Tuesday, May 17, 2011

Four Key Components of Successful Businesses

Lea Strickland, CEO/President of F.O.C.U.S. Resources™
Over the past 20 years or so working with companies of all sizes and stages, I have observed that successful organizations share some common features and characteristics. These elements can be filtered down to four components:

  • Viability
  • Visibility
  • Capability
  • Credibility

    These are the objectives of starting, growing and running a successful business, regardless of the life stage of the business (e.g., the new business, growth-stage, long-term existing business). All four elements encompass the activities, processes, priorities, and practicalities of building an organization that is connected to its customer, understands the importance of execution, and maintains awareness of its environment and its impact on organizational success.

    Viability is a market revenue and need-based assessment. It is about analyzing the business opportunity from the customer and market perspective. Getting connected to the customer early in the business and product development process assists in:

    • Defining the problem or need that exists
    • The number of potential customers
    • Size of the opportunity in revenues
    • Location and characteristics of the market
    • Segmentation and niches within the customers

    The reality is you have to have enough potential customers for it to make sense to pursue it – dollars and cents, revenues and profits are the goal.  Too small a market means you are limited in the returns you can obtain.  However, a small market may be a stepping stone from which you can establish your credibility and spread into other markets.

    Visibility concentrates on understanding the elements of developing the marketing message and identifying the communication channels for reaching the customer, investors, and other potential stakeholders. Visibility recognizes that there are many potential opportunities to reach the customer, but they won't all be equally effective.
    With a myriad of choices that include traditional marketing and business development tools from advertising, to direct mail, and more modern options like social media (e.g., Twitter, LinkedIn, Plaxo), understanding and selecting the proper communication outlets becomes increasing complex.

    The need for defined, targeted, strategic messaging that positions the company, products, and the brand of the organization increases by a several orders of magnitude, and it’s crucial to understand your customers and which methods are most effective for them … and you.

    Capability is the foundation that enables your organization to deliver the product. It is the ability to deliver on the commitments made in pursuing the customer, raising funds, and selling the product.  Capability is about the ability to grow the business and run it well, and can be most clearly illustrated by your company’s business plan.

    The elements of the business plan, from the executive summary to the exit strategy, are determinant of how successful your organization will be. From technology to teams, milestones to objectives, sources and uses of capital, the bits and pieces of your organization and what it will become are first captured and understood in a robust discussion and documentation of decisions that ultimately determine whether you are (or are not) able to successfully run your business.  The type of business you build depends upon your decisions, but the success of your organization depends on your commitment to executing the plan. What kind of business will you build?

    Credibility is the recognition that a business needs to be respected.  It needs customers and other stakeholders to believe the organization is committed keeping promises. Without credibility businesses have an uphill battle to persuade customers to buy, investors to invest, and resources to use.  How does a business demonstrate capability and build credibility?  By doing!  By demonstrating that the business and the technology/product are capable, the organization builds credibility.

    From formulating a start-up plan and developing a strategy to putting together an experienced and skilled management team and developing a funding strategy, the credibility of a business is built through achieving meaningful, specific milestones, which may include:

    • Achieving First commercial revenue
    • Achieving break-even
    • Positive cash flow
    • Acquiring seed/angel investors
    • Landing venture funding
    • Proving manufacturing capability
    • Investing in professional management systems

    When it comes to acquiring customers or investors, and ultimately having a successful business, these four key components are essential. They’re not everything you need for a profitable organization, but they are fundamental factors in getting your new business on the road to success, or an existing one back on track.

    The Technovation Entrepreneur™ (www.technovationentrepreneur.com) program is designed to provide education and execution support services to get the architecture and mechanics of the organization in place and optimized.  The earlier a company becomes market focused and action-oriented the sooner they are able to raise capital and get a product to market.  The program has three tracks to guide organizations to success:


    These tracks provide modules on everything from selecting the legal and tax entity to getting funding to grow the business.  

    F.O.C.U.S. Resources™ is pleased to be a sponsor of the Start-up Weekend in Durham, North Carolina.  This is a great opportunity for us to connect with our customers and market and get them started out right!

    Lea A. Strickland, MBA CMA CFM CBM GMC
    F.O.C.U.S. Resources™

    Copyright ©2011 Lea A. Strickland

    No comments:

    Post a Comment