What’s proof of concept and why you should know it
[bctt tweet=”Test a business idea before scaling up your business with this simple concept” username=”SheLeadsAfrica”] There’s a huge risk attached to every new business. We’re talking the loss of lots of money. That’s why it is important to test a business idea before scaling up the business. Simply prove a business idea works and is commercially viable, and you’re off to a great start. This is called “proof of concept”. Most of the time, venture capitalists/investors look out for proof of concept before putting in money in a business venture. This is because it quantifies how much a business has (and is able) to accomplish in a way that’s measurable. When you create a product/service and are able to achieve a certain level of traction with it, it becomes easy to relate with whatever huge projections you set especially when trying to get investment. Showing that a business works can help zero in on a definite path to follow for success. In the bootstrap model, a business becomes commercially viable somewhere along the “sell” stage, just before the “growth” stage. How do I know my business shows proof of concept? Well, when a business idea shows proof of concept, it means one or all of the following The business has been able to capture its own sizeable audience. The business has been able to successfully sell a product/service and make money (profit) from its audience. Systems and processes within the business are reproducible on a commercial scale. A business that has not attained a proof of concept is not necessarily failing. However, such business has most likely not been able to clearly identify how to make money from an audience on a commercial scale. None of this applies to me, what can I do? To increase your business’ potential for success, it is important to look out for proof of concept before scaling up commercially. The proof of concept verifies important assumptions about the business and reduces the risk involved in taking a small business/startup into the mainstream market. [bctt tweet=”To increase your business’ potential for success it’s important to look out for proof of concept” via=”no”] Here are some parameters to consider when checking for proof of concept in business. Net profit Gross profit Revenue/ revenue growth rate Number of customers/clients/users Customer/clients/users growth rate Systems and processes Total amount invested in business Return on investment The result from the analysis of these parameters says a lot about the potential of a business idea that has been set in motion. These parameters can also be used to see how well a small business/startup is doing. This is why recordkeeping/bookkeeping is important in business, it lets you keep track of progress. If your business is funded by personal funds/friends and family, I recommend checking these parameters as you use the bootstrap model to develop your business.
6 ways to improve your stakeholder relationships
[bctt tweet=”In business you need more allies than adversaries, keep your allies happy with these tips” via=”no”] For any business to succeed, stakeholders must be well taken care of. These are your clients, suppliers, partners, investors, employees and the broad community who have an interest in your business. When a stakeholder is not taken care of, the effects can be felt in various parts of the business. Building strong relationships with stakeholders and maintaining them takes effort, time and a well thought out action plan. Below are six tips you can use both to build and maintain healthy stakeholder relationships. 1. Actively build strong relationships from the start You know what you would like to achieve, and you know what it will take to achieve that vision. Share this vision with your stakeholders on a more regular basis than you typically would. Don’t wait for structured meetings, use every opportunity you have with them to get them on the same page. [adsanity align=’alignnone’ id=144658] 2. Involve your stakeholders Yes, it may be your vision but remember its execution and success depends on how enthusiastic your stakeholders are. Ask for their advice. A very powerful question you can ask is, “How can we best serve you…?” the answer is forward looking and guess what, you have a real chance of doing what is asked. 3. Schedule periodic touch-base sessions We sometimes underestimate the importance of staying top of mind, especially where clients are concerned. To support the first tip of actively building strong relationships outside structure, have a structure built in as well. Regular meetings keep you and your stakeholders on the same page and this means you are able to pick up on potential challenges before they even arise. [mailerlite_form form_id=14] 4. Keep your word Do you deliver on your promises? When you say you will call back, do you call back? When you say you will have something important finished by a particular time, do you do it? If you want to build lasting stakeholder relationships, do what you said you would do. Remember it is about your integrity, your trustworthiness and the respect you have for yourself and the other person. 5. Have an open mind When you are after win-win relationships, understand that the job of the other party is not to feed your ego. They will have contradictory opinions, they will say things you don’t like, accept that. It is actually a good thing because the last thing you want is to surround yourself with ‘ego feeders’ who don’t help you grow. Always have the big picture in mind and listen to suggestions, thank people for their inputs and genuinely consider what they have to say. 6. Address issues as and when they arise There is nothing worse than hearing about a ‘transgression’ months after the said event took place. Not only may you have forgotten about it, but also the fact that the other person brings it up says a lot. In keeping with positive relationship building with all your stakeholders, make sure you are open and transparent. If something is bothering you, talk about it and clear the air. When you approach all your stakeholder relationships with the view to continuously improve them, the other party will know it and this will set the bar on how they respond to you. In business, you need more allies and champions than adversaries. For your vision to be realised, you must constantly work on your relationships.