How to get your business idea off the ground (and keep it that way)…

So we have a client whose problem is that her services business, launched in Harare, in 2013 is still failing to take off… Some of you may also recall VOIP operator Spiritage/Broadacom? They came on to the market in 2011, armed with a new product offering which was tipped to take Econet/Telecel/Netone out of business and a US$25 million budget to drive the assault. Needless to say, Econet/Telecel/Netone are still in business and Spiritage/Broadacom went out of business in July 2013. Another still birth? This article aims to introduce a key ingredient of business planning and strategy which not only secures your business idea against a still-birth but also helps keep the business venture afloat and growing after launch.

Business Traction

Proper traction means growth...
Proper traction means business growth…

To avoid such still births, your business planning and strategy need to pay careful attention to the concept of “Traction”.  Traction refers to the ability of a business to generate revenues from your chosen market.Traction can thus be defined as (1) evidence of demand for your product AND (2) your ability to translate that demand into $$$$$$.  Lets put it simple. If there is no demand for your product, there are no clients, so no revenues. If demand is there but for some reason you are unable to turn it into meaningful revenues, there is neither progress nor growth again.Business traction refers to the progress of a new business venture and the momentum it gains as the business grows.

What to do when you are not getting traction.

If you are not seeing growth it may be that you need to either (1) revisit the product/market fit or (2) invest more in marketing or (3) undertake some additional market research and competitive analysis. The last thing you want to do is to forge on when your chosen market is not interested in your product or service (…at least, in its present form…) The results of this investigation should see you either redesigning your product, business model or strategy to better fit your chosen market or, in the extreme case, completely closing shop and focusing on a different area.

Get back to the drawing board and reinvent...
Get back to the drawing board and reinvent…

You should not despair; entrepreneurship is all about going through several rounds of such investigations until you come up with a perfect product or service. Most businesses are only able to gain proper traction after several such rounds.

Back to our client…

Our case study, Spiritage/Broadacom could not reinvent their business model to help them get traction because of their (1) scale and (2) problems with banks. Our client on the other hand is small and has no debt. She has the flexibility to adjust her product offering and business model to gain traction. After several consultations and investigations she has decided to redesign her services to focus more on a niche market where there is demand (but little competition). She has stopped trying to serve the general market where she has to rival old established players. Our opinion is that Spiritage/Broadacom should have started smaller, focusing on a niche market, away from Econet/Telecel/Netone, then scaling up as they grew. That is what our client has decided and what most start-ups should do as well.

Before launching your business…

Any business planning consultant worth their business card will address traction for your business as the major part your business planning and strategy. Often, the business owner typically focuses on product design issues, while failing to address the concepts of addressable market size, routes to market, customer acquisition and sales forecasts which are strongly correlated with the core aim of gaining traction. Proper business planning can really help ensure that entrepreneurs focus on all pertinent activities as it forces you to take a holistic view of the opportunity.

Parting shot…

Unlike, large companies, smaller businesses can (and should) reinvent themselves several times until they get the requisite traction. However, proper business planning can minimize the number of reinventions needed before your business gains traction thus saving you money, time and efforts. Once your business achieves the desired traction, scaling up & expansion will be next on the agenda…

Remember, BIG things happen when small things are done right…

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