Under30CEO » keithpetri http://under30ceo.com Wed, 30 Jul 2014 13:00:56 +0000 en-US hourly 1 http://wordpress.org/?v=3.6 Under30CEO interviews successful young entrepreneurs to hear about their story and journey while starting their company. These young founders have over a million dollars a year in revenues and have been through many ups and downs to get there. These stories are meant to inspire, educate and motivate more young people to take a leap and do what they are passionate about. Under30CEO clean Under30CEO jared@under30ceo.com jared@under30ceo.com (Under30CEO) Under30CEO Interviews with Young Entrepreneurs on Starting Businesses entrepreneur, business, interview, young entrepreneur, business advice, startup advice, founder interview, ceo Under30CEO » keithpetri http://under30ceo.com/wp-content/uploads/2013/09/u30logo300x250.png http://under30ceo.com Exploring An Opportunity: Will My Idea Work? http://under30ceo.com/exploring-an-opportunity-will-my-idea-work/?utm_source=rss&utm_medium=rss&utm_campaign=exploring-an-opportunity-will-my-idea-work http://under30ceo.com/exploring-an-opportunity-will-my-idea-work/#comments Tue, 23 Apr 2013 13:00:38 +0000 keithpetri http://under30ceo.com/?p=27924 Is my business idea good enough to pursue? Entrepreneurs, students, and young professionals all face this question when contemplating a business idea. Some may be considering leaving behind a steady paycheck and work-life balance. Others may be escaping the hierarchy of corporate America or the perils of unemployment. Regardless, a startup is not all about wearing […]

The post Exploring An Opportunity: Will My Idea Work? appeared first on Under30CEO.

]]>

Startup Idea- will it work?Is my business idea good enough to pursue?

Entrepreneurs, students, and young professionals all face this question when contemplating a business idea. Some may be considering leaving behind a steady paycheck and work-life balance. Others may be escaping the hierarchy of corporate America or the perils of unemployment. Regardless, a startup is not all about wearing a pinstriped hoody. Building a business from the ground up is hard work.

Everyone has ideas, but it takes a certain skill set to analyze a potential opportunity, develop a plan, and successfully implement a long-term strategy. Establishing a business and effectively laying the groundwork for sustained growth is an incredibly rewarding experience.

Before taking the plunge I encourage you to envision your business as a success in 2, 5 and 10 years from now. What does your life look like? How much money are you making? Have you hired 4 employees or 500? Are you strictly domestic or have you extended your reach internationally? Completing this exercise will allow for you to clearly define benchmarks and establish processes for the short-term that ensure long-term success.

The following are five essential things to consider before pursuing your idea.

1. Personal Qualifications & Idea Viability

There has been much debate regarding how to validate your business concept. Idea formation techniques discuss actions one can take to brainstorm potential concepts. If you focus on solving a personal problem, you can find customers who have a similar pain-point. Once you have an idea, share it. The feedback you receive represents the results of free market research. It is ideal to have potential customers validate your idea before investing time or money.

Solving a personal problem with a pre-existing skill set is the perfect scenario. This allows you, as the entrepreneur, to be an established expert in the field. Gaining credibility lowers the barrier to entry and minimizes the chance of experiencing challenges when closing your first few partnership deals or sales.

2. Market Size & Competition

Contrary to popular belief, there is always more room for new entrants into a market. The key is to be able to clearly define a differentiating factor or to target a market niche. Creating a competitive landscape – and including all potential threats to your product or service – allows for you to visually determine your value add. Once you have identified your business’ differentiating factor, you should highlight it in all marketing and sales materials.

3. Pricing & Expenses

Cash flow is the heartbeat of all business. Understanding your pricing structure, margins, expenses, and sales pipeline is the only way to forecast your continued business health. First time entrepreneurs sometimes forget to include certain expenses when forecasting earnings. Overlooked categories include utilities, travel and fuel, time (including time spent researching your field), prospecting, and sales.

4. Product Positioning and Marketing

Clearly articulating your product or service will increase both inbound leads and conversation rates of sales. You can choose to position yourself based on price, customer service, technology, convenience, etc.

5. Lawyer & Accountant

Although expensive, hiring both a lawyer and accountant is necessary for proper business formation. Industry specific lawyers and accountants are familiar with the best type of legal entity to setup for your new venture, and they have experience formalizing contracts, complying with local and federal tax regulations, and ensuring your personal protection. While not a top priority for most first time business owners, it is an unfortunate necessity for both online technology startups and more traditional businesses (i.e. online terms of services and privacy statements & contracts, respectfully).

Starting your first business is a challenge, but its also an unforgettable journey. Enjoy it.

Keith Petri is currently the SVP of Business Development at eDealya, which empowers brands and agencies to better understand, engage, and target their customers. He previously owned CNSLT.us & founded iGottaGuide. Educated in business, economics, and studio art with a strong passion for marketing and technology, Keith is currently based in New York and enjoys connecting with like-minded entrepreneurs.

Image Credit: Shutterstock.com

The post Exploring An Opportunity: Will My Idea Work? appeared first on Under30CEO.

