When it comes to success in business, there’s a chapter people rarely consider. The art of the exit strategy is the part of the business journey which stands entrepreneurs apart from the crowd.
Some would argue that you’ve only been successful if you’ve exited with a return on your investment, ready to move on to the next bigger and better opportunity.
This is the third and final blog in my three-part series about how to Aim Big, Think Big and Act Big. These are the three essential steps to guaranteed business growth that I spoke about in my first blog of the series.
So, how do we Act Big? I’d like to take you back to my little dog, Baxter, and his very big stick. I guess Baxter has the luxury of not needing to worry about where his big stick journey goes. To me, there’s a clear failure coming, when he realises that half a tree isn’t the best thing to decide to carry on a long walk. But, he’s living in the moment, and very happy to do so.
When it comes to business, we can’t afford to set ourselves up for failure. Which is why, oddly, one of the first questions I ask a business founder is “What happens at the end?” I’m not for a minute suggesting their business won’t continue, very successfully, for many years. But I am suggesting that they might not always be a part of it.
Unlocking the door
There are lots of choices when it comes to an exit strategy, the four most common are:
- Management Buy Out (MBO) – when an executive team combines resources to acquire some or all of the business they manage;
- Outside Sale – a straight sale to new owners;
- Merger & Acquisition (M&A) – either merging with a similarly sized company or being bought by a larger one;
- Initial Public Offering (IPO) – essentially floating on the stock market and raising capital from external investors, not as popular as it once was, following the bursting of the dot-com bubble;
There’s no ‘best’ option as the right strategy will be the one which fits your business and personal goals. It’s this framing and planning stage which should come at the start of the business journey to enable you to structure your business for ultimate success in the exit strategy you choose.
Determining the right balance between personal and business goals as well as honouring any investments needs careful planning. The key point of the strategy is to optimise the value of the business so planning from an early stage provides maximum flexibility and opportunity.
By acknowledging and actioning the need for an exit strategy, not only are we fulfilling the need to Act Big, we are giving ourselves the opportunity to grow yet more in the future as we have the chance to move on to greater challenges or more business opportunities.
This blog is the second in my latest mini-series which shares 3 essential steps to guarantee successful business growth
Last time, I wrote about Aiming Big. This time, you can find out how to Think Big and create sustainable growth for your business.
Clarity is Key
One of the secrets to business success is to ensure that your audience knows and understands what you do. By picking a market or a skillset and sticking to it, you create a much stronger brand and you can then grow your business under that brand in such a way that the goodwill you generate will extend to everything you offer.
By moving between markets or offering random services that aren’t linked together by a common skillset, you risk confusing your target market and the confused mind always says ‘no’.
Think Quality, Not Quantity
If you find you get the biggest buzz from the ‘new’, you need to hear the story of Rand Fishkin, founder and former CEO of Moz. Today, Moz is one of the most successful SEO companies in the world but that wasn’t always the case.
Fishkin describes his obsession with ‘the new’ as “one of Moz’s most consistent, most pernicious failures” under his leadership of the business. Instead of continually improving and refining his offering by focusing on what Moz was good at, the entrepreneurial founder was continually chasing the next big discovery. He wanted to repeat his original experience of finding a problem, solving it and becoming a huge success.
However, this chase led to many new product or features being launched, marketing and then promptly forgotten about. There was no support, no upgrades (both of which are essential in the tech industry), until everything came to a head with severe product failures and what Fishkin describes as “nightmarishly bad customer feedback”.
It was at this point that Moz’s growth rate plummeted from 100% year-on-year to just 20%.
A Lesson Learned
In the end it took years to turn Moz around, something which happened under new leadership. But the lesson was learned by Fishkin, who says he plans to carry it with him for the rest of his career.
In my experience, a successful business is something which needs strategic thinking. By considering why you are successful – presumably because you are good at what you do – and planning to deliver more of the same rather than diversifying or over-expanding and risking the whole business.
Next time, read more about how to grow your business successfully as I look at how to Act Big and what choices are available to business owners once they’ve found success and growth.
I’m always an advocate of planning. From the first little spark of an idea, through the approach to funding, setting up and throughout the lifetime of your business, you should plan, plan, plan.
When it comes to growing a business, it’s common for some entrepreneurs to get a little over excited. Passion and dreams can run riot, especially now they’ve seen that their idea works, the business exists at last and it’s doing well.
