I am being asked with, unsurprisingly, increasing frequency what businesses will do best in the current tough economic climate.
In my view, a focus on delivering value (as understood by the customer!) is key. This is universally true in good times and bad. However, failure to deliver this in good times results in missed opportunity, whereas failure to deliver it in bad times results in, well...failure of the business.
So, to focus specifically on the current climate, a consumer business will - ideally - do one or both of the following for their clients:
1) Enhance employability
2) Reduce stress
Already, we see training and business education doing well, and gyms, yoga classes and family counselling services booming.
In B2B, services and products that increase efficiency or reduce cost (especially fixed cost), or increase sales or profitability for their clients are likely to do well.
None of this is "field left" - these are good areas to be in at any time, but the current crunch will make everyone re-examine where their dollars are going, and look for solid value. Just remember, the vast majority of people have not experienced a drop in income, so the money is still out there - you just have to work out what represents value in your industry or customer segment.
Having said that, there are some long-term trends that are worth looking at, and convenience and "green" do stand out.
I hope this gives you something to think about. Do post comments or contact me if you would like to follow any of this up.
Thursday, March 19, 2009
Monday, January 12, 2009
Business Startup Success Factors
If there is one thing I am always asked, it's "what does it take to succeed?" Well, there are lots of views on this, and a surprising number of people have "magic bullet" answers. Of one thing I am sure: there is no single factor. I have summarised what I have learned below. I am sure you will have a view on this, but bear in mind that I have focused on the universal and necessary. You may succeed without 100% of some or even any of these, but if you ignore any completely you are unlikely to succeed at all.
1. Be Brave: If you actually take the first step into starting a business, you have already demonstrated that you are in the top 10% in terms of courage. Then you need the day-to-day grit to endure. This can be difficult alone, so if you do not have a strong support structure (family, friends or advisors), consider whether you should be part of a partnership.
2. Have Clarity: You must be absolutely clear what your business is and what it is not. Write this down and review it several times – it is surprising how vague and unstructured many startup plans are! Try to cover every aspect of the business, at least in outline. Key areas to cover are: values, vision, mission, product strategy and goals, both numerical and qualitative. The mission statement should be clear and inspiring enough to drive the business forward. The other side of clarity is not deluding yourself, and I would put strong financial management under this heading!
3. Deliver: All business tasks need to be performed with all your energy to deliver quality products and services that will be valued by your customers. Therefore, choose something you are passionate about, can be in the top 10% in terms of quality and can deliver a profitable product or service. Delivery is also about your team, so pay attention to recruitment, motivation and retention, right from the beginning.
4. Overcome Obstacles: There will always be constraints and roadblocks. You need to develop the ability to overcome or work around those that will seriously affect the development of your business. Typically, the entrepreneur is the source of most issues, despite the tendency to blame external forces. This means you must understand your own capabilities and weaknesses very well. External advice can help here.
5. Free your Creativity: Everyone has the ability to produce creative solutions, and it really is true that “necessity is the mother of invention”. In business, creativity needs to be focused on developing superior value, finding simpler, faster, lower-cost ways of delivering that value and on solving the inevitable problems and obstacles. Many people say that successful entrepreneurs focus on the solution rather than the problem. The reasons this is true include the more positive mindset it creates, and the increased attractiveness of working with this type of personality.
6. Be Focused: Be single-mindedly focused on the most important thing at that time, and stay focused until it is delivered. This is the single greatest success factor. If you have difficulty deciding what to focus on, you may find it easier to decide what not to focus on.
7. Keep Going: Successful entrepreneurs keep going. This does not mean doggedly following a single track regardless of results. The successful entrepreneur is always trying new things and abandoning those that don’t work, retaining the learnings in the process. In fact, most achieve success in areas they did not plan for at launch. Finding the right balance between persistence and flexibility is the art of the entrepreneur.
