Chris Lorimer brings you the top tips for suceeding in a new business.
PUBLISHED: 10:00 15 March 2015
Copyright © 2014 Jonathan Pratt ABIPP
Chris Lorimer of Lorimer Consulting Limited is a management consultant with a background in operational excellence and helping businesses to grow. He understands well that starting a new business from scratch is always a daunting prospect but he is here to explain that there are five top tips you should follow to give your new venture the best chance of succeeding.
Wherever we turn, the world of business is changing, constantly responding to changing trends, market conditions and new technological developments. However, you would have thought that the way entrepreneurs develop businesses would stay the same, following the well worn path of planning, development, and launch. Well, even that has now changed with the influence of “the Lean Start-Up”.
So what’s new?
The Lean Start-Up approach, developed by Eric Ries, was founded in an attempt to reduce the risk of failure – 75% of start-ups fail to progress – arguing that the traditional approach is inflexible, slow and insufficiently responsive to the markets’ requirements.
As Mike Tyson, the world champion boxer, eloquently once put it: “Everyone has a plan until they get punched in the mouth.”
The Lean Start-Up approach prizes experimentation over detailed planning, requiring businesses to test their concepts first, amend and improve the design iteratively. Recognising that cash and enthusiasm are scarce commodities, the approach ensures that time, resources and money are directed towards the product’s development.
Five Lean Start-Up tips for success
These five top tips are drawn from the Lean Start-Up approach and have a relevance for all Start-ups as well as existing businesses:
1 Plan to act
Move away from producing lengthy business plans, which aim to predict the future many years ahead and are out of date as soon as they are produced. Instead, try summarising on one page the key determinants that influence success. If you can’t explain what the core business idea is at the centre of this in a succinct way, then you may need to think again.
2 Minimise waste
The approach aims to avoid waste of the key business resources, particularly cash, time and enthusiasm. This means that resources are sparingly invested and non-value adding activities are avoided. This includes any activity that requires unnecessary transport, involves duplication, creates inventory through over-production, or results in defects.
3 Listen to the customer
. The approach requires the development of a process to capture the target customers’ thoughts and expectations. The feedback is sought proactively, assessed critically and then acted on.
4 Continuous development
The approach involves iterative development of products until the point where they are ready to be scaled up. Opportunities to take products to new markets are considered if customer research indicates that this is feasible.
5 Measurement to improve
The approach distinguishes between “vanity metrics” to ones that help inform the start-up’s development. Precise understanding of, for example, the cost per customer acquired will help determine how the business may develop.
Although the approach won’t work for every Start-up, every business should consider the five top tips, especially when faced with the prospect of, for example, creating a business plan, investing heavily upfront, or launching a new idea.