Perhaps oddly, growing a business is a risky time. I’m absolutely not against it in any way – one of the most common services Streamlion Consulting offers is help with growing and scaling businesses. But I do believe there’s a right and a wrong way.
My next series of blogs is going to share 3 essential steps which, if taken, can guarantee successful business growth.
The first step is to Aim Big.
And we’re back to planning. The clue to the right way to approach this is in the word “aim”. You’ll notice this is different to “fire” or “fire at will”, both of which conjure up images of a scattergun approach, a distinct lack of planning. And therein lies a common mistake. With a thriving business and proof that you’ve found your niche, it’s easy to get over-confident and start growing in every direction, simply saying ‘yes’ to every request and pleasing your customers right, left and centre.
Taking a moment, taking aim in fact, means knowing what you’re good at and offering this proven skill, perhaps in new markets, rather than reinventing yourself which often means a move away from your core skillset.
Offering a wider range of different products or services too early can destabilise the business. Think of your main offering as the core of your business. A strong and well-defined core creates a stable, steady business. Your brand will become known for this core product or service and your reviews will reflect your proficiency in this arena.
Complement your core
As well as destablising your core, suddenly offering a wide range of different products or services will also end up costing more to scale as your business continues to grow. Quality or reliability might suffer and suddenly your brand is damaged.
By aiming big – and taking a moment to plan – you can stabilise your core offering and then plan complementary growth channels which work with this core but perhaps allow you to explore different markets or areas of expertise.
Taking some time to plan a logical growth journey at this stage will pay dividends in the end as your business remains efficient and effective while also getting bigger.
Next month, I’ll be looking at the next step you can take to secure successful growth – thinking big in order to create sustainable growth.
As the reality of the financial burden of COVID dawns, there will no doubt be yet another round of cost-cutting in the business world. It has become a well-worn path – recruit and increase manpower when times are good; restructure and reduce overheads when trouble hits.
However, there is a school of thought that COVID has merely been the magnifying glass which exposed a culture of overstaffing which has been building for years. According to an article run by The Telegraph during lockdown, both the public and private sector have become addicted to overmanning, with armies of people employed in spuriously-named positions who seem to have very little on their to-do list.
However, the recovery following COVID will likely need to dig deeper than simply getting rid of excess manpower. Cuts will need to be deep and a focus will need to be given to prioritising core activities within organisations.
The outsourcing opportunity
Luckily, the other side of the crisis coin means many businesses have pivoted to offer remote services, thus potentially offering resourcing flexibility without the commitment and cost that comes with employees.
Outsourcing is nothing new. It first became a cost-saving strategy in the late 1980s and, more recently, a plethora of online platforms have emerged; Fiverr, PeoplePerHour and Outsourcely to name a few; which claim to make engaging with freelancers even quicker and simpler.
With furlough having the potential to turn into a giant time-and-motion study for the future, the future of outsourcing looks good but, as with anything you don’t deliver in house, quality can be a key concern.
Many businesses prefer to work with known and trusted consultants who will take the same care of their business as they would themselves; something that isn’t guaranteed by the digital ‘freelance farms’ mentioned earlier. In some cases, it’s impossible to know exactly who will carry out the work you send, not to mention what quality will be returned. Such bidding sites are based on a ‘cheap and cheerful’ model and, as many businesspeople know, you get what you pay for.
So, what’s the alternative?
Enter the Ecosystem
Another concept that has grown in popularity during the abnormal times of 2020, is that of a business ecosystem. Again, it’s nothing new, but the attraction of being a part of one has perhaps become more evident as smaller firms look to support one another in order to survive and, eventually, thrive. Because firms within an ecosystem work together on a regular basis, there is a trusted relationship and quality can be assured because everyone’s reputation is on the line if it is not delivered.
Streamlion has long adopted the approach of building an ecosystem within which we operate. Our natural ability to network and build relationships with clients and suppliers alike means we have a powerful list of partner and associate affiliations which enable us to offer our clients a wider range of services, whilst still ensuring the quality and satisfying experience they would get by working directly with us.
Happily, this approach enables us to continue supporting smaller businesses after arranging their funding and giving them the chance to thrive during any economic climate. Of course, it’s always sad when people are made redundant but, following a decade of growth and easy money, businesses are carrying additional costs which are not sustainable. Moving back to an outsourcing model could actually be better for the economy in the medium term, especially with our new-found flexibility and ability to run operations with less infrastructure and overhead costs than ever before.
