Articles: entrepreneur

<div class="pageContentBlock pageBlockTextContent cf" style="border-image-outset: 0; border-image-repeat: stretch; border-image-slice: 100%; border-image-source: none; border-image-width: 1; box-sizing: border-box; color: #000000; font-family: inherit; font-size: inherit; font-size-adjust: none; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; letter-spacing: normal; line-height: inherit; orphans: 2; text-align: left; text-decoration: none; text-indent: 0px; text-transform: none; vertical-align: baseline; -webkit-text-stroke-width: 0px; white-space: normal; word-spacing: 0px; padding: 0px; margin: 0px 0px 12px 0px; border: 0px none currentColor;"> <div class="userContent" style="border-image-outset: 0; border-image-repeat: stretch; border-image-slice: 100%; border-image-source: none; border-image-width: 1; box-sizing: border-box; font-family: inherit; font-size: inherit; font-size-adjust: none; font-stretch: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; line-height: inherit; vertical-align: baseline; padding: 0px; margin: 0px; border: 0px none currentColor;"> When the world you know suddenly changes and you have no control over outcomes, it puts additional strain on a business owner. You might even go into a little panic, pulling back on all spend, reducing costs, and retreating into a cave to wait until it’s over.

Panic is contagious, but so is leadership. If you choose to panic, you may miss an opportunity to provide further value to the people you serve and come out on the other side with a stronger business.

How can you navigate through different business times and embrace the opportunity to evaluate your business and, if necessary, pivot to match changing customer needs?

Here are steps you can take to lead the business through unchartered waters so it survives and thrives.

Step 1: Conduct a current state analysis Understand how you will be impacted First, take stock of your business. How will this changing world impact you and your customers now and in the future? Map this out as best you can with the information you have available. Create a matrix on a piece of paper or document that outlines the immediate impact and the potential future impact in the key areas of your business; operations, processes, sales, marketing, HR, finance. List the key areas of the business in the left column and create two further columns with immediate and future impact.

It might look something like this.

Key area of the business

Immediate impact

Future impact

Sales

Staff

Finance

<p style="border-image-outset: 0; border-image-repeat: stretch; border-image-slice: 100%; border-image-source: none; border-image-width: 1; box-sizing: border-box; color: #000000; font-family: arial,sans-serif; font-size: 16px; font-size-adjust: none; font-stretch: inherit; font-style: normal; font-variant: inherit; font-weight: 400; line-height: 150%; vertical-align: baseline; padding: 0px 0px 15px 0px; margin: 0px; border: 0px none currentColor;">Gather information from as many sources as possible. Talk to your finance person, staff, customers, and suppliers. Follow the relevant authorities for updates, digest it all through the lens of what your business does, and input that into the impact matrix.

Identify your strengths and weaknesses Understand what it is your business does well, not so well, and everything that is going wrong due to the changing circumstances. This refers to everything from serving a certain type of customer to the systems and processes you have in place. Identify the areas that can be strengthened and those that need attention.

One useful way to do this is to map the journey a customer takes with your business and the respective way you service each element of this journey on a linear table or Service Blueprint. At the start of the journey, potential customers might become aware of your business, and at the end, they might purchase and become loyal customers. At each stage of the journey, you service a customer interaction (whether physical or digital). Identify those parts of the journey you do well, those you don’t, and where you might be going wrong due to changing circumstances. For example, if you have a retail business and you are no longer able to accept customers into your store, you would highlight this as an area that needs attention.

Very simply, it could look something like this – an example of someone purchasing a product from a website.

Customer Journey

Visits website homepage

Finds product page

Purchases Product

Notified of purchase

Notified of delivery

Receives Product

Visible actions

Updated information

Product image & info

Check out on secure page

Receives email

Receives product

Internal/Invisible actions

Website is kept current

Inventory management

Link to payment system

Email workflows automated

Customer record updated

Support processes

Analytics

Link to accounts & payment system

Link to inventory & delivery

Link to delivery service

It is likely that you would need to add in further steps for your specific business, but this gives you an idea. Highlight those areas you do well and those that need attention.

Map your ecosystem Next, look at the people you know. Verne Harnish, author of Scaling Up has this tip:

“Write down the top 25 relationships (or as many as you can) that are critical to getting you through the next few months. Who could use your core capabilities? Who could help you think through a pivot? Which customers and segments of the economy are surviving/thriving?”

