The second in a series of blog posts.
Small businesses are often formed because the owner has a good new idea. If the idea has legs, the business grows to a reasonable but fixed level of income, then begins to flatten out. From the very beginning of sales, the business owner must determine those few decision factors that will define success. Business owners often misread or ignore the causal factors that were the basis for their early success.
In the early stage of starting a business, you, the business owner, must do the following:
- Clearly identify why your customers buy from you and then transform that understanding into a value proposition monetized. Decide what price to charge to provide this value.
- Identify whether all of your customers buy for the same reasons. If not, capture those learnings into different value propositions. Begin to recognize segments and how the different segments value their offering. You should consider modifying their offering for different segments. Decide if and how you want to serve each segment identified.
- Define your competition, how your competitors’ value propositions are different from yours, and how the differences impact the segments you identified earlier. You should monetize that difference to the extent that you can and then decide how you want to address competitive actions.
- Understand your downstream markets and assess the dynamics that could cause your customers’ business to grow or decline. You should determine if you can make a contribution to address these dynamics and begin the process of acting on that. Decide how to best reach additional markets.
- At some early point, you should determine if your product has sufficient potential to become a brand and, if so, decide how to take steps to transform your product into a brand. Early branding is better and easier. Birthing a brand requires several steps beyond selling a product.
- Given what you have learned from the above fact-based decisions, the next growth challenge is to decide how you consider new products/offerings to accelerate your business growth.
The attention to these activities and the decisions you make as a result of processing them will become the basis for ongoing growth, new revenues, and increasing competitive strength, which increases the odds of long-term success.
If you want to discuss any of these elements, leave a comment below or email me at firstname.lastname@example.org.
Read the first blog post in this series: Market-Driven Innovation: The Small Business Conundrum