Smaller, remote teams or individuals can be nimble when responding to the needs of their clients, thus turning work around faster and ensuring quality that comes from using an expert in their field.
At Streamlion, we pride ourselves in collaborating for success. Check out a recent case study from our website for more information on how this works.
Welcome to the final blog in my lockdown start-up opportunities series. Hopefully you’re feeling inspired to go out there and take full advantage of the benefit of a crisis generating new and unusual opportunities.
I’ve used Startups.co.uk’s list of ‘best business ideas’ published over the past few years to take a look at which businesses might make the startup success list in 2021.
1. Living With Less
I’ve certainly noticed an increase in people having clearouts during lockdown. Skips have arrived on driveways and random piles of unwanted belongings have been left with ‘please help yourself’ signs. It’s true that one man’s trash is another man’s treasure but the trend these days seems to be to minimise clutter wherever possible.
One angle on this is the ‘borrow instead of buy’ trend, started by the likes of Uber and AirBnB who ‘lent’ lifts and accommodation and now, justpark.com has a list of over 300 ways to borrow anything from textbooks to surfboards.
Add to this the current burgeoning trend for reusing and there are business opportunities aplenty to avoid reducing our spend and what we send to landfill. Kintsugi is the Japanese art of making something which is broken beautiful; the Swedish philosophy of ‘lagom’, meaning not too little and not too much; and not forgetting Marie Kondo and you have a wealth of areas to explore for your next opportunity.
2. Is online the only way?
An interesting comment in the 2019 business ideas article reads as follows: “…in 2019 consumers will turn to the internet for traditionally face-to-face services they previously wouldn’t have considered accessing online.” Hmmm. I suspect the author didn’t think this would quite reach the scale it has given coronavirus and a worldwide lockdown. However, we are where we are, and online activity is certainly a necessity for many of us.
Pivoting your business – or launching yourself into the online market anew – definitely needs to be part of any new business plan being prepared for 2020 and beyond. There are also many new opportunities to be exploited in terms of the associated fallout of all this screen time. Meditation, digital detox and time management being just a few.
3. Plastic alternatives
Think back to life pre-coronavirus, and remember the incredible progress that was made in the war against plastic. Sadly, some of this good will have been undone by our sudden and overwhelming need to access disposable PPE but, rest assured, the plastic issue isn’t going to go away forever. As our ‘new normal’ dawns, we’ll need ever more inventive ways of living without pollution.
So many great initiatives were started before lockdown, any budding product entrepreneurs out there should be capitalising on the lull in activity to develop their designs. Never before has the world had to entertain such a level of change to our everyday lives. Now must surely be the perfect time to stay on the crest of that wave and launch new and better products for the future health of our planet.
Welcome to the third blog in this series, all about opportunities that have emerged from lockdown. Things have certainly been different during lockdown and it looks as though they will continue to change with lots of talk of the ‘new normal’.
I’ve used Startups.co.uk’s list of ‘best business ideas’ published over the past few years to take a look at which businesses might make the startup success list in 2021.
1. Time is money
Apparently, we’ve all had extra time on our hands for the past few months and perhaps it is this which has led to an uptick in popularity of such crafts as macramé and such hobbies as keeping house plants.
In a blast back to the seventies, people are embracing both these retro trends. Houseplants have been enjoying a resurgence for several years now and macramé just happens to be a great way to display their lovely leaves. As the world gets busier, there are increasing numbers of people without access to a garden, so this trend is likely to keep growing….
2. Cocktails and dreams
Make your business dream a reality by investigating the new fashion for cocktails and premium mixers. Lockdown has added another twist to this tale as we’ve seen people partaking in mixing and tasting sessions virtually, and the delivery of ready-mixed cocktails to the home.
The money, however, might well be in the mixers as this market has been extremely lucrative for large premium brands. There’s therefore still plenty of space for startups to introduce something innovative. Consumers love provenance, natural ingredients, and local producers so there are lots of differentiators to cash in on.
3. Forget FinTech, FemTech is where it’s at
Finally, for Part 3 of this series, let’s take a look at women’s health. Clearly things like worldwide pandemics focus our minds on health and wellbeing more than ever and that’s certainly come at the right time for those interested in the women’s health tech space. Still crowded with topics that are a little taboo, women’s health is somewhat behind when it comes to technical innovation.
