How to Define Your Business Purpose
Welcome to the Titanium life podcast. This is your host Arman Sadeghi, and today we are going to talk about your business. Now whether you already have a business, and you are trying to take it to the next level, or you are just an entrepreneur who just started a business, or you are an entrepreneur who is currently working for someone else and wants to get into business, this is the most important thing that you need to understand, in order to take the next step.
Different Business Purposes
You see, I coach a lot of business people. And it’s amazing to me, whether they’ve been doing business for a year, for five years, or for ten years or more, when I walk in, the first question that I ask them is, tell me specifically what business you are in. And I say, exactly who is your ideal client? And what I am shocked by, is 90% of the people I talk to and coach, have no clue what business they are in, and they have no clue who their ideal client is. Now listen. They give me some answers, it’s not like they say I don’t know.
Who is my Ideal Client?
They give me some answer, but it is clear that’s not something they have thought through. So I ask you this question, what business are you in exactly? And who is your ideal client? Now let’s say you are a dentist, and you hear this. A dentist is someone we can all relate to because we’ve been to the dentist. Well, I say what business are they in, and they say well I am in the dentistry business.
I am in the business of dentistry. And who is your ideal client? Well anybody who needs work done on their teeth.
See, that’s not the answer I am looking for. I am looking for them to tell me exactly what business they are in and exactly who their ideal client is.
Because you see, not every dentist is in the same business. Some dentists are focused on the kind of dentist that creates a calm and soothing environment, so people can feel at peace when they are there. So their ideal client is someone who wants their experience at the dentist to be calm and relaxing — something along those lines.
Someone else is going to say I have the highest quality dentistry practice you can imagine. Right, that’s a different concept. Not that the person who creates a relaxing and soothing environment isn’t going to go for the highest quality, but see, that is not their business. Some other people are focused on a certain region.
Some people go after a certain type of group of people. So for example, some types of dentists go after children and their ideal client becomes a kid between a certain age and a certain age.
But at the same time, in that case, even the client isn’t the kid, the client is their parent. So they need to understand that. So today what I want to talk to you about, Is I want to make sure you understand exactly what business you are in, and who your ideal client is. And then we are going to talk about how to not get “Blockbustered”
All right, so write that down. Don’t get Blockbustered.
I Want to Keep You From Getting Blockbustered
That is an important thing. And today I am going to talk to you about how not to end up having the same fate that blockbuster video had. And we will talk about what happened to cause blockbuster video to have a massive company that really controlled and ruled the market, and what caused them to crash and burn so quickly.
And have this incredible company fall apart. Why? Because they have made one simple error. I am going to tell you what that error is, and I am going to make sure you don’t make the same error in your business. But let’s start with first thing first.
What Business Are You In?
What business are you in? Now, when I say what business you are in, what that means is I want you to identify exactly what business you are in. What products and services are the key products and services that you want to give people, the solutions you are going to provide people or businesses. You can be a B2B or B2C, that means business to business or business to consumer.
But you want to make sure exactly what you are doing for your business. To identify that, you really have to break your business down. And you are going to stop being everything to everybody. So at the end of the day, if you are really going to be one thing, what would that thing be? And what would you call that business?
How would you describe that business? That’s what I want you to do. And today you absolutely must take the time to identify exactly what business you are in. And for me, for example, I have got six different companies. And each of them is in a different industry. But it’s important for me to know for each of those companies, exactly what business I am in. And for any of you entrepreneurs out there, you are sort of all over the place. Right, and you are trying to do everything, and that’s okay.
There is nothing wrong with trying to do multiple things. Although as I’ve said repeatedly, focus, is what creates incredible power in life. So you must learn how to have a focus.
But that doesn’t mean you have to work on just one thing. Just means whatever you are in, just focus on it a hundred percent. But at the same time, you’ve got to decide what our primary business is.
What is the business that’s going to make you thrive? And what exactly is that business? Alright. So for example, if I am doing this podcast, I’ve got to identify what is this podcast going to be all about. And I have to decide is it about motivating people? Is it about giving out information?
