Individual Assignment
Subject: Microeconomics
Topic: The Key Elements of Successful Business
Prepared for : Madam Iza
Prepared by
Abu Naser Md Mahraz
BX0418142
2020.1.bba03.0009
Subject Code: DEMI 131
Submission Date: 27 March 2020
The Key Elements of Successful Business
Introduction
Business processes are how things are done within a business.
Successful businesses understand the need to continuously improve
their business processes: to become more efficient and productive,
and to respond to market changes faster while providing better service
to customers.
The first element of a successful business is a clear concept of what
the business is and does. This concept is more than the idea for a
product or service or technology. It includes and understanding that
there is a market need and opportunity that seems to have the
potential for profit. In the initial stage of defining your business
concept you may not know the true market potential, but you have
identified through observation, trends, or personal experience that a
problem or need exists.
Market Expertise
That awareness leads to the second element of every
successful business: an in-depth market knowledge of the problem or
need. Business owners need to understand:
The current options for solving the problem or filling the need
Who is providing solutions and alternatives
The size of the market (how many people have the issue)
What value does the market member (potential buyer) place on a
solution
What benefits drive their purchasing decisions.
Target Customer
Successful businesses become an expert in the problem, market and
customer, then they put in place the third and fourth elements of
success—the target customer, and the solution you create for that
customer—that comprise their business’s unique selling position. This
is the first element of a well-articulated market message I call it the
business’s C.O.R.E.℠ message where the C is about the customer
(more on this later).
The unique selling position must match to the customer’s need,
problem to your business capability. Find the customer demand; then
use your skills, expertise, experience, product, service, and
technology to provide the solution to that customer segment. A
business can serve any customer that wants to buy their solution, but
they cannot target every customer. By developing a focus on a
particular segment of the market (also called a market niche or target
market), a business is able to invest its limited resources toward
connecting with prospects that have the specific need.
This is particularly important when going after the first customers and
getting started. You don’t have time or money to spend casting a wide
net. Your business (to continue the fishing analogy) needs to cast a
well-baited hook into a specific location within the ocean of fish. The
right bait (solution, benefits and price) will enable you to get the right
prospects to move toward your hook. You aren’t solving the problem
for everyone; instead you are solving the problem for a customer with
a specific set of characteristics — one of which is they are aware they
have the problem and they are looking for a solution and they have a
benefit-value (price) in mind.
A C.O.R.E.℠ Message
The fifth element of success builds on the first four elements we have
already discussed. Successful businesses have a C.O.R.E.
℠ message, in which the Customer (C) is clearly defined, as is the
Result (R) defined by the benefits to the customer are stated.
Operational Results – Make Right Things Happen
The (O) in C.O.R.E. ℠ is Operations; in other words,
what systems you put in place you keep your promises to the
customer. This is the sixth element of a successful business, and
consists of defining how you will do business and make money. The
operational aspect of the business is equally important as the
product/solution you sell. The reality is it doesn’t matter how great
the solution or how many prospects you have or even how many
people say, “Yes I’ll buy,” IF you can’t deliver. The operations of the
business determine how much it costs to do business, to keep the
promise to the customer, to product and deliver the product, etc.
Countless businesses have started with a great idea, found the right
market, built a fabulous product or technology and went out of
business—because they couldn’t operate their business properly.
This brings us to the seventh element, which is an additional variation
on the (R) in C.O.R.E. ℠ This R is also about Results, but focuses
on the results the business generates by generating the promised
customer result (solving the problem). The business results or
goals/targets consistently involve three key metrics: Revenues,
profits, and cash flow. These financial metrics reflect the ability of the
business to get the sale, deliver the product, obtain resources, control
costs, and do business. These results are also indicators of the
effectiveness of the business’s ability to Execute.
The final component of C.O.R.E.℠, Execution (E), is the act of
serving the customer and doing business. This is also the eight
element of a successful business and can make or break a company. I
have worked with clients who acquired important technology and
product solutions from companies who failed to execute. They either
failed to define the business, to find the customer, to develop the
customer’s understanding of the solution’s benefits, mismanaged the
production or operations, or all of the above. If you can’t do, then you
won’t succeed. Whether it is analysis paralysis, waiting for a “perfect”
time, or moving too quickly or too slowly, the reality is that you have
to execute to succeed.
The Business Entity Model
Sometimes the inability to execute effectively resides in the ninth
element of success: A business plan and model that clearly identifies
how you will generate revenue and profit. This means you have a plan
of action and are not just doing random things hoping they work. It
takes your business concept and gets into the details. It matches up the
market problem with your capabilities and defines the solution you
are selling to that specific market niche. It takes all the ideas,
assumptions, and pieces of your business and pulls them together.
The model is actually more about the process of developing the model
and planning than it is about the document you produce. That said, in
practice I ask my clients to put everything down on paper, especially
if there are multiple founders/managers/investors involved, because it
forces everyone to literally get on the same page and agree on the
content from who the customer is, to the size of the opportunity, to the
resources that will be needed, to the timing of key milestones, and all
the other operational, financial, and executional aspects of the
business.
The business model that clearly identifies how to make a profit also
requires that you quantify your assumptions. This means that you take
all the financial information you have and generate financial
statement forecasts, sources and uses of funds, timing of cash flows.
These financial forecasts, budgets and performance metrics and
milestones are the tenth success factor. The financial statements
planned versus the actual results enable you to manage the resources
of your business. They enable you to know what went according to
plan and what didn’t. They enable corrective action and objective
evaluation of what is and isn’t working in your business.
10 Critical Elements Your C.O.R.E.℠ Business
needs
So once again here are the ten things your business needs to lay
the foundation of success:
Clear Concept
Expert market knowledge of the problem, size of opportunity, etc.
Specific customer
Specific market niche or solution
C.O.R.E. ℠ Message
Well-designed Operations (systems, processes, etc.)
Results (Goals, performance metrics, etc.)
Execution — ability to take action to generate desired results
Business Model Financial
Information (planned and actual.
Conclusion
To be successful in sustainable business practices often requires
entrepreneurship and innovation. The discussion is most relevant to
sustainable businesses focused on offering new products and services
in response to societal concerns. The importance of entrepreneurship
and innovation also applies to companies that change how they
produce products and services and business model that clearly
identifies how to make a profit also requires that you quantify the
assumptions.
