The 5 Components to Making Your Business “Perfect”
Lately I have been teaching a uniquely green focused FastTrac™ Tech Venture program run by ITAC – New York City’s Industrial and Technology Assistance Corporation and created by the Marion Ewing Kauffman Foundation, the world’s largest organization devoted to entrepreneurship.
Our class is full of small start-up and early-stage businesses with state-of-the-art green technology business concepts. Super cool ideas ranging from solar panel manufacturers to internet-based companies that measure energy usage of your home and commercial buildings.
This week we were going over how to really test their business concept, and how close they are to being a “model” business.
Based on the market research they have been doing, I asked them to rate their businesses based on the following five components:
- Product / Service Feasibility – Does the product or service serve a purpose? Is their a need for it? What makes it better, different or unique from competitors’ products or services?
- Market Feasibility – Is there a demand for the product/service? From whom? What are they currently purchasing instead? Will you be able to capture some of the market share out there? How much of it?
- Financial Feasibility – What is your cost structure? How much can you sell your product / service for? How profitable will it be? How scalable is it? How quickly can you ramp up production of your product / service to meet demand? How much capital do you need to make it happen? Do you have this capital or do you need to raise it? From where would you raise it?
- Technology Feasibility – How “current” is your technology? Will your potential customers “get it” and understand its value? How difficult is it for your competition to enter your market? How much of a lead time will you have over the competition? How will you stay ahead of the curve on your technology as it changes?
- Environmental Feasibility – How much energy does your product / service consume, including travel, office equipment, etc.? How much carbon is your business emitting? Water pollution? How about chemicals, heavy metals, and toxicity in production and distribution of your product / service? Natural resources consumed, such as paper, metals, water, etc.? Design: durability, reusability, and reused/recycled materials? Packaging and waste / recyclability of the materials? How does your supply-chain taking care of the same issues and their environmental impact?
This turned into an hour-long discussion and debate on how to measure these various components and their importance in business.
Especially the Environmental Feasibility component.
The class wondered what was so important about measuring these issues and if all of them applied to each of them. The answer is by making it important for their business turns into a very serious benefit over their competition, as long as it is well researched and done authentically. And that most of the components apply to most businesses. More than the average entrepreneur realizes!
I encouraged them to focus on the amount of savings and/or increased revenue a company can receive by really ramping up their environmental feasibility.
It can effectively put them far ahead of the competition.
Just as important as implementing the changes of these five components of a model business is knowing how to leverage them once they are put in place. That is this week’s action steps for them to do and I’m really looking forward to seeing the results they come up with next week.
Action Steps for the Week
Rate your business from 1 – 10 on the following five components:
- Product / Service
1 = poor – 10 = excellent. Add them up and compare to a “model” business score of “50”.
Very few businesses ever score a “50”, but use it as a benchmark to strive for. And look at your “lower” scores and know this is a place to start ASAP.
And for those lower scoring components of your business determine how to ramp them up. Do you need to do some market research to determine what you need to do? Do you need to determine how to leverage that part of your business once it is ramped up?
For example, if you got a weak score on technology, how do you get up to speed? What has to happen? How much will it cost? How can you market it as a leg up on your competition? And then how can you stay ahead of the competition going forward? Lastly, where do you find this information out?
This can take some work and research, and in the end you and your business will benefit dramatically because of it.