (or on a small number of really important things). They knew that more success can always be achieved if you do not scatter, but hit in one point.
But for some reason, I began to notice that now most people - seekers. They spend their whole lives looking for something else - instead of deciding on a niche and digging the earth as deep as they can.
I think it's real disease which is imposed from outside.
Every day we are bombarded with different success stories, new "chips", new types of business... A housewife from Kukuyevo became a millionaire selling MLM products - join our company XXX! Vasya Pupkin bought a plant after coaching - come study at BM! Ivanov Ivan earns 5,000 bucks a day by making several videos on YouTube - take care of YouTube promotion! And so on.
And of course, after these stories, we want to break away, throw our slowly developing career or business to hell, and start a new super-business!
As a result, millions of people live in dangerous delusion as if success is to be FOUND, not EARNED.
You must understand. the information age is feeding us huge amount information that we can't handle.
But at the same time, chasing the new, we violate the LAW of the universe - the law of maturation. We try every day to sow new, better grains, but we can never wait for the ones sown to ripen.
After all, whenever we decide to burn bridges and abandon our accumulated experience, authority and connections in favor of something completely new, we start with zero. We are destroying the crop without harvesting it.
From here comes the mass of the "smart poor" - people who know how to sow, but do not know how to wait. I hope my article will help many to think and understand why someone becomes outstanding, and someone remains in poverty all his life.
Arthur Grant
And here's something else... Why then some successful people lead 100 - 1000 business projects at the same time? Because they lead them as investors, and in each project they have a manager (executive director). Ordinary mortals who have no experience and at least 1,000,000 rubles in reserve should not even think about 2 projects. It is better to choose 1 for yourself - one that is in demand, and most suitable for your strengths. And take 100% for its development. Drop all doubts and move forward!
When another businessman opens another bookstore in the area, I clutch my head. Didn't he see how previous bookstores went bankrupt and closed? Now only those who are helped by the local administration are keeping afloat (and even then, they don’t even hold on, they drown very much).
Usually you go to such a provincial bookstore: two aunts are sitting - one at the checkout, the other in the hall. They sit and are silent, or enthusiastically chatting among themselves. Either one sits (guards the cash register), and the other follows the potential buyer, making sure that he doesn’t steal something from the shelf (yes, because of this alone, you don’t want to come here a second time).
The traditional bookstore will not survive today.
If books are so dear to you and you don’t want to go around the world either, you need to somehow get out.
In Moscow and, perhaps, in St. Petersburg, some bookstores have already been rebuilt, but not all (two years ago I was in the St. Petersburg store of the BHV publishing house - a pitiful sight; I only needed a map of the city).
Before, except for an urgent retraining, I didn’t have a recipe for bookstores. But after I read two news stories on the Internet the other day, how libraries in two different Russian cities began to provide baby-sitter services, I realized that this is something that will help bookstores too!
Shop like a baby sitter
You can, indeed, provide Babysitting services while their mothers solve pressing problems (running around shops or looking for work).
Almost all of these bookstores are located in good walk-through places (in our city, anyway) (they had a problem not because of a bad location, but because of a decrease in the interest of the townspeople).
Their premises are spacious. Bookshelves stand along the walls (there are also tables or boxes with books in the middle of the hall, but they can always be moved).
There is something to occupy children (this and Board games, puzzles, the same books with bright pictures).
Even just reading a fairy tale to a child is a double benefit for him. He will listen to a book (he will spend time) and will learn to read (once the director of our local GORO, when I asked how to teach children to read, once simply said: “You just need to read a book to a child. Sooner or later he will show interest in them”) .
Courses for children and adults
In parallel with leisure, you can organize courses for schoolchildren and even for kindergarteners. For example, reading. Too many schoolchildren today go to school unprepared, they cannot read (before that, they were driven by the same computers that replaced books for children).
You can teach mathematics, Russian, anything. After all, any study guides Here they are on the shelves.
Of course, not all bookstore salespeople will be drawn to the role of a tutor. But it’s not good to recruit such “specialists” who can only stand or sit (such can be replaced by a video camera and a mannequin).
