The 5 Steps to Create a Hugely Successful & Hugely Profitable Business, Guaranteed

[Eckhart Aurelius Hughes]

If you haven't already, you can sign up to be personally mentored by Scott "Eckhart Aurelius" Hughes at this link.



For simplicity, in the post below I'm going to use the word 'product' to refer to both products and services.

That is especially important to note because there is still a lot of service involved with the sale of tangible physical items.


Step 1 -- Develop an amazingly great product, that is the absolute best product available to at least one specific target niche audience

Keep in mind your 'product' is not merely what you most tangibly sell, but also it includes everything that is involved in that and comes with it. For example, if you own an online toothbrush store that sells toothbrushes. There is a lot more to what your customers are buying and what you are providing than toothbrushes. In other words, your product isn't merely toothbrushes, but rather much more. It includes the checkout experience, the shipping, the box the toothbrush comes in, the special offers and rights that you sell with toothbrush such as maybe a satisfaction guarantee or warranty that it won't break. For example, even if the physical toothbrush is the same, if one company is selling it for $10 and the other is selling it for $11, then they really have different products in a sense.

Generally, developing an amazingly great product requires deciding on a very specific niche market and very specific target audience.

One person's trash is another person's treasure. Generally, nothing is the best to everyone. The more you look for mass appeal you end up falling back to mediocrity. You cannot create that everyone agrees is best, but you can make something that everyone agrees is not the worst. But that's just something mediocre, and nobody wants that.

Step 1 is NOT create a mediocre product. Step 1 is NOT create a product that everyone (or almost everyone) agrees is not the worst.

In business, very good is not good enough. In business, very good is bad. In business, you need to be the best. A customer is not going to choose the second best option. They are going choose the option that is the absolute #1 best for them in their opinion. Keep in mind, best doesn't mean best ignoring price because price and value are part of what makes one option or product or business or store better or worse in a customers. A lower cost toothbrush is better than a higher cost toothbrush if the two toothbrushes are the same in all other respects.

In business, if you are second to best, you are awful. In business, if you're not the absolute #1 best, then you are equal to the absolute worst.

You need to product that some group of people or demographic or such tend to see as being the absolute #1 best product for them based on their personal preferences and priorities. The price and bang for the buck is often a big part of what makes a product great, at least in the eyes of many buyers. Regardless, nobody goes with their second best option. They always go with their best option. In business, if you are not the best, you are effectively the worst.


Step 2 -- Confirm your product is an amazingly great product that is the absolute best option for the people in to specific target niche audience

When considering the competition, keep in mind, you aren't just competing with other businesses and sellers, but you are also competing with any other way a person could get what they would want from your product without actually buying it. For example if you are a housekeeper selling an expensive housekeeping service, you aren't just competing against other housekeepers. Instead, one of the big points of competition is the option of a person just cleaning their own house.

In any case, when you think of your average target customer (e.g. me), ask yourself these questions:

1. Can that person get a similar product or result of even better quality at an even lower price from a different person or business or using a different method? (If the answer to this is yes, then that is typically the worst case scenario since it means you are getting beat on both price and quality. So if you answer yes to this question, don't even go onto the next questions; instead, just give up and go back to the drawing board.)

2. Can that person get a similar product of similar quality for a lower price from a different person or business? (If your answer is yes, then you have been beat on price, so give up and go back to the drawing board; You have have not yet completed Step 1.)

3. Can that person get an even better product than yours for a similar price than you sell yours? (If your answer is yes, then you have been beat on quality, so give up and go back to the drawing board; You have have not yet completed Step 1.)

4. How many people are already in the market for what you are selling? (For example, if you wanted to move and were selling your house, then this number would be the number of home buyers who are activity looking at houses to buy in your neighborhood.)

5. Do you realistically and reasonably think you can convince a significant number of people who aren't even in the market for what you are selling to enter the market and (potentially) buy it from you. For instance, this would be like you are selling home, so you start going door-to-door attempting to convince people to move who aren't even planning on moving and aren't looking to buy a house, all with the eventual goal of convincing them to buy and move into your house after you convince them to move and buy a house at all.

6. If the answer to #5 is yes, how many people do you think are in that category. In other words, for example, if you hypothetically could make unlimited copies of yourself, how many people who aren't even in the market for what you are selling to enter the market.

With questions 4-6, it's really just about figuring out what the size of your target market is. Once you have figured that out, you can run a small, highly targeted advertising campaign to that target market to see how well your product does.

For small businesses or new start-ups, typically at this stage you would only do unpaid advertising. In other words, you would invest time, not money, on promoting your product to your target audience. A common way to do this is to simply go door-to-door in a neighborhood where the demographics match your target audience at a time when people in your target audience would most likely be home. You can also go to highly relevant small online groups to advertise your product.

Typically, you would start by pricing your product at $0. You would offer it to people to simply in exchange for their honest feedback. If you can't sell it for $0, you won't be able to sell it for more.

Then, if it sells well at $0 and you get great reviews from people who **say** they would have been happy to pay for it, you can increase the price very gradually and continue to run very small tests.

