Things to note before starting a business. EP 1

Mar 7, 2024


Things to note before starting a business. EP 1

A Transaction is an exchange of value between two or more parties. If I have something you want and you have something I want, we’d both be better off if we agreed to trade.

The Transaction is the defining moment of every business. Sales are the only point in the business cycle where resources flow into the business, which makes completing Transactions critically important.

Businesses survive by bringing in more money than they spend, and there’s no way to do that without completing Transactions.

You can only transact with things that are Economically Valuable. If you don’t have anything your prospective customers want, they won’t buy from you. This may seem obvious, but it’s amazing how many prospective business people enter the market without something the market wants.

That’s why developing and testing a Minimum Economically Viable Offer (MEVO) is so important: it’s the best way to determine whether or not you’ve created something valuable enough to sell before you invest your life savings.

Here's why a MEVO is crucial:

1.     Reduced risk: By testing a simplified version, you minimize the financial risk associated with launching a full-fledged product or service.

2.     Early validation: MEVOs provide real-world customer feedback, helping you refine your offering and ensure it resonates with your target market.

3.     Faster iteration: With valuable insights in hand, you can adapt and improve your offering quickly, saving time and resources in the long run.

When you’re starting a new business, the objective is to get to the point where you make your first profitable Transaction as quickly as you possibly can, because that’s the point where you transition from being a project to being a business.