Updated: May 8
Working with different entrepreneurs, new and existing business owners every day, one tends to grow the appreciation of business, financial and market readiness as a great tool to a solid business foundation and how lack thereof could potentially destroy it in a click. I have considered these as triggers to business success and sustainability and if well-articulated, have great potential to provoke high growth capabilities for your business.
I would like to dive in first to financial readiness for your business and the tremendous gap between the financial seekers and the funders. A lot of business owners underestimate the value of designing a business system that clearly defines the business and, in the process, identifying who the right funder for the business is. The word 'need' should be given careful consideration in any entrepreneur's life. Does the business need the finance? If yes, how much does it really need? What is the ability of the business to payback and by when? Equity financing vs debt financing? (Venture capital vs loan financing). Further to this, if received, careful consideration should be given to the planned distribution of the finance in the business and how can it be used effectively and efficiently to trigger its sustainable growth.
The cheapest finance for small business and startups could be seed donations from existing network of friends or family members? Although most business owners feel uncomfortable with this, it seems best to approach people who already believe in the business ability to deliver on its goals and growth potential. These funders, in most cases should be willing to back them before the hard evidence exist that lenders require to assess the business before extending any form of financial assistance.
A start-up business presents a higher investment risk than a mature business. Startups have a lot of difficulty in getting finance, which if found, is normally very expensive. Most mature business have assets for collateral and a known cash ﬂow that allows investors and lenders to assess business risk hence by its nature, potentially a low risk proﬁle.
Whether you need to start a business, expand your business, buy material or equipment for the business, its important to understand the different types of finance available to suit your business needs. Also of utmost importance is for business owners to consider cost effective finance that aligns to their business definition and enable sustainable growth. consideration can be given to business processes that might be able to "self-subsidizing" and still be operational sustainable. Do not overspend, you can start small or prioritize business. A business without the appropriate funding strategies and sources will be drawn into a big sea of debt. It is therefore also never too late to relook or restructure your business at any point where you realize the wheel is losing its momentum to bring optimum cost management strategies.
With that in mind It is therefore very crucial to consider if your business is ready at all points of its growth phase. Is it built around well thought and value adding concepts that trigger sustainable growth. A very good business readiness plan is built on a good change or implementation management plan. It comes with the big responsibility of accepting that change has to happen. This coupled with strong communication, training and support is paramount for the success of the big change to come.
Lastly, market readiness. Before launching your product or service, have you done enough research if it is ready for the target market, have you checked if your targeted market is a true market? Have you interviewed the potential true user to see if this product or service can solve a user need? As a business owner or start up, you need to understand the importance of validating your product or service for the market release. Is it relevant or are there any adjustments to be made before launching? Is it still relevant as when you did concept testing? Are you ready for the competition in the market and who is your competitor?
Consider the two elements of market readiness, quantitative and qualitative. Quantitative market readiness research is focused more on analyzing numerical aspects of your product or services, including promotions, pricing, and product focus metrics that involve surveys and analytical data assessments, whereas qualitative is deep understanding of where your product is well suited in the marketplace, the swot analysis (strength, weaknesses, opportunities and strength). In short qualitative methods are best suited to address " where", "how" or "why", while quantitative methods are best suited to questions that answer, “how many” or “how much”. This seems like an intimidating task for most business owners but shouldn't be because it is vital for a successful market penetration and survival. Is the business, product or service market ready?
However with this being said it is worth noting that as a business, you are not alone. It is becoming increasingly important more than ever, for business owners to:
a) Consider the benefits of augmented outsourcing where they lack and
b) How they can extract maximum value from an outsourcing partnership that brings sustainable value adding definition to the above key elements of your business. Although it might sound costly, in most cases, the long term benefits considered, supersedes the business risks.
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