However, we sense that is about to change and we’re already seeing more airtime given to subjects including menopause, period tracking and contraception. Developing technology to help women navigate the ever-changing landscape of their health is certain to be a hot spot as big data, women embracing technology and a hunger to learn more about our bodies converge to create the perfect opportunity.
A great range of opportunities seem to be coming to the fore, post pandemic and we’ve still got a few to share. The fourth and final instalment in this blog series will look at living with less and the rise of the online business model.
Welcome to the second part of my blogging mini-series, all about opportunities that have emerged from lockdown. Whether you’re a furlough-preneur forced to try something new or a corona-preneur who has realised the attraction of working from home, there are plenty of great ideas for business start-ups.
I’ve used Startups.co.uk’s list of ‘best business ideas’ published over the past few years to take a look at what businesses might make the startup success list in 2021.
1. A sporting chance
Although somewhat interrupted during the coronavirus lockdown, sport is always going to be a part of our lives. Despite a lack of televised activity, the number of people currently getting out and about on pushbikes is estimated to be one of the fastest growing activities in the UK. Brompton, our largest bike manufacturer has reported a fivefold increase in online sales since the start of April and Halfords has reported a 23% increase in share price.
Startups.co.uk listed American sports, most specifically football, as one to watch in 2019, but perhaps sports-related businesses should keep an eye on whether lockdown trends look set to continue.
2. Alexa – don’t leak my data!
Crime, in respect of burglaries and car theft, may have reduced dramatically with everyone safely stuck at home but the criminals of the future exist in cyberspace. Predictions of an incredible 22.5 billion devices connected to the internet by 2021 mean a growing market has to be security for the Internet of Things (IoT).
There’s been no shortage of data breaches in the recent past and with more and more activity now moving to online platforms, devices need to be smarter and have increased protection. Cue the tech-savvy entrepreneur riding the wave of the demand for watertight security at device level over the coming months.
3. Plant Power
Veganism has been enjoying a high profile for some time now but two things have happened since we encountered COVID-19: firstly, we’ve all started to think about our health a little more seriously and, secondly, things that might never previously have been available can now be delivered to our doorstep. The outcome of these is no more excuses.
Plant-based foods are now entering the mainstream market as people hunt for the ultimate superfood and try to position themselves to avoid potentially harmful food imports post-Brexit. The fact that established research institutions have recognised the benefits of eating more plant-based foods surely signals the green light (pardon the pun) for business ideas in this sector.
From crisis comes opportunity, or so the saying goes. Watch this space for the next blog in the series investigating yet more post-corona business ideas including macramé, cocktails and yet more health apps.
If you missed part 1 read it here
As someone who is continually viewing and assessing new ideas for businesses, or helping successful business owners work out how to scale what they have, I’m always intrigued to see how trends move and what impacts the type of businesses that become popular.
Startups.co.uk have published a list of ‘best business ideas’ for the past few years so, over the course of a series of blogs, I want to investigate what this list might look like in 2021.
There is an amazing entrepreneurial spirit in the UK and, it seems a trauma such as Brexit, followed hot on the heels by a crisis such as Covid, have done nothing to dampen this spirit. However new business ideas, just as much as existing operational businesses, will undoubtedly need some tweaking to adapt to new ways of life that massive change inevitably brings.
Simon Sinek was live on Facebook recently saying that coronavirus was probably the biggest thing to hit the UK business world since the launch of the internet. Think back; businesses were born specifically to exploit the new normal (Amazon), some adapted very quickly and made a huge success (for example the travel/package holiday industry) and, for some, it was just a change too far (Blockbuster comes to mind). So, what is the next chapter in the story? Which businesses will survive? Which will thrive?
1. As safe as houses?
I have heard the comment made that we can no longer claim “a hairdresser will never go out of business” because, it seems, there has come a time when people won’t have their hair cut even though it continues to grow. However, the safety and surety of bricks and mortar is surely one which will continue, price fluctuations notwithstanding, ad infinitum.
In particular, building for the ever-growing care market (as mentioned in Startups.co.uk’s 2018 list). The expected shortfall in care home beds is expected to reach 14,000 by 2026 and recent issues associated with coronavirus might even see some redesigning taking place to offer up better protection against similar crises.