1. Be Brave: If you actually take the first step into starting a business, you have already demonstrated that you are in the top 10% in terms of courage. Then you need the day-to-day grit to endure. This can be difficult alone, so if you do not have a strong support structure (family, friends or advisors), consider whether you should be part of a partnership.
2. Have Clarity: You must be absolutely clear what your business is and what it is not. Write this down and review it several times – it is surprising how vague and unstructured many startup plans are! Try to cover every aspect of the business, at least in outline. Key areas to cover are: values, vision, mission, product strategy and goals, both numerical and qualitative. The mission statement should be clear and inspiring enough to drive the business forward. The other side of clarity is not deluding yourself, and I would put strong financial management under this heading!
3. Deliver: All business tasks need to be performed with all your energy to deliver quality products and services that will be valued by your customers. Therefore, choose something you are passionate about, can be in the top 10% in terms of quality and can deliver a profitable product or service. Delivery is also about your team, so pay attention to recruitment, motivation and retention, right from the beginning.
4. Overcome Obstacles: There will always be constraints and roadblocks. You need to develop the ability to overcome or work around those that will seriously affect the development of your business. Typically, the entrepreneur is the source of most issues, despite the tendency to blame external forces. This means you must understand your own capabilities and weaknesses very well. External advice can help here.
5. Free your Creativity: Everyone has the ability to produce creative solutions, and it really is true that “necessity is the mother of invention”. In business, creativity needs to be focused on developing superior value, finding simpler, faster, lower-cost ways of delivering that value and on solving the inevitable problems and obstacles. Many people say that successful entrepreneurs focus on the solution rather than the problem. The reasons this is true include the more positive mindset it creates, and the increased attractiveness of working with this type of personality.
6. Be Focused: Be single-mindedly focused on the most important thing at that time, and stay focused until it is delivered. This is the single greatest success factor. If you have difficulty deciding what to focus on, you may find it easier to decide what not to focus on.
7. Keep Going: Successful entrepreneurs keep going. This does not mean doggedly following a single track regardless of results. The successful entrepreneur is always trying new things and abandoning those that don’t work, retaining the learnings in the process. In fact, most achieve success in areas they did not plan for at launch. Finding the right balance between persistence and flexibility is the art of the entrepreneur.
Friday, January 2, 2009
Planning to Succeed
Registering a business may be relatively straightforward, but managing its development in a consistent, sustainable manner is extremely challenging. In particular, there are human and physical infrastructure issues that entrepreneurs have to grapple with – quite apart from actually building the business.
For this reason, planning is essential.
For effective planning, consider the following questions:
Business Model:
What business are we in?
Are we primarily a product or service company?
Where will revenue come from and how?
Financing:
How much initial funding will we need?
Where will this come from?
In the longer term, what should the balance be between debt and equity?
Controlling Costs:
What is the right balance between fixed and variable costs?
How can we reduce costs without undermining my offering?
Do I really need my own premises?
Finding reliable Advisors:
Who do I and my partners know?
Can my contacts recommend?
How can we research suitability?
Access to Networks:
What networking events will help?
Should I join associations/interest groups?
Building the Team:
Should I employ staff or partner/contract/outsource?
What are the key positions I must have in-house?
How do I find people?
What terms do I offer?
Should I offer equity?
For this reason, planning is essential.
For effective planning, consider the following questions:
Business Model:
What business are we in?
Are we primarily a product or service company?
Where will revenue come from and how?
Financing:
How much initial funding will we need?
Where will this come from?
In the longer term, what should the balance be between debt and equity?
Controlling Costs:
What is the right balance between fixed and variable costs?
How can we reduce costs without undermining my offering?
Do I really need my own premises?
Finding reliable Advisors:
Who do I and my partners know?
Can my contacts recommend?
How can we research suitability?
Access to Networks:
What networking events will help?
Should I join associations/interest groups?
Building the Team:
Should I employ staff or partner/contract/outsource?
What are the key positions I must have in-house?
How do I find people?
