I’m substitute hosting again for Kelly Scanlon on her Hot Talk 1510 AM “Eye on Small Business” radio show at 9 a.m. CDT Friday, August 21. The topic is “7 Ways to Better Understand Your Customers,” and the guest is long-time friend and colleague Barb Murphy, President of Strategic Spark.
BTW – Barb will also be doing an opening day seminar at the American Marketing Association Market Research conference October 4 – 7, 2009.
Register by September 4 to get the early bird rate. And follow the conference on http://twitter.com/amamrc for market research updates from across the web!
In this post, he shares his perspective on the criticality of developing a business, revenue, and profit model that works:
A company I know in Boston is close to closing its doors. This is disappointing, because it’s a truly unique venture that captures the remarkable stories hidden inside of every day people; things you’d usually miss if there weren’t someone clever enough to go looking and tell you what’s really there.
We’re trying to find a revenue model that will allow them to shift gears and have come up with some great short-term ideas. But their long-term viability is still a question mark. Unfortunately, this occurs all the time. People with great convictions start businesses and invest lots of time and money before figuring out how to make a profit.
I heard the same kind of story from another consultant friend recently. After that, I met a young entrepreneur at a Web Innovator’s conference who is struggling to find funding, and still needs to figure out her revenue model.
It’s happening all over the place.
Personally, I work for more than the bottom line and encourage all companies to consider social impact and environmental responsibility as part of their core strategies. But the reality is that we can’t stay in business for long if we’re not profitable. It’s not ok just to build it in the hope that customers will come, unless you are just playing around with a concept and don’t feel attached to a successful outcome.
You wouldn’t make roast beef without the roast. You don’t make pancakes without eggs. You can’t wash your car without water (well, I suppose you can at a waterless carwash. There’s always an exception). If you are an entrepreneur, you can’t succeed without a viable and flexible revenue strategy. No marketing program can make up for this fundamental truth.
One of the instructors at Boston University’s graduate entrepreneurship course requires his students to submit business plans with two alternative business models, to prepare them for the reality their core focus could fail or get pushed back. This is the equivalent of a well-stocked kitchen that allows you to improvise and adapt in case you run out of something.
We are entering the age of lean, when young, flexible companies are driving innovation. That’s a good thing. If you count yourself among that crowd, just be sure to stock the cabinets with your main ingredients before you start cooking up your next business idea. Those ingredients must include a solid financial plan and a great network.
In my area, there are lots of support groups offering free consultations. The folks from DartBoston are a good example. I know of others that focus on social entrepreneurship, pre-VC stage strategy, etc. I bet there are some in your area too. My advice is to look around and see who’s willing to give you advice before you get in too deep. Good luck! – Kai Rostcheck
Sometimes, try as you might, it’s impossible to focus on the task at hand. When you can’t focus, one alternative is to accept the mental roadblock and actively look for another time (perhaps an unconventional one) where you can shift the activity and your creative energy.
At dinner recently, we had a very specific business topic (that had been hanging for a while) we were supposed to address. With little opportunity to prepare that day, I offered an idea intended to fit within the various strategic constraints we faced. While it sort of worked amid the constraints, I woke up that night realizing it wouldn’t work in practice for a whole variety of reasons.
Next morning, I alerted the person looking for input that more work needed to be done. Yet, I still didn’t have any better alternatives.
Lo and behold, enduring a flight delay one day later when the pressure to “think” about this specific issue wasn’t top of mind, a very innovative solution came to me in about 5 minutes.
Why hadn’t I been able to come up with a creative answer at dinner two nights earlier? I have no idea.
But I do know at times our mental capabilities aren’t up to the specific demands we might need to place on them. Much of what’s on Brainzooming is intended to help you function more innovatively in these situations. These techniques aren’t always going to work though.
For these other instances when your brain isn’t zooming, often the best thing you can do is manage time expectations and pray for creative inspiration to hit you ASAP, or at least when you least expect it. – Mike Brown
I had a disastrous presentation last week. The webex was ready and working when right before the presentation was to begin, the computer completely froze. Next steps involved restarting by yanking the laptop battery, yanking my other laptop from its docking station, and trying to get one of three computers back on the webex. We ultimately had to email a file to all participants, delivering an originally designed interactive presentation on using Twitter from a 4-to-a-slide pdf, after a 20 minute late start.
Venting my frustration that evening, my niece, who signed up for Brainzooming via email last year, reminded me of the recent column about envisioning potential problems and being ready to wing it.
Great point Valerie! Arghhhhhhhhhhhhhh!
The presentation failure scenarios I had imagined focused on webex problems, so I got there early to ensure people could to see the computer desktop on the webex. What I hadn’t anticipated was the computer freezing. While there was a nearly-current version of the presentation on a USB drive, anticipating the computer failing would have led to sending the presentation upfront with another computer ready to go.
Under stress, there wasn’t time for problem diagnosis; the only alternative was implementing multiple potential solutions. Not until afterward did the problem’s source occur to me: the LCD projector had a long ago history of jamming computers with USB-based clickers. The problem hadn’t occurred in years, and I’d forgotten about it.
So let me amend the first bullet in the previous post’s advice:
- Invest a little effort ahead of time imagining what complete system failure scenarios could develop. Really go for it – if Armageddon were taking place before a presentation, could you still get things up and running on time? And what’s the backup to the alternative?
There, that feels better. Maybe I’ll be better prepared next time. – Mike Brown
Want to be more critical to your business in one easy step? Here it is:
Step 1: Create recommendations instead of reporting problems.
It’s that simple.
You can stand so far away from the crowd by simply not bothering your boss and co-workers with long descriptions of what you perceive to be broken, failing, aggravating, or insufferable in your workplace.
Instead, create some well thought out, innovative options to address the issue at hand. Deliver your recommendation, sans the soap opera, to your boss.
It’s a little harder than it sounds, but it’s well worth the effort to become the person your boss will turn to for creative answers in challenging times. - Mike Brown