8. Toolkit—Tools to Develop Core Business, Growth, and Sustainability

‘Co-evolving’ brings with it the idea of growing our business with others to be relevant to an expanding world. If our business idea is not relevant, it is unsustainable. It is like the seed thrown on stony ground; it will fail. All businesses need resources to feed on to thrive. In economic terms, these are sometimes called the ‘factors of production’: land, labour, capital, and entrepreneurship.¹ Labour refers to what we today call human resources, and capital is the money or financing required to keep the business afloat, pay suppliers and employees, and reinvest in the business so that it can grow and prosper for its owners and shareholders. Our last resource, entrepreneurship, is us, the people with the drive, attitude, and innovation to start and run a successful business.

The third quadrant of the SHAPE Business Model Canvas is a tool to help entrepreneurs to think about their business’s resources and operational needs.

Any asset that can be transformed or consumed to produce a particular benefit can be considered a resource. In this chapter, a business resource refers to any tool or asset the entrepreneur uses to establish, manage or support the organisation’s operations. This can be a human or any other type of resource or asset, both tangible and intangible, that is mobilised by the entrepreneur in the process of building a business, organisation, or another initiative. The effectiveness of each resource varies depending on the way we—the entrepreneur or owner—employ it in our business operations, as well as on our knowledge and understanding of the resource.

This chapter classifies resources into human, information, physical, financial, and space and time that are seen as critical for our business. But the important question is: What resources do our business need?

When we start to grow, we need to work ‘on’ our business, and not just ‘in’ our business.

After the initial survival stage, the owner’s objectives could be, among others, to (Fig. 8.1).

A schematic of business owner objectives comprises 4 steps illustrated as bubbles. The bubbles are labeled as follows. Get more customers, develop a wider range of products, reduce costs through better production methods, and employ the correct people to ensure ongoing delivery.

These things require us to work on the business by bringing in the right people and motivating them to do the right things. From time to time, we may still need to get on the phone and search for customers, meet with suppliers, and get involved in the actual production of a large order. But we need to learn to hand over work to others, delegate, and hold them accountable for achieving that work.

Trying to keep a business going when it does not make a profit is like banging your head on a brick wall. At some stage, we need to admit that we need to do something else; change our strategy, or maybe even throw in the towel altogether and try some other business. Since businesses do not usually succeed overnight, we need to recognise when it is time to change. We also need to be careful not to throw away some aspects of our business that might be worth saving.

To ‘pivot’ means to change direction. We don’t throw everything away and start over again; we build on what we’ve learned so far. The tricky part is knowing when to pivot. Usually, when we see that a product experiment or an unproductive product development is not bearing fruit by way of additional sales and customer enthusiasm, it may be time to pivot.

It takes courage to pivot. In some ways, it is admitting that some aspect of the business has failed, and no one likes to do that. So, we try to keep going with the same strategy, only to get the same results. Ultimately, some companies fail because they are hesitant to change direction.

We need to take a long cool look at our business before deciding when or if to pivot. This usually entails getting our product development and business leadership teams together for a meeting (or three) to discuss what is going wrong and ways to put the business, or part of it, back on track. These meetings must be presented with hard facts: data that tells a story about which products or business units are doing well and which are not. Has the business lost sight of its core customers and their needs? This type of strategic meeting is useful from time to time, no matter the size of our business.

Eric Ries lists what he calls a ‘catalogue of pivots’.² Table 8.1 shows descriptions of different ways to change direction. There is no set formula to follow; different pivoting strategies will apply at different stages of the business lifecycle.

As is evident in the table, there are many ways to pivot; the important thing is the strategy behind the pivot: Why are we doing it? Every situation is different, so there are no rules about the best strategies to adopt. Whichever strategy we choose, a pivot needs to be carefully considered and will need the resources: manpower, money, machinery, whatever, to make it work.

One of the first things a business must do is raise money. But as every new business owner soon discovers, this is not as easy as simply applying for a bank loan (although that may be one strategy). Businesses need cash to start up. There are several sources to consider when looking for financing, and it is important to explore all the options before deciding.

