In over 15 years of advising start-ups and small businesses, one thing stands out: how ill-prepared for self-employment are the many professionals whose careers at some stage are likely to take them into a self-employed role. I have seen this among accountants, lawyers, engineers, doctors and vets.
Our professional pre- and post-qualification training focuses on the technical aspects of the work, with occasional acknowledgement of management or soft skills development. But little is done to prepare the professional for life working as a professional, on their own, in their own business.
So, my short session this morning first will cover some of the most important aspects for someone considering self-employment and then will apply them to what I see as an emerging opportunity in the companion animal practice space.
The Rules of Business
Let me start with some points from one of my regular presentations, entitled 'The Rules of Business'. Key questions for anyone thinking of starting a business are:
What are your customers really buying when they buy your product or service?
Who are they?
Why do they buy it from you?
What price will they pay?
The answers to the first three questions provide the answer to the fourth.
It is critical to understand what the customer thinks they are buying--which is often very different from the physical product or actual service that they receive in exchange for their money.
For example, if this evening, after the seminar sessions have ended, you decide that you like a drink, you have a number of choices: you could visit the Four Seasons Hotel nearby, you could ask one of the organising team for their recommendation of a good 'local' pub, or you could even (perish the thought!) 'brownbag it'. You might obtain the same amount of alcoholic stimulus in each choice, but your drinking experience will be very different. Your choice does not depend on the alcohol--since that's common to all three choices--it depends on the differences between the quiet calm of the Four Seasons bar, the noisy bustle of a 'local' and the solitary focus of 'brown bagging'.
Which you choose depends on what you think you are buying, on what you think you want at that moment in time. It also depends on who you are. Some of you may find hotel bars impersonal and off-putting; others may have difficulty in obtaining guidance on a good 'local', or in following your guide's directions; few of you are likely to resort to 'brown bagging'. So, who you are is an important question for the supplier to understand.
And last, why you buy is also important. If quiet time for yourself, to reflect on the day, away from a busy conference schedule, is what you want, you'll be drawn to the Four Seasons or a similar environment; if company, the opportunity to network among your peers, or the chance to meet the 'real Irish', is what you are seeking, a 'local' is what you're looking for; and someone who has just had some personal bad news most likely will choose the solitary option.
These three considerations impact, and decide, the price that you are likely to pay. The Four Seasons is more expensive than a 'local' pub, which in turn is more expensive than an off-licence. Same drink, same quantity, different presentation, different environment, different experience--all add up to a different price for each.
And one of our rules of business is that 'you cannot charge more for your product or service than the customer thinks it is worth'. Obvious, but often overlooked. And while the rule usually limits how much you can charge, sometimes, when you truly understand the customer through the three earlier questions, it allows you to charge a great deal more than may be immediately apparent. Therein lies true profit potential.
Now let's look at something else--strategy, again an unfamiliar concept for most professionals contemplating self-employment but critical nonetheless.
For a small business, strategy pervades everything it does--from opening hours, to location, to choice of staff, products and pricing--all combine to create a strategy whether the owner realises it or not! Understanding this is the start to being in control of your business's strategy; taking control puts you in charge.
Although there's more to strategy than just the three aspects that I plan to cover, I focus on these because I believe them to be the most relevant. They are:
Vision is the answer to the 'Where do we want to go / be?' question. It's the core of strategy and helps avoid what I call the 'Sunday driver' strategy, where you have no idea where your business is going, or why. Without Vision, your business simply will drift.
Positioning is the obverse of Vision: if Vision is where you see your business going, Positioning is where your customers and the market in general see that your business is now. Start-ups have a real problem here, since they lack any track-record.
Positioning is the equivalent of putting on a suit and tie when going to the bank to ask for a loan--you are trying to manage the bank manager's perceptions, to influence him / her positively, so that they give you the loan you want.
You ignore positioning--the market's perception of your business--at your peril, as a number of car manufacturers have found to their cost, when they produced perfectly good cars but from a positioning unacceptable to the market. Volkswagen's Phaeton, which only achieved 242 sales in its first year on the market, against a sales target of 7,000 units, is a case in point.
A key ingredient of positioning is branding. Fortune magazine defines branding as 'something that makes people pay more for your product, even though it is the same as a competitor's'. We see examples of successful branding everywhere. How can Starbuck's charge more for a coffee than the 'greasy spoon' café across the road? Because Starbuck's has carefully developed its brand, and its positioning, by answering the questions from our 'Rules of Business' earlier.
Companion Animal Practice Applications
Combining all this and bringing it closer to home, let's look at an opportunity in the companion animal practice space.
Most companion animal practices are busy places: dealing with the routine of neutering cats and dogs, curing the ailments of hamsters and gerbils and handling all the other minutiae of companion animal life.
But focus on that word 'companion'. Think of the changes that are happening in society. Think of the increase in wealth, here in Ireland and globally. Think of the increase in city living. Think of the reduction in family sizes, with many households, especially those created by later, second or even third, marriages, having no children at all. Think of the isolation of many people from other meaningful human contact outside of their work.
Then think again about that word 'companion' and the potential it offers, if harnessed properly.
If a dog or cat or other small animal is truly a 'companion', not just a pet, it can--and, very often, is--ascribed with human, or near-human, characteristics. The absence of children in a house, the absence of visitors or other outside contact, the availability of sufficient money to indulge whims, all potentially lead to a re-definition or re-evaluation of that word 'companion'. And, most especially, they lead to a re-appraisal of the value of the market.
If customers no longer are buying veterinary services for a pet but instead are buying care for a valued companion, who (note the 'who', not 'which') is an essential and integral part of their lives, on whom they are able and prepared to lavish a significant portion of their wealth, in pursuit of their own personal self-satisfaction, there's not only a huge upside in terms of what a veterinary practice can charge, but a whole new industry.
Combine 'What are they buying?', '"Who are they?', 'Why do they buy?' with Vision, Positioning and Branding and what do you get? The potential to build a whole new business--perhaps even the empire-building of the title of this talk.
Fanciful nonsense? Perhaps--but perhaps not.
Ten years ago, probably yes, it would have been fanciful nonsense. Now, even from my own limited experience in the companion animal world, I believe that the time is right, or very close at hand, for something like this to work.
I have worked with the emerging Irish dog-treat bakers, MoChara (http://www.mochara.ie/), whose market research showed that significant numbers of Irish dog-owners were willing to spend € 100+ per month on dog treats--not dog food, just treats. And although Irish publisher John Ryan closed his magazines 'New York Dog' and 'Hollywood Dog' last year, I believe that the record will show that he was ahead of his time--it's interesting that Ryan's URL, http://www.nydog.com/, was quickly picked up by another entrepreneur.
So with a little thought, some market research (essential) and planning, empires in the companion animal practice space are a definite possibility! But you need to understand your customer and what they are really buying.