If you want to live today, know how to spin. (Even simple cashiers today have been taught to say "Hello" and "Thank you for your purchase").
Well, yes, everything is clear with children (they can be taught a lot of things). But what to do with the aforementioned BHV store in St. Petersburg? He won’t pull on the role of a baby sitter, he won’t teach children the alphabet. It is not as spacious as many other bookstores.
But if you think about it: those who read books from this publisher clearly want to learn something:
Why not only sell the book to the buyer, but also offer him to study in a specialized course (on the topic of this book)?
Moreover, most of the day (and two whole days a week) the bookstore is idle:
I think that among the authors of this publishing house there will certainly be people who, in addition to the fee for publishing a book, will also want to receive additional monthly income for teaching readers about their science (after all, there is no need to spend money on advertising or rent!).
So if you want, the most unprofitable bookstore can be turned into a successful business.
Services of a speech therapist
The bookstore provides speech pathology services. Many people need such services, even adults. And even to those who appear today on TV (the speech of other journalists simply shocks me).
“There are many speech therapists,” many will say. But how hard to find them!
Do you know why a private medical clinic is popular in our city? Because you can only call - and you have already been booked for a certain day and hour for an appointment with a specialist. Unlike a free polyclinic, where the nurse on the phone first gets a little sloppy for a few minutes, then she says that there are no coupons and she does not know when they will be.
In our country, even pensioners prefer to pay 1,500 rubles so as not to experience humiliation from the intermediate staff, only to immediately get to the right specialist, without hassle and for sure.
So it is here - how nice it will be to come to a speech therapist right away, without difficult searches for ads and acquaintances, without begging to take you at such a time, and not another. Without making your way between the houses of someone else's microdistrict and finding the right entrance. Without solving the problem, go to the entrance and find the right apartment. Without the inconvenience of sitting in someone else's lair, when the hostess rushes between you and her life.
We have unemployed speech therapists (who were taught at the institute in their time, but were not provided with work). Give them a table in a bookstore marked "Speech Therapist" - and let them wait for clients (who will certainly appear), as a hairdresser or manicurist waits for a client in a beauty salon.
Interest club
A bookstore can be a hobby club. After all, here comes its own, specific audience. Kindred spirits, so to speak. They have something to talk about, something to discuss. The same new books, for example. Through constant communication with their customers, bookstores will know what literature to purchase. After all, there is a lot of it, but not every bookstore knows what to bring to your reader today (I once looked for books as a gift to my mother for her birthday - there was not a single one in a huge bookstore worthy book! Because stores are afraid to buy elite piece goods for connoisseurs of literature.)
Even just talking to your target audience, store employees will know WHAT they are interested in, what product they will buy immediately.
In our store, exactly as I described above: two aunts are sitting (only these are not aunts yet, but girls; who understand computers, but do not understand at all WHAT buyers need).
Instead of bringing 10 boxes of different puzzles, they bring 10 boxes of exactly the same puzzles (with the same pictures) thinking they are consumables. (And why do I need a second puzzle of the same type if I already bought one? And if I am a lover of puzzles, then I will wait for new arrivals. Instead, I come here and see how twin puzzles stand and gather dust on the shelves, which no one other than me are not needed.)
More services
There can be many services that a bookstore can provide. From elementary photocopying, printing electronic documents and digitization of photographs to an individual search and ordering of the necessary literature via the Internet (after all, not all book lovers feel confident on the Internet, it is especially difficult for them in our time. I came to a bookstore to buy a book - and the situation is much worse than 20 years ago. This part of the audience cannot be written off).
Other books will never see the light of day. paper form. But at someone they lie at home and are exhibited on some second-hand bookshops. Finding them and arranging delivery is another service from a bookstore (this is where the computer skills of today's youth come in handy).
Photo shoots, design work, translation services - all this can be done in a bookstore.
Any cultural services are possible here, which do not require much space and do not produce a lot of noise and dirt.
And the last:
Courses for businessmen
If the bookstore survives and even starts to bring in a good profit, it can honestly start conducting courses on the topic “How to survive in a crisis”, “How to double sales” - and this is even more money and even more benefit for other city stores and for society as a whole.
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