What terms do I offer?
Should I offer equity?
Wednesday, December 31, 2008
My Trend Predictions for 2009
To start off my blog, I'm putting my neck firmly on the block and making some business trend predictions for 2009. In no particular order, here are my thoughts on what the hot business trends will be in 2009:
Change of Colour
Green is the new…well, green. Anything environmentally-friendly has some chance of making the big time in 2009…and this applies to just about any business. So think about the business you are in – can you find a green angle or a green offshoot? Especially hot areas (pun intended) are: organics, clean energy, carbon services, water conservation and recycling.
Frugality
After decades of assuming that everyone is trading up, comes the era of trading down, and don’t assume that this is all forced. There are plenty of people fed up with keeping up with the Joneses, Tans and Kumars, and taking the downturn as permission to migrate to simpler life.
Wellness
Plastic surgery, health supplements, gyms and yoga may be the obvious beneficiaries here, but entrepreneurs should also look at the broader issues of mental well-being and self-image. This could be as sophisticated as psychology or as simple as a good meal with friends.
Networking
This is not exactly new, but expect this to be the year that niche networks really take off – online and in real and second life. These may not be stand-alone networks, as the success of niche networks on, for example, Facebook demonstrate.
Technology
Who knows what technologies will emerge in 2009 to blindside entire industries? Best guesses include seriously improved batteries offering longer life and therefore more useable devices, wholesale switch to LED and other energy-saving technologies with the same consequences, breakthroughs in solar and desalination and the beginnings of semantic search.
Online Everywhere
The ubiquitous web, through mobile devices and wireless Hot Spots, will generate business opportunities in unexpected ways. Will this be the year that location-based services really start to make money?
Niche
Against the above trends, there will be strong niche opportunities, based on shared interests, cultural revival or hedonism. Expect outrageously extravagant gas-guzzling sports cars, experiential travel, extreme everything and packaged counter-culture.
I hope this has given you some thoughts about your own business ideas - current or planned. As a significant number of people will leave employment for the perils and joys of the entrepreneurial life, this is of significance. I will you an exiting and prosperous 2009.
Change of Colour
Green is the new…well, green. Anything environmentally-friendly has some chance of making the big time in 2009…and this applies to just about any business. So think about the business you are in – can you find a green angle or a green offshoot? Especially hot areas (pun intended) are: organics, clean energy, carbon services, water conservation and recycling.
Frugality
After decades of assuming that everyone is trading up, comes the era of trading down, and don’t assume that this is all forced. There are plenty of people fed up with keeping up with the Joneses, Tans and Kumars, and taking the downturn as permission to migrate to simpler life.
Wellness
Plastic surgery, health supplements, gyms and yoga may be the obvious beneficiaries here, but entrepreneurs should also look at the broader issues of mental well-being and self-image. This could be as sophisticated as psychology or as simple as a good meal with friends.
Networking
This is not exactly new, but expect this to be the year that niche networks really take off – online and in real and second life. These may not be stand-alone networks, as the success of niche networks on, for example, Facebook demonstrate.
Technology
Who knows what technologies will emerge in 2009 to blindside entire industries? Best guesses include seriously improved batteries offering longer life and therefore more useable devices, wholesale switch to LED and other energy-saving technologies with the same consequences, breakthroughs in solar and desalination and the beginnings of semantic search.
Online Everywhere
The ubiquitous web, through mobile devices and wireless Hot Spots, will generate business opportunities in unexpected ways. Will this be the year that location-based services really start to make money?
Niche
Against the above trends, there will be strong niche opportunities, based on shared interests, cultural revival or hedonism. Expect outrageously extravagant gas-guzzling sports cars, experiential travel, extreme everything and packaged counter-culture.
I hope this has given you some thoughts about your own business ideas - current or planned. As a significant number of people will leave employment for the perils and joys of the entrepreneurial life, this is of significance. I will you an exiting and prosperous 2009.
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