Do business or die trying! Indeed. It is a brutal and vicious as that when it comes to business matters. Here is a short criteria selection that can enable any type of business organization no matter if it is a startup, small or large business or established corporation to run a fundamental analysis and position itself on the “Do business or die trying” radar.
No one said it is easy and no one said it is difficult. It can be a great fun and amazing experience if you follow those base categories that allow you to stay on track and avoid getting drawn in the ocean of opportunities and external influence.
It also does not matter if you are just starting your business operation or your are in year 10 of existence on the market. In both cases you need to wake up at least once in a month with the thoughts in your head reflecting the following principles.
Avoiding one of those fundamental business principles will inevitably derail you and your business in quite a bad way.
Urgency – This factor is focused on the analysis of how urgently a group of people which we define as your target market want or need your product or services? This is applicable both in B2B and B2C as well as other forms business relations.
Market Size – How many people are actively purchasing things like your potential/current product? A very simple example for that is the the comparison between the clothing industry and trainings for ceramic training courses for example.
Legal Framework – How well you have protected your rights, risk, clients and capital by putting down everything in writings making sure it is not unlawful or that it may suffer severe legal consequences in terms of money and time?
Cost of Customer Acquisition – This factor analyze how easy it is to acquire a new customer? On average, how much will it cost to generate a sale, in many aspects: money, time, efforts, other capital, etc.
Cost of Value Delivery – This factor, again as the one related to the customer one, analyze the cost to create and deliver the value your product or service promised to offer.
Scale Potential – Once the initial business has been created how do you make sure you will not be facing a dead end sign on the way of market development? No matter if you wish to execute an exit or no this is vital to the business life-cycle.
It is not a One-Off effort working on those principles but a repetitive observation you need to get used to.
Speed to Market – What time it would take you to to create something to actually sell and make $$$? Offering a 15 mins haircut can take you moments to prepare but opening a new cinema is quite the opposite.
Uniqueness of the Product – This factor analyze how unique your product or service is while benchamerked against competing offerings in the same market segment? One very important caution: how easy it is for other competitors to copy you?
Up-sell Potential – How your product is able to elaborate on up-sell or cross-sell strategies?
Pricing Potential – Do you know how to work on your pricing and how to dive the analysis of that matter? What is the highest price a typical purchaser would be willing to spend for your product or service? Why and how do you justify that?
Up-Front Investment – Very important part directly related to the cash flow management of your business. One simple question is positioned here: How much would you need to invest before your business is ready to sell?
Business valuation – This is the most “fuzzy-wozzy-buzzy” component of most businesses that lack solid business acumen on the matter. The fact that you get excited about ABC or that you have had significant growth in Q1 & Q2 does not mean it is worth $1mln. What’s your inventory? What’s your contract’s portfolio worth? What’s your human capital involved? Your Brand leverage? Etc.