The Core Principles for a Strong Business Model
Strong businesses are resilient and based on an ethic that protects them from harm.
Yorkshire Powerhouse was privately set up to encourage strong and profitable businesses … this is good for everyone as a strong business grows, employs people, pays taxes, supports their suppliers (often other small businesses) and ultimately boosts the regional economy in a positive way.
Unsurprisingly, building a strong business is actually hard to do … it takes a high level of strategy and planning, persistence, skill, experience and a small dose of luck. But we can, at least, state what we think are the common traits of a strong business.
In our opinion, a strong business starts with the following essential ingredients:
- A product or service that is profitable and enjoyable to deliver and that you are good at providing
- A business owner (or owners) who has a clear and defined vision for the business
- A business plan that carefully and accurately describes the business strategy to deliver the product or service (point 1 above) and achieve the vision (point 2 above)
That’s it! Nothing complicated!
Read on for a little more:
Download our business plan template
1. A product or service that is profitable and enjoyable to deliver
This is one area where Yorkshire Powerhouse can’t really help you. We’re going to assume that you know your product or service. You should already know whether there is a need for it and you know whether you can sell it at a profitable price.
BUT you can still think laterally here … if all you do is enter the same market as your competitors, selling the same thing they sell at largely the same price as the market then you’re not really anything special. We’ve written a whole article on ‘alternative and disruptive business styles’ and we would strongly encourage you to try to find something different in your own business style.
Generally speaking, the more unique or unusual you can set up your business, especially when the approach is of benefit to the end user, the more profit you’ll make and the less competition you’ll have.
Example: Think about the way taxi companies used to be … you could be a black cab or a private hire business … and that was it. And then in March 2009, a small business called Uber launched and changed the rules – they are clearly now the global leading provider in providing taxi hire and yet they don’t own a single car – not bad!
2. A business owner (or owners) who has a clear and defined vision
Simply put – what’s the point? If you don’t have an intended destination then you can’t plan for it, you can’t anticipate the future needs of the venture and you won’t know you’ve got there when you complete the journey.
Entrepreneurs have varying visions and goals – the most common being:
- Grow the business and then sell it for £x
- Build a steady business to provide me with a good income
- Grow the business to provide a place for my children when they grow up
- Develop a business that will benefit the community / charity / cause I believe in
- Destroy a competitor
- Be the best in the market
A good place to start is to consider what your ‘values’ are. We’ve written an article and specific download to help you with this. Your values and your vision give your strategy (below) an ‘end point’ to aim for and should provide you with clarity for your business in all areas.
3. A business plan that carefully and accurately describes the business strategy to deliver the product or service and achieve the vision
In our opinion, a clear strategy is an essential part of running a strong business. We thing the strategy consists of:
- A genuine understanding of your client
- A written plan for your business – ideally a detailed plan that is then condensed down into a one-page graphical plan. Your planning should include:
- An overall business plan, describing the model, the financial projections, the route to market, the ‘reasons’ why you will be successful, an assessment of risks, etc.
- A detailed marketing and communications plan. This should provide clarity on branding, the sales funnel, the channels of communication you intend to use, the mechanisms to sell to existing and new customers, etc.
- A growth plan. A growth plan is essentially ‘more of the above’ but takes into account the demands on your business for additional finance, personnel development, compliance issues, etc. It might seem too early to plan for this now but it is an essential part of being a strong business.
- Systems and Procedures
- Strong businesses will always start off embedding systems and procedures into their operation. These systems will cover finance, invoicing, debt collecting, client contact, prospect identification, operations, personnel, etc. The best person to set these systems up is you because you understand all the implications … but always be open to improvement once other people are involved too.
Building a strong business is genuinely hard which is why most businesses don’t do it properly. But this could also be why 18,000 business fail every year in Yorkshire alone … and you surely don’t want to be another negative statistic?
Blunt thinking on building a strong business from Yorkshire Powerhouse
Now you’ve read about setting up a strong business, have you any more questions?
Here at Yorkshire Powerhouse, we’re happy to help as much as possible – is there anything else we can do to help you, do you have any further questions or can we help introduce you to an expert – please let us know:
Very few people, if any, get lucky and achieve a successful outcome from their business venture without planning. Read >