Via LinkedIn : Entrepreneurs the world over are masters at perfecting their business models in an ever-changing competitive environment, but sometimes a developing business needs to focus on some of the more mundane areas of operations in order for it to remain the lean, mean fighting machine of the early days.
Every now and again, start-ups need a spring clean.
There are many areas that might benefit from a polish, a dusting or even a thorough scrubbing. In this blog, I would like to borrow Osterwalder’s 9-piece business canvas to segment what activity may be required in each critical area:
Key Partners: Often a start-up’s success is closely linked to the value-add of its partners. However, success on one side does not always equate to success on the other side. Entrepreneurs need to ensure that they are working with the best-fit companies at every stage of the way. Nostalgia for the early days shouldn’t hold you back if your partner can’t handle the increased demands.
Key Activities: The priority tasks for year one of a business will be different to year two and year three. Any business with a rigid operating model will be shackled and unable to fulfil its potential. Getting an external view on how you might operate more effectively is crucial – do it at regular intervals and don’t give in to believing that you have the perfect model. It won’t be perfect for long.
Key Resources: Are you feeding your business the right diet to help it to grow? Have you got the right employees in place? Do you need to upgrade your facilities or give your sales force a company car? Is it about time you invested in some tech to improve company communications? Constant investment in the right areas will keep you ahead of the curve.
Cost Structure: This is a big one and it will vary hugely from industry to industry, but you can be sure of one thing: the fixed and variable costs involved in running a start-up will rarely be the same from year to year. Look to the past to understand what created value and look forward to predict what might bring you the desired result. Be clinical in eradicating unnecessary spending.
Value Proposition: The features and benefits of your product will develop along many potential avenues. The market may dictate certain changes, you may need to react to competitors or you may need to pivot your business into a more profitable niche. Never assume that you hold the “perfect hand” – there are always ways and means of improving on your offering.
Customer Relationships: How you create and maintain customer relationships is the litmus test of any successful business. Finding new customers will become ever more important as the business develops scale, but keeping the loyal ones is the real key to success. How do you ensure that you grow with them?
Channels: Delivering an ever more complex product or service needs efficient distribution and communication. Technology and social media are offering some cutting edge solutions in this area – are you sure that your business is making the most of them? Are your channels keeping up with the growth?
Customer Segments: Not enough businesses evaluate their customer base on a regular enough basis. They do heaps of market research initially, but customer habits change and companies can easily lose sight of their core customer in the haste to grow.
Revenue Streams: Entrepreneurs are notorious for continually seeking new revenue streams to diversify the business, but sometimes the temptation to focus on the “new” can cause the neglect of the “old.” Make sure that you are making the most of each area of your business, no matter how long you have been active in the market.
Evaluating some of these areas isn’t seen as a priority because there are bigger perceived “wins” to prioritize. However, without a regular spring clean, there is always the threat of falling out of touch with why you started the business in the first place. Entrepreneurial housekeeping is always vital for the long-term health of any business.
I am sure that we all know a few companies in need of a spring clean.
Please share your thoughts in the comments section below as I learn just as much from you as you do from me.