What is it about? And for me it is all about helping entrepreneurs and business people take their businesses to a completely different level, and the way I help them do that is by making sure that I help them thrive in their personal and in their business lives.
See, that’s what sets me apart. If you are going to compare this podcast to the next podcast that talks about business, the difference is I am focused on you as a business owner. As opposed to someone else who is maybe focused on marketing and sales.
My focus is on how I get you to thrive, and that means I can only give you the business tools, I must give the personal tools as well. But you see, you see after listening to that? You think. wow, this Arman guy is very clear on what he is trying to do.
That’s exactly what I want from you. So, once you’ve identified exactly what business you are in, the next question I am going to ask you is, who is your ideal client? And when I say ideal client, almost everybody I know ends up essentially telling me everyone is their ideal client.
“Everybody” is not Your Ideal Client
Everybody. Because everybody wants to get everybody. Right, so I have a podcast, would I like to have more people listening to my podcast? Yes, of course, I would. But, will a random group of people, be the best people to market to? No, because they are not going to find my podcast interesting.
So what I want to do, I want to identify a group of people who are an ideal group for me to target with my podcast. Because they are the people who are going to get the most of my podcast, and at the same time, they are the people that I want to speak to. Right, that’s critical for me.
How to Attract Your Ideal Customer
So for you, I ask you now, who is your ideal client? And I’ve developed a 3 step process for determining your ideal client. And it is very, very easy. So if you follow this 3 step approach, you are going to be able to identify exactly who your ideal client is. So you’ve got to work your way through 3 different things.
Key 1 – Your Ideal Client Has to Be High-Margin
Number 1 it has got to be a group where the business you do with them is high margin business. I mean, you don’t want to build your business around an ideal client. That’s not high margin. And meaning that you have to be able to make high profits on them, right. So you can’t be distracted by the little stuff you do that doesn’t make you much money. It has got to be a high-profit business.
Key 2 – You Must Have Access to Enough of Your Ideal Clients to Sustain Your Busines
Number 2, there must be enough of them out there to make your business succeed. It’s really important. You see if you start a business, and you have this ideal client who is really high margin for a service or product, but you forget that there is not enough of that business out there.
If there are not enough of those people out there, well then you are not going to be able to succeed. So one, your business has to be high margin what you do with them. Number two there must be enough of them out there for you to make your business succeed.
Key 3 – You Must be Able to Provide Your Product or Service at a High Quality
Three, it must be a product or service which you can provide at a very high quality. So what is a product or service that you can provide very high quality, that is high margin, and it will be targeted towards enough people or enough businesses that can make your business thrive?
You answer those three questions and come up with one set of ideal clients, and you now have your ideal clients. Now, can you have 2 or 3 ideal clients? Yes, you can.
You can have multiple ideal clients, just sort of order them, okay. And I would really not recommend going more than two or maybe three at the most because you don’t want to spread yourself too thin. So I would say pick 1, 2, or at most three ideal clients that are going to be the clients you will target. So for my podcast, for example, we have identified two groups that are our ideal groups.
Right, and we have identified them in more ways than you can possibly imagine. We have age groups; we have interests, we have all of that kind of stuff, built into exactly who we want our ideal client for this podcast to be. Not that this podcast won’t speak to other people.
But the ideal clients, the ones that we are willing to market to, the ones that we are going to talk to on a day to day basis, the ones that I am going to think about before I start to record the podcast.
Those are the people who are ideal clients. So for you, who is your ideal client? And again, the 3 step approach is simple. Its got to be high margin business, number 2 there must be enough of them out there, and number 3 you must be able to provide that product or service at a very high quality.
Alright, so today not only you are going to get down exactly what business you are in, but you are also going to identify exactly who your ideal client is. And finally, number 3. How do you make sure you don’t get Blockbustered?
