BUSINESS THEORY BY ERIC FORKOSH
Goal of business – profit
Profit from selling/renting out products to customers
Engineers design product
Manager orders more product and mails product to customers
Customers are hooked by salespeople
More staff are hired as the revenue and demand increases
From Concept to Reality:
Research and Design
Make a prototype
Fix prototype’s flaws
Create final version
Allocate manufacturers to build product and find assembly house
Now have a finished working product that is ready to be sold
Test the Waters:
Sell to a few customers
Maintain a close relationship with the first customers, and ask for suggestions to improve
Improve anything that needs improving
Now ready for many sales
Making the Big Bucks
Hire salespeople and manager to arrange for the purchasing of more raw products and to deal with shipping
Pitch to organizations that will buy product in bulk
Buy in bulk to reduce costs
Sell to organizations and to customers
Hire a technical staff to replace the engineer and to do tech support for customers
Engineer is now out of the loop and collects cash
Engineer becomes super rich and buys a helicopter and Humvee
How to run a company without outside investment
Keep little or no products in stock: Create a product that would not be sold to individual consumers, but rather to companies or organizations on some sort of contract. In the contract with the company or organization, a lead-time of several weeks would be understandable and acceptable.
This allows the raw materials to be bought when they are needed, and therefore little or no stock would have to be kept, resulting in less need for investment.
Do all the technical planning: If you don’t remotely know how to pull off an idea, don’t do it and move on to another one. Research and plan out all the systems of your product and include a basic idea of how to make each system work – this is the technical overview.
If you hire a professional and present a plan in technical terms and say this is how you would do it, you would use this type of algorithm, he wouldn’t charge for planning and he would deliver exactly what you wanted.
Do most of the technical work – Try to do as much of the technical work as possible and don’t be afraid to learn new things. However, if it will take more than 1 month to learn how to do something, then just outsource it and hire a professional.
Only hire when you need to - Don’t hire salespeople and engineers right away. Only hire them as the money becomes available or when there is a big prospect of the money becoming available