Building a Sustainable Business
Is your business strategically positioned to harness opportunities and thwart looming threats presented by approaching horizons? Most business owners are so busy trying to manage the day-to-day that they fail to plan for the future. It’s no wonder 80% of businesses fail before their fifth anniversary and 80% of the survivors suffer failure before their tenth.
Business has never changed so quickly and dramatically. The new millennium brought with it a fluidly changing business landscape. What you knew and did last year won’t support the same growth or profits this year. You must be on your toes and at your planning table regularly if you want to build a sustainable business. Business owners and CEOs need to be working on their businesses not in them.
Most people look at the lifecycle of a business in much the same way as they do that of a single flower. Envision a garden where the collective sum of the whole represents life. As an individual flower gives way to death, multiple others succeed into the life cycle. The transition of any one plant from life to death is virtually unnoticed because the plantings are plentiful and transitional. The life of the garden is the focus more so than the plant itself. The life of a business should be as the garden.
Successful companies are dependent upon the continual development of viable, transitional revenue streams. As revenue streams naturally decline, others are in development; they’ve been nurtured, creating a pipeline of innovative, sustainable new sources of profit.
This healthy pipeline, which is really more like an inverted triangle, is the heart of a growing, sustainable business. The bottom one third of the inverted triangle represents the businesses or revenue streams from core products and services for which the company has become known, and from which the business creates its profits. The middle third represents emerging businesses that show great promise for near term profitability. The top third represents embryonic business ideas that have not yet been vetted or filtered into the more promising emerging business tier of the pipeline. This tier is full of business ideas, most of which will not possess the viability to qualify for the emerging business tier.
You’ll want to integrate this three-tiered concept into each business or revenue stream within your organization for maximum opportunity and sustainability. Every leader must be managing responsibilities within the three tiers to integrate the growth mindset throughout every fiber of the organization.
Building this three-tiered pipeline requires perpetual entrepreneurial planning. It requires that the business owner have their finger on the pulse of the longer-term horizon. Understanding the shifting winds of your industry and customer evolution is critical to successfully developing this three-tiered pipeline.
Knowing what questions to ask and developing strategic initiatives to keep viable ideas percolating will help you develop the embryonic phase of your pipeline. Those with the ability to increase revenue and market share will migrate into the emerging business tier. With a focus on extended horizons, routinely gather a team of 3 to 5 entrepreneurial-minded peers to brainstorm these and other questions for ideas.
- What strategic relationships do we have that can open the door to new business and opportunities?
- What products can we modify or further develop to increase our customer base? Create customer loyalty? Reach new markets? Other geographies?
- What need is our product or service providing to our customers?
- Is there a complimentary product or service we could bundle to better support or increase our customer base?
- In what markets can we expand?
- What competitors might we consider for acquisition? Merger?
- What other industries might benefit from our services or products?
- Where are our strengths and assets and where can they potentially spawn new business opportunities? Target markets?
- Can our delivery channels and mechanisms be improved or tailored to reach untapped customers or markets?
- What legacy implicit or explicit boundaries need re-evaluating?
- In what ways can you modify the way your service is delivered or bundled? How can you evolve your service to include other markets or strategic partnerships?
- What core competencies can be bundled, re-purposed, and introduced to your current market? New markets?
Use these questions to develop the embryonic business tier and then filter them through the vetting process. Nurture potential opportunities and eliminate those that lack promise. Develop your business plans and models for the emerging businesses and transition those that prove the greatest potential for profit into core businesses.
Is your business built to last? Every business owner has the potential to create a growth-oriented sustainable business. The Peak Performance Group, Inc is a global organizational consulting and executive development firm specializing in strategy development, alignment, and execution.
If you are interested in learning more about building a sustainable business, please contact Sheri’ Taber.