Let’s Look at What Happened to Blockbuster
So let’s review what happened to Blockbuster. You see, Blockbuster Video was this incredible business that was growing like crazy. In fact, they used to have these banners they used to put up when they were opening new stores. Do you remember them? They used to hang all over town. And they used to say here we grow again.
Can you imagine a company that used to hang signs like that in the year 2000, bankrupted by the year 2014? It’s amazing to think about that because they went from this great company.
How did it happen? Here’s how it happened – They forgot what broader business they were in. So the trick is this if you don’t understand what broad business you are in, this by the way exactly the opposite of what I told you to do in step one. I told you to find out exactly what business you are in. But now I am telling you to understand what broader business you are in. And they go hand to hand.
Why? Because I want you to have a laser focus. But at the same time, I want you always to remember the broader business that you are in. So, let’s look at Blockbuster. See, Blockbuster, they were really good at knowing exactly in what business they were in.
What business were they in? They were in the business of allowing families to go to a retail store, and get videos very conveniently that they couldn’t get otherwise. That was the business they were in. They weren’t trying to be the lowest price leader. In fact, they were more expansive than most of the video stores. Right, but they were convenient.
They were everywhere, and when you went in, they always had the movies in stock. Whereas if you went to the local video shop, they used to have the things that are on a half-price or third of the price, but they weren’t in stock oftentimes. They were one of the new movies.
Here is Where Blockbuster Screwed Up
So Blockbuster became this convenient place. But here is where they screwed up. They forgot they were in a broader business of doing what? Allowing people to enjoy movies at the privacy of their home conveniently. See, if they’ve defined their business as what I just said, to conveniently allow people to enjoy movies in the privacy of their own home. See that still would have differentiated them from a movie theater.
But guess what? They wouldn’t have lost out on the entire live streaming industry, and they wouldn’t have their butts handed to them when Netflix started mailing movies to people. See, Blockbuster had the opportunity to buy Netflix, for literal pennies. I mean, for next to nothing they could have bought Netflix. But they were never scared of them. Why? Because they’ve said, that’s not the industry they were in. We are not worried about Netflix.
I mean, who is going to want to mail their movies to themselves? Well, guess what? A lot of people. And when a streaming video came out, Blockbuster didn’t think Oh we should be the leader in streaming video. Because what we do, we allow people to watch movies conveniently in the privacy of their own home.
They were stuck in this retail model. And by the time they tried to turn around, by the way, and the end they did try to turn around, and they came up with a feature with mailed movies to you, and they tried streaming all that stuff, and it just didn’t work. Because it was too late. Why?
What Broad Business Are You In?
Because they didn’t understand the broad business they were in. So I ask you now, what broad business are you in? So if your little niche, something happens to it, something changes in the world or in your business, how are you going to be able to make sure you still thrive? So ask yourself that question, and find out what broad business you are in. So here are your three things for the day, and we are going to say goodbye, and I am going to be back here with you very soon with another episode.
Final Thoughts on Identifying Your Niche and Ideal Client
What you need to do, number one, find out what business you are in, number two who is your ideal client, and number three what is the broad business that you are in, so you don’t end up like Blockbuster. Get those three figured out, and I want to help grow massively in your business.
In these next few episodes, I’ve got some incredible business tools I am going to share with you, but remember, the number one important asset of any business is you, the business owner and the entrepreneur. So we’ve got to make sure that you are in tip-top shape. So I am going to help you with fitness, with nutrition, with all sorts of thing in your life. Because I want you to be at your best, so your business can thrive.
Alright, get out there, and remember as always, the most important message I can leave you with, is lead with your heart. Join me next time as I talk about a topic that is going to take your business and your life to levels you never thought possible. It’s a concept called modeling. Modeling yourself after the best people in the world, and I am going to teach you exactly how to do it. Thanks for listening to Titanium life radio with Arman Sadeghi. Here on the Apollo Podcast network. For more information, or to subscribe to this podcast, visit titaniumsuccess.com/podcast.