2. Food for thought
Now, we might feel we can cope during lockdown with slightly longer hair, but there’s one thing we do all need to do and that’s eat. Interestingly, the somewhat niche area of ‘late-night food’ was being seen as a trend in 2018, with speculation that there was a new phenomenon known as ‘the fourth meal’. Fast forward to 2020 and there has been a popular pivot by pubs in particular to serve take-away food in order to keep the cash flowing.
As a nation who, despite being stuck at home, seems to be no less keen on a nice meal and something to drink, this has been gratefully received and the delivery of food has also been a bonus and a convenient way to avoid contact while we’re distancing from each other.
3. We come to you
Talking of take-away and deliveries, yet another benefit of being an online retailer has come to the fore during the past few months: with a highly efficient delivery service, Amazon and the like have (almost) not needed to blink. However, far from being left behind by the big boys, we’ve also seen lots of local businesses start delivering in order to keep their business alive while people are stuck at home. I’ve heard the phrase ‘letterbox gift’ recently, in response to handily-sized gifts being delivered; anything from specialist tea bags to cards with a wooden virtual hug token attached to them.
It certainly shows that with a little innovative thinking we can use what has traditionally been a very commoditised service for very bespoke services. The gig economy is there; drivers willing to put in the miles already exist. It’s just up to the smaller businesses to work out how they can package their goods to be attractive as a delivery item.
Winston Churchill once said “to improve is to change, to be perfect is to change often”. It looks as though this is a good mantra for today’s business owners. We’ve pivoted to cope with lockdown but what else will we need to do once we find ourselves in the ‘new normal’?
Most business ideas are borne out of a desire to change something; to do it better, faster, cheaper (or more profitably).
The energy around a start-up is always tangible and there’s no lack of enthusiasm when it comes to getting things ready for launch. But, it’s important to take the time to check your idea is sound and to take careful steps to ensure you build your dream and not a nightmare experience.
Building a business is one thing. Creating something that is likely to be successful and sustainable is quite another. We’ve seen, during crisis-hit 2020, that you never know what’s around the corner and your business needs to be carefully thought through and constructed to weather the storm.
Read on for my Ultimate To-Do List For Successful Business Startups.
Build Solid Foundations
This is a little bit about planning and a little bit about investing. For many entrepreneurs, the idea itself is the key to success and, in their mind, hard work will get them there. However, as with anything new, first impressions count. That’s why branding and messaging is so important.
Don’t skimp at this stage. The temptation to rush something to market may be strong but getting the wrong brand – or a weak look and feel – could well be the difference between success and failure. Jumping into the business world is a big decision. You need to be completely convinced you have a great idea.
Additionally, sound foundations and a deep understanding of why you’re doing what you are will stand you in better stead for meeting future challenges.
During the COVID crisis, businesses that were able to pivot quickly – to revive and thrive – were those who knew their brand and purpose inside out and could therefore visualise where they sat in the ‘new normal’.
Invest in a proper study, work out your avatars, understand your market and consider what your brand needs to be synonymous with. Ask yourself what problems your brand is solving; have you got a unique proposition?
Know Your Network
Often in business, it’s not what you know, it’s who you know. Who has the expertise that you need to tap into? When it comes to startups, the journey from concept to funding, finding expertise and needing to expand can happen rapidly. If you truly believe your idea has legs, you owe it to yourself to spend some time researching how you will achieve each of these stages in the journey. Ask yourself:
- What sort of funding do you need and where can you get it?
- What does your initial team look like? Are they in your network or do you need to find them?
- Have you got the business-wide experience or acumen to drive launch and expansion quickly or do you need to buy this in?
Experience of significant interruption to normal processes has highlighted the importance of business ecosystems and being well networked to survive. No business is an island and your support network comes into its own when the going gets tough.
Focus on Value
I’ve blogged before about how to create a unique value proposition and this concept is so critical to any business startup, even before the proposition takes shape.
With any new idea, you must be able to determine and communicate what value it is adding to the existing offerings in the market. If you can’t identify this, you will struggle to convince potential customers as to why they should do business with you. It is key for gaining the attention and buy-in of investors but also so important in ensuring growth. To grow and scale in as short a timeframe as possible, you need a frictionless business. One of the trickiest things to overcome (and therefore the biggest generator of friction) is competition and a lack of USP so make this one of the first things you think about alongside your new idea.
