Frequently, people share their business ideas with me, like “I’m thinking of greenhouse farming” or “I’m considering real estate investment,” and ask for my thoughts. Usually, the conversation doesn’t progress beyond the initial idea phase. I often ask questions to encourage deeper thinking, but most of the time, they’re just seeking validation of their idea.
Here’s my structured perspective:
A New Business Should Consider Five Key Pillars:
1. Business Model:
A business model defines how your organization delivers products or services within various contexts. It encompasses both the vision and mission of your enterprise. Without a clear business model, it’s unlikely you can create a business around a competitive and profitable proposition.
Examples:
I once ran a business that integrated existing software into a single platform for efficient management reporting. Our proposition was simple: many systems, one platform. This complexity gave us a competitive edge.
Another business I started in the ’90s offered “re-manufacturing” of used toner cartridges—delivering a product at half the price of a new one, with costs well below that.
2. Processes:
Processes are the structured pathways that guide your business operations, from procurement to production to customer service. Improving and refining these processes enhances product quality, profitability, and the work environment.
3. Precision:
Precision is about how efficiently your business operates. A great example is Hong Kong’s MTR, with its 99.9% on-time performance and impressive profitability. Precision in business ensures consistent and superior output, much like debugging software where even a minor error can lead to significant issues.
4. Repetition:
“If it ain’t broke, don’t fix it.” Repetition involves continuing with what works well in your business, like maintaining consistent product designs or customer service processes. While innovation is important, it’s also crucial to stick with proven methods until a new approach is clearly better.
5. Replication:
Replication is about scaling your business by creating the same successful setup elsewhere. Franchising is a classic example, where consistency across locations is key. Even if you don’t franchise, you can replicate successful components of your business, ensuring they perform equally well in new contexts.
Feel free to share your thoughts or experiences on these pillars. Let’s learn from each other!
Haron Wachira 