While every business has elements that are unique to it. Every successful business shares common characteristics with other successful businesses.
The first element of a successful business is a clear concept of what the business is and does. This concept is more than the idea for a product or service or technology. It includes an understanding that there are a market need and opportunity that seems to have the potential for profit. In the initial stage of defining your business concept, you may not know the true market potential, but you have identified through observation, trends, or personal experience that a problem or need exists.
That awareness leads to the second element of every successful business: an in-depth market knowledge of the problem or need. Business owners need to understand:
- The current options for solving the problem or filling the need
- Who is providing solutions and alternatives
- The size of the market (how many people have the issue)
- What value does the market member (potential buyer) place on a solution
- What benefits drive their purchasing decisions
Successful businesses become an expert in the problem, market, and customer, then they put in place the third and fourth elements of success—the target customer, and the solution you create for that customer—that comprise their business’s unique selling position. This is the first element of a well-articulated market message I call it the business’s C.O.R.E.℠ message where the C is about the customer (more on this later).
The unique selling position must match to the customer’s need, problem to your business capability. Find the customer demand; then use your skills, expertise, experience, product, service, and technology to provide the solution to that customer segment. A business can serve any customer that wants to buy their solution, but they cannot target every customer. By developing a focus on a particular segment of the market (also called a market niche or target market), a business is able to invest its limited resources toward connecting with prospects that have a specific need.
This is particularly important when going after the first customers and getting started. You don’t have time or money to spend casting a wide net. Your business (to continue the fishing analogy) needs to cast a well-baited hook into a specific location within the ocean of fish. The right bait (solution, benefits, and price) will enable you to get the right prospects to move toward your hook. You aren’t solving the problem for everyone; instead, you are solving the problem for a customer with a specific set of characteristics — one of which is they are aware they have the problem and they are looking for a solution and they have a benefit-value (price) in mind.
A C.O.R.E.℠ Message
The fifth element of success builds on the first four elements we have already discussed. Successful businesses have a C.O.R.E. ℠ message, in which the Customer (C) is clearly defined, as is the Result (R) defined by the benefits to the customer are stated.
Operational Results – Make Right Things Happen
The (O) in C.O.R.E. ℠ is Operations; in other words, what systems you put in place you keep your promises to the customer. This is the sixth element of a successful business and consists of defining how you will do business and make money. The operational aspect of the business is equally important as the product/solution you sell. The reality is it doesn’t matter how great the solution or how many prospects you have or even how many people say, “Yes I’ll buy,” IF you can’t deliver. The operations of the business determine how much it costs to do business, to keep the promise to the customer, to product and deliver the product, etc. Countless businesses have started with a great idea, found the right market, built a fabulous product or technology, and went out of business—because they couldn’t operate their business properly.
This brings us to the seventh element, which is an additional variation on the (R) in C.O.R.E. ℠ This R is also about Results but focuses on the results the business generates by generating the promised customer result (solving the problem). The business results or goals/targets consistently involve three key metrics: Revenues, profits, and cash flow. These financial metrics reflect the ability of the business to get the sale, deliver the product, obtain resources, control costs, and do business. These results are also indicators of the effectiveness of the business’s Ability to Execute.
The final component of C.O.R.E.℠, Execution (E), is the act of serving the customer and doing business. This is also the eight-element of a successful business and can make or break a company. I have worked with clients who acquired important technology and product solutions from companies who failed to execute. They either failed to define the business, to find the customer, to develop the customer’s understanding of the solution’s benefits, mismanaged the production or operations, or all of the above. If you can’t do it, then you won’t succeed. Whether it is analysis paralysis, waiting for a “perfect” time, or moving too quickly or too slowly, the reality is that you have to execute to succeed.
The Business Entity Model
Sometimes the inability to execute effectively resides in the ninth element of success: A business plan and model that clearly identifies how you will generate revenue and profit. This means you have a plan of action and are not just doing random things hoping they work. It takes your business concept and gets into the details. It matches up the market problem with your capabilities and defines the solution you are selling to that specific market niche. It takes all the ideas, assumptions, and pieces of your business and pulls them together.
The model is actually more about the process of developing the model and planning than it is about the document you produce. That said, in practice, I ask my clients to put everything down on paper, especially if there are multiple founders/managers/investors involved because it forces everyone to literally get on the same page and agree on the content from who the customer is, to the size of the opportunity, to the resources that will be needed, to the timing of key milestones, and all the other operational, financial, and execution aspects of the business.
The business model that clearly identifies how to make a profit also requires that you quantify your assumptions. This means that you take all the financial information you have and generate financial statement forecasts, sources and uses of funds, the timing of cash flows. These financial forecasts, budgets, and performance metrics and milestones are the tenth success factor. The financial statements planned versus the actual results enable you to manage the resources of your business. They enable you to know what went according to plan and what didn’t. They enable corrective action and an objective evaluation of what is and isn’t working in your business.
10 Critical Elements Your C.O.R.E.℠ Business Needs to be Successful
So once again here are the ten things your business needs to lay the foundation of success:
- Clear Concept
- Expert market knowledge of the problem, size of the opportunity, etc.
- Specific customer
- Specific market niche or solution
- C.O.R.E. ℠ Message
- Well-designed Operations (systems, processes, etc.)
- Results (Goals, performance metrics, etc.)
- Execution — ability to take action to generate desired results
- Business Model
- Financial Information (planned and actual)
Copyright ©2016 Lea A. Strickland and F.O.C.U.S. Resource, Inc.