It’s often tempting for inspired and enthusiastic entrepreneurs to come up with lots of ideas and continually increase their scope. However, the business world these days is much more of an ecosystem. For true success, it’s better to be specific and excel in one area rather than trying to be the expert across a spectrum of areas. Creating a niche and then building a strong presence within it is critical to success.
There are several areas where it pays to be specific. One is in creating and understanding your ideal client avatar. By being clear about who you want to do business you will be far more likely to attract those people. Saying you want to focus on female entrepreneurs is woolly. Saying you’re keen to work with female entrepreneurs in the finance sector who are aiming to exit their business successfully within 5 years is really going to speak to the right people.
Get comfortable outside your comfort zone
Building a successful business was never meant to be easy and it seems the world in which we operate is becoming more complex. Risks are harder to see and assess, yet still need to be calculated and assessed. As an entrepreneur you are highly likely to need to make judgement calls here and there without necessarily having the clarity that you’d like as to what the future holds.
Back in 2017, I wrote a similar blog, Seven Simple Questions To Ask Before Starting Your Own Business. Not much has changed in terms of my advice but the reality in which you read it has been turned on its head. As I concluded then, factors such as your network and the way you build the foundations of your business remain of paramount importance. In addition, we now need to add flexibility and on-the-spot innovative thinking to our ever growing list of skills.
Starting a business is a learning process, no matter how many times you might have done it before. Although it’s sometimes good to learn from your mistakes, you don’t want to fall into common traps if a little research and guidance can help you to avoid this. So, with that in mind, here’s our list of the top 5 mistakes made by startup entrepreneurs, and a little guidance on how to avoid them.
1. Not putting in the right amount of planning
There are entrepreneurs who totally underestimate the amount of planning it takes to get a business idea off the ground but there are also those who never quite make it to market and miss the window of opportunity to successfully launch their new idea. Neither are ideal.
Planning may get in the way of an exciting idea but it’s essential if you’re going to get it right. Every area of the business has to be researched, from understanding the size and opportunity in the sector to knowing as much as you can about your target audience. This needs to be balanced with accepting that sometimes you have to go to market without everything being perfect.
That’s why, at Streamlion, we offer a free initial consultation to all our prospective clients. It helps us – and you – fully understand the scope of the project and, as we support businesses at all stages of their startup journey and through their growth, we can make sure you’ve not forgotten anything.
2. Not prioritising money matters
Again, there are two ways business startup owners can make mistakes when it comes to money. Firstly, many simply aren’t aware of the raft of different funding arrangements that are available to them. Not having the right information at the start of their journey will instantly put an entrepreneur on the back foot. It’s impossible to plan a successful business if you don’t even know the scope of what might be possible.
Secondly, and perhaps for the same reason, entrepreneurs will often either spend too much, too soon or assume they need a huge amount of cash upfront in order to be successful.
Starting out on a business journey is stressful enough so we’d recommend working with an experienced organisation like Streamlion when it comes to accessing funding. Our previous experience speeds up the process and increases your chances of a successful application.
3. Neglecting the nuts and bolts of policy and process
Maybe because this is another ‘dry’ topic, but it’s surprising how many entrepreneurs take risks when it comes to things like legal protection, contracts and the implementation of proper processes. These things are like foundations for your business. Growing with them in place is a lot easier than retrospectively adding them.
Start by filing for the proper legal structure and business registration and follow this on by enforcing contracts, processes and protection from the outset. At Streamlion, we have helped many new businesses by optimising their processes and ensuring their business is efficient as soon as it is launched.
4. Failing to embrace change
For some business owners, their idea is their baby and woe betide anyone who questions it. Being too ‘in love’ with your idea can be a recipe for disaster as it’s likely this will lead to the wrong ways of working. It might mean you try to do everything yourself, so as to get things exactly as you dreamt them; you might become resistant to change and therefore unable to evolve when you need to or you could become over-confident and expand too quickly.
Whichever way you look at it, it’s always good to seek and consider the opinions of experts, whether they are a part of your team or someone you pay for advice and guidance. In our experience of change management, we have found that it is one of the most important things for a business to get right. The trick is – and this is where our experience comes in – to effect change with the minimum of disruption to the business.
