Building a business bridgehead - Getting the great idea off the ground

Introduction

Here follows a step-by-step contextual guide to establishing a bridgehead for a new business. In taking the outline plan and populating the detail in each step business owners will be able to make decisions with clarity and a greater degree of focus. In turn this will improve their ability to create new revenue streams both in terms of speed and growth whilst maintaining control over the process.

Using the guide

The guide is written as exactly that, and is based upon business principles and experience of helping others establish new base of operations. The concept being to establish a bridgehead or platform from which further and sustained growth can be accomplished.

Businesses will often consider the setting up in order to take advantage of economic conditions or for the entrepreneur to take control of their own destiny. Often the initiative will fail as some fundamental steps in the process were missed in the early excitement of establishing a new business. The guide will help any business plan effectively before pressing, “Go” on the project.

The three steps should be completed in order and documented at each stage to ensure a common understanding and prevent assumptive thinking. Adopting a structure of:

·     Good and appropriate research

·     Exploring options not doing what looks most exciting

·     Committing a plan to paper with a clear return on investment

·     Execution  

·     Continually monitoring and managing to the plan

Following these simple steps will ultimately deliver a greater chance of success.

The guide

Step 1 – WHY – Be clear on the reason why you want to set up a business and what outcomes you want it give you.

This sounds a fairly basic thing to decide, so often though it is not clear. Boards of Directors tend to make assumptions why the project is needed without fully discussing it and most importantly documenting it. In general business many companies struggle making decisions because they have a lack of clarity and common understanding of why they are in business. The same can be said for the reason to start a new venture.

Setting up an operation and seeing what will happen will not necessarily fail but it certainly will not give the maximum return or desired outcome. Not having a clear “Why” will confuse the decision making process, cost more in marketing and recruitment and in turn negatively effect the profitability of the new venture.

The Why is very much a personal thing, a reason for getting out of bed everyday, a higher purpose if you like. The greatest success stories usually occur where there is a “Why” the founder or founders are really attached to. More often than not this is not about money, it is about a personal desire to create a legacy.

Step 2 – WHAT – Focus – Develop a rigor for perfect clients not business at any cost? Be clear on how to stand out from the competitors and avoid jumping into a saturated market

More businesses fail through lack of focus than any other reason. In simple terms if you want market share in an already saturated marketplace you need to focus on something very different to the others not try and compete with them.

Take a look at the market, understand what everyone else is famous for and position yourself against them. If everyone starts to discount then concentrate on the service, if everyone is selling to a broad spectrum of clients and markets become more specific.

There are four elements to the research to be completed on the competition before formulating a plan.

·     Who we want to sell to?

·     How we will service them?

·     What we are delivering to the client?

·     How we will construct our pricing?

Who we want to sell to?

Research should start with understanding “who” you want as a customer, by that I mean a perfect client, not just a client. New ventures fail through taking on too many of the right type of clients. Within a short period of time the business is devoting 80% of its time to 20% of its profit. A clear recipe for failure as they have no time to find the perfect clients.

How we will service them?

Next is to decide how you are going to service them. Markets are different understanding how to deliver service from the new bridgehead will help you understand what infrastructure and resources are required, how they should be trained and equipped.

What we are delivering to the client?

Your product is your product of course whether that is a service based product or a physical product. A business with a clear understanding of what that product delivers as an outcome to the desired perfect client.

How will we construct our pricing?

Setting both the structure and level of pricing in a new market will be a fundamental pillar of the success of the new venture. Constructing the pricing model to match competitors might not be the best idea, if they sell on a product pricing model then perhaps a bundled pricing strategy might be a better option.

Positioning against the competition is possible but it needs to be based upon good research and local market knowledge. Armed with this research it will now be a lot easier to build referral networks and create a steady and sustainable pipeline of business.

Step 3 – HOW – Infrastructure – Build the appropriate infrastructure to support your WHY and your WHAT. Build what you need and no more.

Armed with your good research as outlined in step 2 coupled with a clear ‘Why’ from step 1 you are now in a position to plan the map of the bridgehead. You now know where it needs to be, how big it needs to be, who you will need (and what skills they have), and what support you need. Here is a list of the support infrastructure to consider

·     Facilities

·     People

·     Banking

·     Finance

·     Legal

It is imperative at this time to document the plan not carry it around in your head. Documenting has two outcomes; it makes it real for you and gives you something you can clearly get others to buy into. Namely those closest to you as they will be part of the journey with you and you will need their support.

Summary

With good planning and research it is possible to quickly build a bridgehead and then expand from there, in line with the desired business objectives. Make use of local knowledge; understand the market as well as you can before pressing go. Take time, invest in research and document a plan will pay dividends in the long term.