Tag Archives: Keys to Success

Entrepreneurship Knowledge Services

For many businesses their competitive edge lies in their knowledge. Entrepreneurship Knowledge Services offer a way to maximize your advantage. The Canada Business Network expands upon this concept:

What Is Knowledge In a Business?

Using knowledge in your business isn’t necessarily about thinking up clever new products and services, or devising ingenious new ways of selling them. It’s much more straightforward.
Useful and important knowledge already exists in your business. It can be found in:

• the experience of your employees

• the designs and processes for your goods and services

• your files of documents (whether held digitally, on paper or both)

• your plans for future activities, such as ideas for new products or services

The challenge is harnessing this knowledge in a coherent and productive way.

Existing forms of knowledge

• You’ve probably done market research into the need for your business to exist in the first place. If nobody wanted what you’re selling, you wouldn’t be trading. You can tailor this market knowledge to target particular customers with specific types of product or service.

• Your files of documents from and about customers and suppliers hold a wealth of information which can be invaluable both in developing new products or services and improving existing ones.

• Your employees are likely to have skills and experience that you can use as an asset. Having staff who are knowledgeable can be invaluable in setting you apart from competitors. You should make sure that your employees’ knowledge and skills are passed on to their colleagues and successors wherever possible, e.g. through brainstorming sessions, training courses and documentation. See the page in this guide: create a knowledge strategy for your business.

Your understanding of what customers want, combined with your employees’ know-how, can be regarded as your knowledge base. Using this knowledge in the right way can help you run your business more efficiently, decrease business risks and exploit opportunities to the full. This is known as the knowledge advantage.

BASIC SOURCES OF KNOWLEDGE

Your sources of business knowledge could include:

• Customer knowledge – you should know your customers’ needs and what they think of you. You may be able to develop mutually beneficial knowledge sharing relationships with customers by talking to them about their future requirements, and discussing how you might be able to develop your own products or services to ensure that you meet their needs.

• Employee and supplier relationships – seek the opinions of your employees and your suppliers – they’ll have their own impressions of how you’re performing. You can use formal surveys to gather this knowledge or ask for their views on a more informal basis.

• Market knowledge – watch developments in your sector. How are your competitors performing? How much are they charging? Are there any new entrants to the market? Have any significant new products been launched?

• Knowledge of the business environment – your business can be affected by numerous outside factors. Developments in politics, the economy, technology, society and the environment could all affect your business’ development, so you need to keep yourself informed. You could consider setting up a team of employees to monitor and report on changes in the business world.

• Professional associations and trade bodies – their publications, academic publications, government publications, reports from research bodies, trade and technical magazines.

• Trade exhibitions and conferences – these can provide an easy way of finding out what your competitors are doing and to see the latest innovations in your sector.

• Product research and development – scientific and technical research and development can be a vital source of knowledge that can help you create innovative new products – retaining your competitive edge.

• Organizational memory – be careful not to lose the skills or experience your business has built up. You need to find formal ways of sharing your employees’ knowledge about the best ways of doing things. For example, you might create procedural guidance based on your employees’ best practice. See the page in this guide: create a knowledge strategy for your business.

• Non-executive directors – these can be a good way for you to bring on board specialized industry experience and benefit from ready-made contracts.

EXPLOITING YOUR KNOWLEDGE
Consider the measurable benefits of capturing and using knowledge more effectively. The following are all possible outcomes:

• An improvement in the goods or services you offer and the processes that you use to sell them. For example, identifying market trends before they happen might enable you to offer products and services to customers before your competitors.

• Increased customer satisfaction because you have a greater understanding of their requirements through feedback from customer communications.

• An increase in the quality of your suppliers, resulting from better awareness of what customers want and what your staff require.

• Improved staff productivity, because employees are able to benefit from colleagues’ knowledge and expertise to find out the best way to get things done. They’ll also feel more appreciated in a business where their ideas are listened to.

• Increased business efficiency, by making better use of in-house expertise.

• Better recruitment and staffing policies. For instance, if you’ve increased knowledge of what your customers are looking for, you’re better able to find the right staff to serve them.

• The ability to sell or license your knowledge to others. You may be able to use your knowledge and expertise in an advisory or consultancy capacity. In order to do so, though, make sure that you protect your intellectual property.”

Business Planning Overview

The purpose of the business plan is to recognize and define a business opportunity, describe how that opportunity will be seized by the management team, and to demonstrate that the business is feasible and worth the effort.

The successful entrepreneur is generally more inclined, once a business idea is selected, to sharpen the concept by a detailed planning process. The result of this step is a comprehensive business plan, with its major components being the marketing “mix”, the strategic plan, operational and logistical structures, and the financial proposal. The purpose of the business plan is to recognize and define a business opportunity, describe how that opportunity will be seized by the management team, and to demonstrate that the business is feasible and worth the effort.

The business plan is the “blueprint” for the implementation process. It focuses on the four major sub-plans: marketing, strategy, operational/logistic, and financial. While the business plan often goes through some revision, it generally represents a rather advanced stage in the planning process. The primary product or service to be offered, based on the results of the market research, should be determined.

Whether the business will be a start-up, purchase of an existing business or a franchise should certainly be firm at this point. Often, a specific business location is indicated, or at least a rather specific area.

Time estimates in a business plan should allow for meeting all the necessary regulatory requirements and acquisition of permits to get to a “customer-ready” condition. The amount of funding required and a general approach to raising these funds should be determined. Marketing mix issues focus on how the product or service is differentiated from the competition.

A business can differentiate itself on any of what are often referred to as the “four P’s” of marketing: product characteristics, price structure, place or method of distribution, and/or promotional strategy.

Strategic issues relate broadly to the company’s mission and goals. Every venture must continually assess its strengths and weaknesses, the opportunities to be seized, and any threats to the success and plans of the business. Operational issues relate to company structure, and the scope of the business. The operational plan addresses tangible items such as location, equipment, and methods of distribution. Decisions on these issues largely determine startup costs.

The financial proposal includes an estimate of the amount of money needed to start the venture, to absorb losses during the start-up period, and to provide sufficient working capital to avoid cash shortages. It projects sales and profitability over some period into the future, generally 3 to 5 years. Where outside funding is sought, it also describes distribution of ownership of the venture and methods of debt repayment and/or buyback of partial ownership.

Where implementation of the plan requires participation of lenders and/or investors, the plan must clearly and convincingly communicate the financial proposal to the prospective stakeholders: how much you need from them, what kind of return they can expect, and how they can be paid back. Many entrepreneurs insist that their business concept is so clear in their heads that the written plan can be produced after start-up; this attitude “short-circuits” one of the major benefits of producing the plan. The discipline of writing a plan forces us to think through the steps we must take to get the business started, and, to “flesh out ideas, to look for weak spots and vulnerabilities”, according to business consultant Eric Siegel.

A well-conceived business plan can serve as a management tool to settle major policy issues, identify “keys to success”, establish goals and check-points, and consider long-term prospects. The plan must realistically assess the skills required for success of the venture, initially and over the long run, and match the skills and interests of the team to these requirements. Test the plan, and an accompanying oral presentation, on friends whose business judgment you value. Let them assume the role of a prospective investor or lender.

John B. Vinturella, Ph.D. has over 40 years’ experience as a management and strategic consultant, entrepreneur, and college professor. He is a principal in the business opportunity site www.jbv.com and its associated blog. John recently released his latest book, “8 Steps to Starting a Business”, available on Amazon.