When you set up a new business, pressure to sell is immense. We can help… With so much money pressure, the temptation to leap on any (and all) business opportunities is hard to resist. However, although it is really important to get some revenue in through the door, you should still think about which bits of business you want in the beginning: never forget your capacity to deliver is usually very limited.
In some ways, starting a business is not unlike starting a war: no plan survives first contact with the enemy unchanged; it is easier to start something than to stop it; also, if you don’t have an exit strategy you probably won’t succeed. The good news is that putting these elements in place is really quite simple and you don’t need to over-engineer it. Here’s the simple approach broken down into a few, key, steps and some links further into this website for more information.
What am I actually delivering? This is a high level question but the answer should be explainable in a very few words. If you can’t do this (often referred to as the “Elevator Pitch” of the “30-second commercial”), then you need to define that first.
How am I differentiated? No two businesses are exactly alike; the differentiation may be due to a unique technology, better relationships, different track record, improved service quality, superior people… or, ideally, more than one of the above. Be wary of deciding to differentiate in terms of “hurdle” parameters – such as HSE systems or having industry standards or legal frameworks established. B2B customers will refuse to deal with you until you comply with these, but you won’t usually get merit for going beyond the “required standard”.
Where do I want to go? Every company needs to have a sensible strategy. It doesn’t take long to put together but it must be a commercial strategy, with action points and timelines, or it is worse than useless (because you think you have a proper plan when you don’t). Many companies defer thinking about this – using the argument they are just starting out and it is premature – but in reality it is much better to define a strategy because the process itself will help you select choices – then change it later if necessary.
How will I build capacity? Every company starts small. Defining how and when to grow is something that should be actively managed to a plan, rather than be allowed to happen in a haphazard way. One of the very common causes of failure in “second stage” businesses (i.e. those that have been going a few years and have built a small but effective team) is uncontrolled growth that defocuses people from what they started out to do. As a small business you have to be selective about which opportunities you will aim to win, and which you will not. The Proactive Sales Coach helps you decide.
Which markets do I am to expand into? Understanding your market is an important component of building a business successfully. Often, it is placed at the top of the list (i.e. the first consideration). For an established business that identifies a gap it decides to fill, this makes sense; however, for a startup, where the core skillsets of the founding participants are the fundamental business asset, it is often wiser to take those and see where it leads, rather than the other way around. A natural place to start is, of course, the sector in which the founders worked – but looking within that, and beyond it, with a neutral eye, is often the best approach. We have a specific approach to help startups do this.
What is my exit plan? This doesn’t have to be finalized on Day 1. It is quite likely that you won’t have a specific exit in mind when you start. You might be a new venture for an established business, so you think like a startup but the plan is growth under the same ownership. Or, you may be planning to sell the business on in a few years. Or this might be you and your family’s activity for a long time. Whichever it is, it will impact how you will invest in it and how you will develop it. So, it is worth thinking about.