The people you list here could be existing customers, potential customers, customer segments, suppliers, partners, friends, acquaintances, or family. Use the questions listed above to identify people that could use what you are good at or who could help you pivot your business. If you’re struggling to identify anyone, list all those that you have a good relationship with.

Step 2: Reflect and revisit Revisit your vision Does what you’re striving for as a business resonate with the current environment? Don’t worry about the how (how you achieve your vision), focus on the why (why you got into business in the first place). This is your purpose. In the new world, your purpose will be more important. It will make your business more resilient, and set you up for long term success.

If you don’t have your vision written down, write it down now and determine whether it’s still relevant. If you are unable to reach your vision due to the changing circumstances, this may be a sign you will need to pivot your business and create a new vision based on what you determine in the following steps.

Revisit your market position Is your product or service still relevant in these different times? Is it still valuable? How has the market changed? What is valuable to people during this time? Where can you be of service? And in some instances where can you provide customer or community support with no expectations of return? If you focus on service rather than exploitation, you’ll connect more authentically with your customers.

We use a framework called the Value Curve which identifies customers’ needs when choosing a product or service. Through the lens of the customer, what factors do they base their decision on when they purchase a particular product or service.

For example, if you need a graphic designer, you would use certain criteria to decide who to hire, such as value for money, years of experience, style, capabilities or experience in your industry sector. Then you would compare each designer against those criteria.

In the same way, you want to think about your product or service through the lens of the customer and the customer needs and compare that with the current alternatives. The alternative may even be not to purchase a product or service. For example, a co-working space may compete against other co-working spaces but it also competes against people working from home.

Reflecting on how you are positioned in the market and how market needs are changing will help you understand if you are still of value, or need to diversify or pivot to something of more value.

For example, one videographer was unable to increase the number of clients that hired him to take video because of the increasing use of personal mobile devices. Then he started to offer training on how to create an effective video using mobile. This actually led to more business because when his training clients realised the amount of work needed to produce quality video, they sought him out to do their video for them.

Revisit who your target customers are If the world changes, so do your target customers. They may be the same people, but their behaviours, needs, and wants are now very different. Understand how their habits have changed and what their goals are now and in the future.

There will be some people that slam on the brakes completely when it comes to spending. Others may spend a bit more conservatively, but aren’t as impacted. If your product or service is expendable or postponable you can only really engage with customers who aren’t as impacted by the changing environment. If you have a product or service that is essential, then you should be able to engage a wider customer base.

Regardless of the type, the behaviour of your customer base has changed, and by revisiting them and understanding how they’ve changed, you will better understand how to engage with them and provide value.

To help focus on what you can do immediately, revisit the list of 25 people you wrote down in step 1. Can you identify the people whose jobs are vital during this time but are at risk of being vastly under-supported, those who may be positively impacted by the changing circumstances, or those who may see what you offer as essential? Those are the people that you should focus on first.

Step 3: Innovate Do something new that is uniquely valuable The word ‘innovation’ gets bandied about a lot. But all it means is doing something new that is uniquely valuable. A changing world breeds innovation. Many of the well known and successful technology businesses of our current era were born from the Global Financial Crisis. But how can you be innovative? There are a few popular methodologies that focus on providing value.

The lean startup methodology, born in the early 2000s, is one approach to building a new business or product. In this methodology, you get a minimum viable product into the market to get feedback before perfecting. This has helped many successful startups identify a unique need or pain point and get something to market quickly. This idea of testing your vision and value to customers continuously (getting feedback or data to confirm or deny its value) has in many cases led to an increase in customer base because of the value the product or business provides at a particular time. One of the core questions of lean startup is not ‘Can this product be built?’ but rather ‘Should this product be built?’

Design thinking methodology has also risen in popularity because of the innovative solutions it often unveils. This methodology is a non-linear, iterative process that seeks to understand customers and their needs, challenge assumptions, redefine problems, and create innovative solutions to prototype and test.

In the previous steps, you have identified your business strengths, weaknesses, relationships, customers, and how the evolving environment has changed your understanding of them. In this step, you want to identify the value you can provide based on your new understanding. This may mean focusing on one particular area of your business, diversifying your product line, or pivoting completely.

At the time of this article, we have seen breweries and distilleries making hand sanitiser, 3D printing startups printing medical equipment, fashion houses making protective clothing, staging companies making home office desks, hotels housing the homeless and taxi companies transitioning into delivery companies.