5. Starting without considering the end of the journey
Every good business plan should have an exit strategy. If you feel certain of success, why would you not decide how you will maximise the benefit of that success? As part of the initial planning phase, it’s really important to scope out what you think success looks like and, therefore, at what point you might want to cash in and move on to your next project.
Of course, exit strategies don’t necessarily mean leaving the business. Many entrepreneurs like to keep a guiding stake, perhaps as Chair of the Board or as a non-executive director. Exit plans are particularly important if you’ve started the business with the help of an investor, of course, and your strategy for this will need to be a part of the initial plan requesting investment.
At Streamlion, we’ve worked with new and established businesses to understand the best time to sell and move on. We like to think of it as a succession plan for your business journey.
Ultimately, launching a new business involves some risk and every entrepreneur will view this differently. If you’re armed with research, plans and have consulted those whose opinions you value, you can at least make your risk assessment in a calculated way.
You can have the very best business idea ever but, without a compelling value proposition, it might never get off the ground. Why? Because your value proposition is what lets your audience know why they should buy from you and you alone. It’s your power play, your ace card, or, to use marketing lingo, your USP.
A value proposition is officially described as “a positioning statement that explains what benefit you provide to whom and how you do it uniquely well.”
A winning value proposition will capture the essence of your business in one short paragraph. Think Uber: Tap the app, get a ride. Uber is the smartest way to get around. One tap and a car comes directly to you. Your driver knows exactly where to go. And the payment is completely cashless.
Not only is this value proposition simple and easy to understand, it actually names all the things that people don’t like about the competition – never being able to find a cab, drivers getting lost, not having cash on you when you need it most – and turns them into Uber’s USP. These are the pain points that Uber has set out to resolve. In this case, they are also the benefits customers can expect and the reason we should all flock to Uber and ignore any other taxi companies that might want our business.
How will your value proposition generate revenue?
At Streamlion Consulting, we work almost exclusively with start-up or scale-up businesses. We, therefore, spend a lot of time discussing the merits of, and the added value brought by a new or growing business idea. It’s this time and energy which many entrepreneurs cut out of the process. In their enthusiasm to start trading, they fail to get a clear enough understanding of the problem they are trying to solve or how their business is different from the next.
And, to answer the question about revenue, the very first thing a compelling value proposition will do is get you access to funding and investment.
Essentially, a strong value proposition will contain a little marketing messaging, some operational information and an idea of strategy. By bringing so many messages to the market, it will be highly effective at convincing buyers and decision-makers that they should be doing business with you. And, once this process is underway, revenue is an inevitability.
To work really well, your value proposition also needs to be succinct, specific and service-focused. In some ways, it represents the very start of your customer experience.
How does a value proposition work?
In a nutshell, a good value proposition will provide the differentiator between your business and your competition.
Renowned businessman and investor, Warren Buffett, refers to them as an ‘economic moat’. This is a great visualisation: the presence of a powerful value proposition will help fend off competition and protect your market dominance.
What are Streamlion’s top tips on creating a convincing value proposition?
Defining your business in a clear and succinct way is a skill. As business owners or entrepreneurs with a great idea, it can be easy to get bogged down in detail, to focus too much on the infinite moving parts that make our business so amazing. But we don’t need this level of detail in order to engage our audience. Quite the opposite, in fact.
Our first Top Tip is to start with a group brainstorming session. You need to get as much information as you can out of people’s heads and into a mind map or something visual. This needs to include what problem you are solving and why you believe you are different. You can either do this with a team from within the organisation or together with an impartial third party.
The key to driving value from these discussions is to continually revisit the purpose of your business and question what problem it solves. You can also go on to discuss whether that problem needs solving and why.
Once you’ve brainstormed everything, and discounted anything that is irrelevant, not convincing or too complex, you should be left with the building blocks of your value proposition.
Our second Top Tip is to keep it simple. Don’t try to complicate or obfuscate. There are no points for big words here. Simply try to write down your purpose. Forbes.com have a great breakdown of a typical value proposition template:
For (target customers)
- Who are dissatisfied with (the current alternative)
- Our product is (new product)
- That provides (key problem-solving capability)
- Unlike (the product alternative)
As with any marketing material, authenticity and building trust with our audience is key to success. This leads nicely to our third and final Top Tip, which is to always have proof. You should be able to back up your claims with customer reviews or testimonials, or independent research and polls. You may well believe that you are ‘the best’ or ‘market-leading’ but if you can’t back that up, you will pay the ultimate price for breaking the trust of your audience.