]]>
http://under30ceo.com/exploring-an-opportunity-will-my-idea-work/feed/ 6
7 Factors to Consider When Developing a Pricing Model That Works http://under30ceo.com/7-factors-to-consider-when-developing-a-pricing-model-that-works/?utm_source=rss&utm_medium=rss&utm_campaign=7-factors-to-consider-when-developing-a-pricing-model-that-works http://under30ceo.com/7-factors-to-consider-when-developing-a-pricing-model-that-works/#comments Fri, 29 Mar 2013 15:00:00 +0000 keithpetri http://under30ceo.com/?p=28151 A business’s pricing model must align with its revenue and business model. All aspects of your business are interdependent on each other and result in a cohesive strategy. Pricing a product or service is dependent on not only your costs, but your sales cycle, churn rate, desired market positioning, and numerous other factors that vary based […]

The post 7 Factors to Consider When Developing a Pricing Model That Works appeared first on Under30CEO.

]]>

Pricing ModelA business’s pricing model must align with its revenue and business model. All aspects of your business are interdependent on each other and result in a cohesive strategy. Pricing a product or service is dependent on not only your costs, but your sales cycle, churn rate, desired market positioning, and numerous other factors that vary based on the industry and an individual owner’s point-of-view.

As such, let’s explore seven of the factors one should consider when establishing a pricing model:

1. Sales Strategy Formation

Having a structured sales process will result in organized outreach to qualified leads. Based on these interactions with your target audience, a business can continuously refine its sales pipeline to not only increase its closure rate, but also allow for it to properly project future cash flows and manage project timeframes based off of projected closing dates. After each interaction with a potential client a sales team should take notes and adjust its strategy for the next similar interaction. Continuously improving the sales process will provide feedback on the pricing model based on potential customer’s feedback and closure rates.

2. Projecting Sales Cycles

Understanding the average deal value and deal probability at each stage of a business’ pipeline allows for it to identify the number of prospects it needs to contact on a monthly basis to retain positive cash flow. Proper projections enable you to finance equipment and human capital (future monthly wages) – resulting in continuously growing business. Understanding a business’s sales cycle allows for an owner to determine how seasonality and other outside factors can be affected by a pricing model.

3. Pricing Strategies

Pricing strategies vary greatly depending on the industry, product or service, and desired market positioning of your business. With the shift from more traditional models to digital pricing strategies, businesses are now able to present the cost of a product or service to advertisers instead of directly to customers.

Whereas traditional models relied heavily on either the Cost of Goods Sold or Customer Perceived Value, modern pricing strategies can offer a product or service free for consumers, but monetize their audience by presenting targeted advertisements. Other methods include a tiered feature model, Freemium services, and many more.

4. Repeat Customers to Secure Monthly Revenue

All customers are divided into real, expected, and potential value. Each of these segments aligns with a customer as she is converted from a one-time shopper, to a repeat customer, to a highly valued brand advocate. Cultivating repeat customers with strong brand affinity increases the average customer’s Lifetime Value, and thus, future revenue. Tweaking a pricing model may motivate one-time or sporadic customers to become repeat customers – resulting in a longer customer lifetime and higher potential value.

5. Churn Rate and Cash Flow

If your business is one with a historically high customer churn rate (i.e. telecommunications), it will greatly affect how you price your product/service against competitors. However, if you are in a more stable industry (i.e. SaaS platforms), then playing with your pricing model over time can provide great insight as to the customer perceived value of your service. Regardless, Churn Rate is a primary factor in determining sales goalsprojecting cash flow, and managing business growth - all affected by your company’s pricing model.

6. Customer Acquisition Cost (CAC)

CAC is calculated by determining the ratio of total cost of sales (including labor, marketing, on boarding, and all related expenses) to the number of newly acquired customers during a given period of time. CAC should be monitored each quarter to ensure business stability, in addition to before and after any large initiatives to measure their effectiveness. A pricing model must both account for these costs when determining the value of your product or service, and understanding the effect of pricing on sales closure rates.

7. Inbound Sales Leads

Increasing inbound sales leads can minimize Customer Acquisition Costs (CAC). Inbound Sales leads are generated by referrals, organic site traffic, strategic press, word of mouth, white papers, networking, infographics, and the like. Creating a healthy inbound marketing channel will result in a reduced customer acquisition cost and more qualified prospects. As a result, a pricing model must be easily understood by inbound leads to maximize conversion rates.

A pricing model, like most of your internal business strategies, should be continuously monitored, analyzed, and tweaked to ensure positive results. Understanding these seven factors and your overall business health will lead to business gains.

Keith Petri is currently the SVP of Business Development at eDealya, which empowers brands and agencies to better understand, engage, and target their customers. He previously owned CNSLT.us & founded iGottaGuide. Educated in business, economics, and studio art with a strong passion for marketing and technology, Keith is currently based in New York and enjoys connecting with like-minded entrepreneurs. You can connect with him on Twitter @KeithEPetri.

Image Credit: Shutterstock.com

The post 7 Factors to Consider When Developing a Pricing Model That Works appeared first on Under30CEO.

]]>
http://under30ceo.com/7-factors-to-consider-when-developing-a-pricing-model-that-works/feed/ 0