What can you do?

Match your capabilities to the needs You now have a better understanding of the needs of your market from step 1, your market positioning and target customers from step 2, and you’ve identified your strengths. Next, try to match your capabilities with the needs of the current market.

We’ve seen high-end restaurants baking fresh bread and making ready-made meals, expensive cafes selling produce, and wine bars delivering cases of wine with cheese platters.

Change the way you deliver You may not need to change your product or service. You may just need to change the way you deliver it.

In our ever-increasing digital world, moving your business into the digital space was probably inevitable, but the current circumstances may escalate your need to do so. This may be easy for some businesses and could even just mean ramping up systems they already have in place. For others, this is a whole new territory so getting guidance through online training or workshops is useful.

One useful core value here is ‘getting started is better than being perfect’ and links back to the lean startup methodology. People are forgiving, especially when things are changing around them, so getting out there and connecting with your customers, especially through email, video chat, or social platforms, is often the best thing you can do.

Going digital is also often a cost-effective way for you to continue your relationships with customers and find new ones. As you tighten your purse strings, look to digital as an enabler of business continuity using limited resources.

Get creative What about businesses that simply can’t create something new or deliver their product or service in a different way? This is where you need to get creative or pivot.

In our current situation, we’ve seen tour operators offer ‘digital escapes’ or virtual tours through videos and images. We’ve seen retail outlets who can no longer accept customers in their bricks and mortar shop offer live wardrobe consultations. And we’ve seen a tech startup that delivered VIP shopping experiences pivot to be a click and collect service for retail outlets that can’t accept customers in their stores.

The emergence of the words like ‘quarantainment’ to describe the focus on entertaining those that are quarantined at home and ‘caremongering’ to describe going above and beyond to serve those that most need it, indicate both a willingness to help others during different times and highlight how businesses are changing what they do to provide value.

Step 4: Collaborate Partner for greater impact Another mantra that could help at this time is ‘going together is better than going alone’ and relates to the African proverb, ‘If you want to go quickly, go alone. If you want to go far, go together’. In other words, focus on teamwork, co-design, and partnering with people to achieve a greater impact.

This is especially true in a crisis situation. Not only can we be of service to those who need it, but we can also create a greater impact by joining forces with others to be of service.

In Ballarat recently, in response to restrictions, local restaurants grouped together to open a bulk produce warehouse. Locals are able to purchase bulk ingredients, from pasta to flour to ready-made pizzas, and get them delivered. With the canceling of the Formula 1 season in 2020, engineering teams partnered with the medical community to prototype much-needed ventilators to meet an increase in demand.

Who can you be in ‘co-opetition’ with? We use the term ‘co-opetition’ to describe opportunities to collaborate with organisations that you may traditionally class as your competition. Often, if working with a team of a similar skill set, you are able to achieve far greater outcomes than you would if competing against each other. Similarly, if small businesses team up, they may have a better chance against the goliaths and a greater chance of survival in difficult times.

We talked through ‘mapping your ecosystem’ earlier. As well as thinking about your most important stakeholders, why not map out who you could partner or collaborate with to ensure both businesses survive? Don’t be afraid to approach a competitor, they may be in need too. Just remember, when you collaborate you have to give something of yourself.

Also, don’t be afraid to ask for help. The willingness of others to help you is humbling, often with little expectation of anything in return. You just have to ask.

Final thoughts Solve problems and provide value It’s important for your business, now and in the future, to focus on solving problems and providing value. As a leader of your business, your job is to identify the problems you can personally solve and ensure you can provide value while uniting people towards a purpose. Keep moving, as difficult as that can be in uncertain circumstances. That being said, it is also important to look after yourself. There is a reason you’re asked to put on your oxygen mask before others in an emergency situation on an airplane. Make sure you’re OK and then move to help others.

Be of service As the world returns to some sense of normalcy, and it will, it is important to understand that the way you do business may have changed forever. There will be inevitable changes to business models and priorities, as well as changes to society as a whole.

Those businesses that are able to step up and help others during the crisis will be remembered. And when it’s all over, those that focus on how they can be of service to others rather than just on their own bottom line will be the real winners.

Originally published by Samantha Hurley on Business Victoria Hub 24 April 2020

Articles: entrepreneur

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