There are lots of tips around on how to survive today’s somewhat dystopian circumstances. For businesses of any size, the focus must be on managing cash carefully, looking after people and understanding how the restrictions affect trading.
But, where there’s crisis, there’s opportunity (to quote Einstein) and for many businesses, this peculiar event could be their making. Here are my top tips to find the opportunities that exist for you.
1. Authenticity and vulnerability are not just buzz words
Honesty is the best policy, so the saying goes. These days though, it’s about so much more than telling the truth. Trust of official bodies, including brands, is at an all time low and many more of our interactions happen on digital pathways than face to face.
Social media gets a lot of criticism for presenting a falsely positive reality but there have been some very honest and extremely vulnerable posts recently which have attracted massive engagement. Showing vulnerability is key to gaining the trust of others and doing so can be very powerful for you as well as your audience. Don’t be afraid to say the bottom has fallen out of your pipeline. Perhaps you’re using all your new-found free time to help others. Why not share this and keep those genuine conversations going. Lots of your contacts will be in the same position and will appreciate your candour.
2. Build goodwill among existing clients
Here’s a novel idea: why not pick up the phone to your clients for a chat? Everyone will be feeling cut off and many are likely to have a little more time to talk than usual. Showing concern by having a chat could be a valuable way of nurturing the relationship and they might be thinking you’re either flat out or closed. You can let them know what you’re able to do or how you can help.
The way in which you show up now, as a supplier or service provider will set a standard by which people will judge your business in the future. It’s an excellent opportunity to really delight your existing customers. Think about all the touchpoints you have with them (which will have changed given current restrictions). Make sure any that have disappeared are replaced with an alternative and look at what you can offer to your clients which may help or support with the challenges they may be facing.
3. Pivot your business if you can
There’s lots of new coverage of our larger manufacturers tweaking their production lines to help with the shortages of ventilators and hand sanitiser. It’s also possible for smaller businesses to react to the crisis with new ways of working. Many of those who provide a service have been easily able to take this online with the help of Zoom or Skype and other businesses are keeping their audiences engaged with newsletters which help them to adapt to a limited way of life.
For those who’ve been left with nothing to fill their days, look for a contact who might have been left in the opposite situation. Some industries are busier than before – could they use your help and support? You could also turn to community. I know of an investor who is helping a café deliver veg boxes using wholesalers thus helping them stay afloat which is generating much needed cash for their cafés that are not allowed to open at the moment.
If there’s really nothing you can do differently, do make sure you communicate what you have done to your audience. This page on the PWC website shows they are responding to the crisis and puts them in a positive light as an organisation that cares about its people and is intent on doing the right thing.
4. Look after number one!
Paying attention to self-care is critical at times like this. No matter how resilient you are as a person, this type of experience will increase your stress levels. Make sure you set aside time to recharge and allow your mind to process everything that is happening. Your business is nothing if you are too stressed to run it and your people will thank you for being able to stay calm in the face of crisis and make the right decisions.
5. Develop your skills
If you’ve always shied away from giving webinars or showing up on social media through video, why not take this opportunity to improve your skills? Investigate what running a webinar involves. Can you pull your network together to share advice and ideas? As well as bringing the possibility to make a real difference to people, you will be generating useful content for your social media channels, letting people know you’re still there and willing to help.
6. Be ready for what comes next!
We’re not talking about further measures to stem the spread of COVID-19, but rather the point at which life can return to normal. We will get there eventually and, when we do, the businesses that have made good decisions and used their down time wisely will be the first out of the starting blocks. Being ready for this means maintaining your profile online with social media posts and having an up-to-date website, looking after your people so they want to continue working with you after the crisis and gearing yourself up for a potentially quick ramp-up in activity. Let’s face it the filing will probably still be the last thing on your list but it’s the perfect time to get this done too, physically and virtually. Get that CRM updated and be ready for the future when it gets here!
There’s no doubt about it, these are unusual times. But I want to leave you with a quote by John F Kennedy which provides food for thought in how we might get through to the other side:
“The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger–but recognize the opportunity.”
Here are some useful links with information about the virus and how it impacts small businesses and start-ups.
To find out more about our services click here.