How to Turn Your Business Idea into a Business Model
One of the advantages of being a business coach is the opportunity to work with a lot of different businesses and business concepts, seeing what works and what doesn't.
I've been involved in a lot of different, unique and unconventional from ladies fashion to premium dog food.
Unique ideas can work. But they need to be commercially viable with the ability to be scaled and leveraged to handle increased volume and growth.
One of the more unconventional businesses we've worked with lately has been a South African company called Liza Clifford Bra Fitting Studio -- a niche company that addresses a need many women have: to find the perfect fitting bra.
While Liza's concept was an immediate success with customers, her issue, like most idea-driven owners, was finding a way to make her idea commercially viable and sustainable -- something that goes beyond people saying, "That's a great idea. I'd buy that!"
It means people saying, "That's a great idea! Here's my money -- and can I have some more?"
Once that happens, you need to organize your entrepreneurial undertaking into a systemized model to give you predictive results.
What does that mean?
- The business can run without you. This simply means there are systems and processes that drive the business, and if anything were to happen to the owner, the business could continue to grow because the business plan, growth strategies and day-to-day "default activities" are on paper and shared with a team, not in the owner's head.
This also helps deliver the concept consistently to create personalized customer experiences. Systemization doesn't stifle personal creativity or service; it actually helps define and give parameters for the team to treat every client individually -- within the context of the company's values and culture. In Liza's case, while each one of her customers is treated to the same private fitting process that is consistent and repeatable, it is in reality an individualized experience for her clientele.
- Everything is measurable. Ideas can be nebulous and fuzzy. Numbers are objective. How many customers at what price points produce profit? What profit margins are needed to sustain growth? How much business can be referral-based from satisfied customers to reduce outside marketing spend?
Once those numbers are known, you can be very clear about what you need to do and what you need to pass on everyday to be successful. The proper training around a simple retail script can increase daily sales exponentially. Not buying the online discount ad program could save resources you need to buy new products. You can manage what you know and measure for the results you need.
- Room for growth is built into the company's structure. Growth isn't an option for being in business. It's necessity. Even if your goal is to be a home-based consultant or you want to manage and control your growth, you will need to get new customers to replace those who fall off or move on.
However, if your goal is more lofty (multiple units, national expansion, franchising), you'll need to document your processes to multiply and leverage your business concept.
The biggest reason businesses fail isn't lack of capital, but lack of knowledge. Having an idea for a business is great, but knowing the difference between a good idea and a good commercial idea is literally money in the bank.