Again, if you are a small business you generally don't even want to pay for advertising at this stage. That's especially because at this stage you are usually already selling at a loss even without any spending on advertising and even without considering the value of your time.

You want a loss at this stage. The only you wouldn't get or would minimize your loss at this stage would be if nobody wants the free or highly discounted (below cost) version of your product, in which case you wouldn't need to incur the cost (i.e. losses) of providing the free product/service to them at a loss.

Since you are intentionally selling at a loss during this stage, you typically don't want to spend money on advertising, because then you would not only lose the money you spend on advertising but you would lose even more if the advertising worked. You don't want to sell a lot at this stage. Instead, it's meant to be a very small scale test of the market.

Once you have tested the market and are absolutely sure you have completed step 1 (i.e. once you are absolutely sure you have an amazingly great product that is the absolute best option for people in your target audience, then move on to the next step, which is Step 3.


Step 3 -- Advertise the amazingly great product to your target audience

This step is relatively simple: Make as many people who are in your target audience aware of the product. You do not need to lie to them. You do not need to trick. You do no need to coerce them. You do not to put a gun to their head. You do not need to manipulate them. You do not need to pressure them. You do not need to really even persuade them, per se. To sell your amazing great product that is perfect for them and blatantly the best that is available to them, you simply just need to simply make them aware of your product.

Advertising a great product is like pushing a big heavy boulder off the pointy tipity top of a big steep hill. At most, it just takes a little nudge.

In contrast, great advertising only makes a business with a bad product go out of business faster.

With this step, it's basically like throwing gasoline on an already burning fire. If you don't become hugely successful in your business very quickly,

In a very rough way of speaking, if your biggest problem at this stage is not that your business is growing too fast, then you either skipped Step 1 or Step 2 or you did one or both of those steps incorrectly.



Step 4 -- Take the appropriate measures to prevent your business from growing too fast

This can manifest in different ways. It could mean marking certain items on your online store as sold out. It could mean setting a hard limit how many new franchise applications you will accept each month.

One reason a lot of business end up going out of business at this stage is that they start putting most of their time, money, energy, and attention into new side projects or new product lines in their overall business rather. For example, consider how much Meta and Zugerberg lost on their efforts and expense on VR and the Metaverse. Luckily for them, they could afford to sustain those huge losses without going completely out of business, but many businesses that make that kind of decision go out of business as a result.



Step 5 -- Scale exponentially

While you don't want to grow too fast that you collapse (hence Step 4), once you have a healthy growth rate and proper guardrails in place to prevent lethal growth-related problems (e.g. a website that can withstand bursts of traffic and queues orders and requests properly in a way that overload a system), then you can grow exponentially.

Increasing capacity, whether linearly or exponentially, comes with the same caveat as advertising.

Just as great advertising only makes a bad product fail faster, so too is the same true for increasing capacity.

For example, if you have a restaurant with 100 tables that is never more than 50% full and never has a wait, then opening a second copy of the restaurant across town won't increase sales; it will just decrease your capacity usage. You will go from 50% capacity usage to 25%. Your profit margins will just get cut in half.

Steps 3 through 5 are easy and obvious. The mistake most new business make is rushing past steps 1 and 2. They start worrying about advertising and scaling up and growing when they still don't have a great product that is selling out because it is in such a high demand and such a great product with such amazing word of mouth.

Advertising or scaling is the best way to kill most new businesses and most new products.

They are symptoms of success in business, not really causes of the success.

But people see that hugely successful business are advertising and scaling, and they mistake correlation with causation. They mistake the symptoms of success as the cause. They spend time and money investing on the symptoms of business success and thereby put themselves out of business.

Scaling an underperforming business causes to it to go out of business even faster.

Advertising a bad business (i.e. one that sells a bad product) causes it to go out of business even faster.

The most common thing that puts business out of business is that the business owner or manger chooses to engage in step 3 or step 5. Choosing to do step 3 or step 5 is typically the business analogue of putting a gun to your head and pulling the trigger.

Most businesses go out of business because they commit suicide. And they commit suicide by doing step 3 or step 5, without having first truly done step 1 and step 2.

If and when you do ever make it to step 3 or 5, make sure you do it with the same care and extreme hesitation with which would you hold and handle a literal loaded gun.

Step 3 and Step 5 are the business equivalent of pulling the trigger of a loaded gun, a gun that is typically pointed at yourself.

Step 1 and step 2 are the business equivalent of pointing that gun away from yourself and then double-checking to make sure the gun is pointing away from yourself. Except, in this case, yourself is the business, and jumping ahead to step 3 or 5 is you killing your business.


With love,
Eckhart Aurelius Hughes
a.k.a. Scott


---
In addition to having authored his book, In It Together, Eckhart Aurelius Hughes (a.k.a. Scott) runs a mentoring program, with a free option, that guarantees success. Success is guaranteed for anyone who follows the program.

[Sushan]

This is a fantastic blueprint for business success! The emphasis on perfecting your product and validating its market fit before scaling or advertising is crucial. Growth should be a result of quality and demand, not the other way around. Patience and strategic planning are key. Thanks for sharing these valuable insights!