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Creating Winning Formulas For Business
Still discussing how business scale-up is a challenge for IKM or local footwear brands to survive and even overtake in the corners of this pandemic. Many questions must arise; the shoe business you currently live in is difficult to level up. Yes, that's a natural question, so in our previous discussion about mindset, it's important for you how to practice positive responses to changes that affect your business. That's where the mindset. Every business is unique. Therefore, for scale-up, each IKM or local footwear brand must be able to find its way. This is where it is important to find and mix your ingredients to be a winner.
Everyone already knows that SMEs have proven durability. In the 1997 economic crisis, Indonesia was one of them saved by the strength of the IKM in facing the economic storm. In 2008, the global financial crisis also impacted the Indonesian economy. Once again, SMEs can still positively contribute to the national economy. This phenomenon proves that there is a unique formula that SMEs have to be able to continue to survive and win in change.
The BPS study in 2020 shows that the three main constraints for SMEs in Indonesia are 29.3% in the capital aspect, 21.1% in the marketing aspect, and 20.7% in the raw material problem. This data is interesting if it is reviewed more deeply. The next question arises: Is it true that SMEs' main obstacle is capital? From the financial and economic crises in 1997 and 2008, it is evident that large and medium-sized companies were most affected by the crisis. This means that companies with bank credit and financial institutions are the most vulnerable to bankruptcy.
Let's compare it with the findings of Sabry Suby - Leading Australian Internet Market in 2017, that indeed the only reason a business falls is "lack of capital", in other words, lack of sales performance and lack of income, while 80% of wars in business are about sales and marketing. . So if the competition in sales and marketing can be won, the business problem is solved.
Before compiling a winning business formula, what can we learn from the two data above? That capital is indeed the main obstacle for SMEs, especially footwear, but the fact behind the capital is the accumulation of IKM problems such as sales, raw materials, labor, and other technical obstacles that trigger the unresolved IKM problems by government policies. So what is the main problem for our SMEs today? Information asymmetry. Well, we will discuss this information asymmetry problem in the following article.
So what should you prepare in compiling a winning formula?. The winning formula is about how smart you are in responding to change. When your current position is a start-up that will scale up, start doing smart ups in formulating a formula. In this pandemic situation, you make a new and more affordable sandal product. Say the offer is "Buy leather sandals get one month free maintenance" This offer can be said as a formula, when you offer it to someone else, then he buys. Offered to others, he also bought and offered to many people, the more people buy. So we call the offer a formula. So the condition is that the winning formula is repeatable, then this powerful recipe will make your sales sell well.
In Scale Up's book (Afrig Waseso and Alfan Robbani) there are 4 steps to developing a winning formula (1) finding a winning audience; (2) concocting winning products; (3) get a winning promotion; (4) create a winning conversation process. These steps can also be referred to as features/requirements that your business formula is repeatable.
In their research by Afrig Waseso and Alfan Robbani, from 12 cases of business scale up there are 20 advantages of new products; there must be 20% of products that have the 4 features/conditions mentioned above that cause the market to want to buy your product. Of your 20 types of customers, there must be 20% of the types of customers who buy the most. And of the 20 promotional themes created, there must be 20% of the promotional themes went viral and contributed significantly to sales. According to Afrig Waseso and Alfan Robbani, "In essence, there are some things that if we do the effect is much more significant than others. The essence of the core question What exactly is the most influential?".
So, concocting your winning business formula must be based on in-depth data and research. With enough data and information, you can make a delicious and well-selling concoction menu as a chef in the kitchen. Good luck.
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