Is your business in the summer doldrums? Does it need a shot in the arm by either revitalizing its core or by expanding into a related area?
You need to start looking at your business through the eyes of a venture capitalist. Fortunately, you don’t have to win a Shark Tank audition to do this; you just need to tweak the way you think and take a long hard look at your opportunities.
Think Big. Think Different.
The first step to thinking like a venture capitalist is to grab the IMAX slogan and internalize it: Think Big. Don’t go into this planning to settle for marginal growth. You want to hit a home run. And to do this, you need to adopt Apple’s old slogan: Think Different.
Here’s where it gets tricky. Tragically, in articles like this we toss around clichés such as “think outside the box” like one-year-olds toss Cheerios to the kitchen floor. In fact, you might not be able to get a significantly innovative and unique perspective on your business and what is possible. If so, I have ideas for you in just a moment.
However, first try to kickstart your thinking process. You need inspiration; get it from others. Subscribe to some Google news alerts on subjects related to your business. Mull these over for a few weeks, jotting down ideas that you can use to expand your business.
You may need more input. First, turn to your employees. Don’t be afraid or embarrassed to ask for inspiration. Ask for their biggest ideas. Further, bring them into the process as you decide how to expand. A good question to ask key employees is, “If you were to head up a new department, project or product line, what would you want it to be?”
If you need to go outside of yourself and your employees, look for business coaches and check out local incubator-like programs. Some state and local agencies have programs designed to help existing businesses grow.
Venture capitalists are looking for ideas that will disrupt a market. Those are big, different ideas. That’s where your head should be too.
The Incredible Shrinking Risk
We know that the vast majority of new business ventures fail. It’s a fact of life. Therefore, any new direction you decide to take your business has beaucoup risk associated with it. But the question is: What are your plans to reduce that risk month after month?
To do this you must be able to identify the biggest initial risks. They might be hurdles such as:
- High costs to develop and produce a new product.
- Uncertainty about market size or acceptance.
Write a list of all the major challenges you can anticipate now. Your job is to include in today’s plans strategies to overcome tomorrow’s challenges. New ventures fail because they underestimate the challenges. I’ve recently been following one fully funded Kickstarter project that is facing all kinds of unanticipated technical challenges to producing its product.
Also, be totally honest with yourself—and your accountant—in terms of assigning overhead costs. It’s tempting to charge some new venture overhead costs to your existing core business. For example, if you or other personnel are spending half your time on the new venture, you need to account for it. How much warehouse/office space is it taking? It’s a given that you need to do everything to hold down costs, but to accomplish that, you must be measuring them properly.
The Dream Team
If you were presenting your proposal to real venture capitalists, they would take a long hard look at your team. Do you have sufficient talent in place to execute your plan? You have to include yourself in this. You couldn’t take Bill Belichick’s offensive scheme for the New England Patriots and expect the Detroit Lions to pull it off. (Sorry, Detroit.)
With an excellent idea, the right people and a plan to reduce the risk of your new venture, you may be able to defy the odds and create an adjunct to your business that creates real growth.
Images: ”Amazing Think Big text on clouds/ Shutterstock.com“
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