The people in our ecosystem are the most valuable resource we could have. Our collaboration: co-initiating, co-sensing, co-inspiring, co-creating, and co-evolving will greatly determine the sustainability of our business.

To scale our business, we must give responsibilities to other people. This is called delegation. In other words, we need to start building a team.

Forming a team may mean bringing in a partner, employing one or more people to assist, or hiring a freelancer with the skills that we need. These three tips can help us find the right mix (Fig. 8.2).

A schematic comprises an inset of the labor law-related information that reads as follows. Be Clear About Your Business Goals, Follow Good EMployment Policies, and Establish a Strong Company Culture.

We need to know what we can do personally and what we need others to do. If we need a team, should we contract people or outsource them online through a freelancing service?

The concept of ‘staff on demand’ is becoming a lot more common, even in large organisations. We could perhaps ask ourselves if it is better to pay someone to do it once (for example, a cleaning service to come in to clean our offices), or is it worthwhile to hire someone on the company payroll to keep on doing it?³

Here are some technology businesses that specialise in offering needed services to small businesses:

Many inputs are needed to deliver a product or a service. These inputs are called supplies or raw materials, and the people we get them from are called suppliers. Traditional value chain approaches sometimes do not consider the follow-up services required to support a product after it has been sold (Fig. 8.3).

A schematic of the value chain model. At the top is a row of arrowheads that are labeled as follows. A, source. B, market. C, sell. D, supply. E, manufacture. F, deliver. G, follow-up services. Below this are 7 bullet points explaining the aforesaid main aspects of the model.

At this point, we should look at the cost of each step in the value chain and work it back to a cost per product. This will allow us to get an idea of the product cost. By adding the margin, we will have an idea of the price at which we need to sell the product to avoid losing money.

The second layer of the value chain (support activities) looks at how the company supports each step of the primary production activities through procurement (the buying or purchasing function), technology, human resources, and organisational infrastructure. For most small businesses, at the start, the entrepreneur is all of these things, but over time, as the business grows, other people get added to the team.

We can do the above value chain analysis by examining the functions under each aspect listed below.

The infrastructure (management, premises, transport, and so on) needs to be put in place. The aim is to have the minimum infrastructure to deliver the product and service and look carefully at how to expand into the future.

Most entrepreneurs use trial and error to find solutions that will work best for them. But we can increase our likelihood of success if we rationally and systematically decide on the best strategy for our start-up.⁴ This requires us to think of our business as an experiment in which we constantly test our assumptions and make sure that they work for our customers. If we can attend to all the issues that our customers have with our business, we will make massive progress towards giving them a product that they want to buy.

Sales are the lifeblood of any business, and we need to live by the mantra, always be selling. We are constantly selling our business to customers, staff, suppliers, banks, and our friends and family. We need to always be positive about our business because if we are not, no one else will be. Even if times are tough, we need to remain optimistic.

The staff that we employ to sell should have clear targets more than what we pay them. We should work out a commission structure that motivates them to perform.

We should focus on the following (Fig. 8.4).

A schematic lists 4 bullet points as follows. Always listen to our customers. Understand what our salespeople are selling to our customers and make sure that it is something that we can deliver. Create clear product information. Make sure that we follow up on our potential customers.

Once we have started to sell our product or service, we may realise that our customers have other needs. This should encourage us to experiment and slowly but surely transform our business to become more relevant to our customers.

We can introduce new features to existing products, new products to existing customers, or try to make products ‘on paper’ and get people to buy them before we even produce them. By testing new variations, we can select the ones that perform best and make more of those.

The same goes for our marketing. We may find that social media works well for marketing our product, but also try a print advert and see what the response is from that. We will be required to do more of what works, and less of what does not work or does not work as well.

The top two barriers identified by youth entrepreneurs relate to access funding and own personality traits. It can be argued that developing personality traits of creativity, innovation, resilience, and ability to take risks and proactively search for, and act on opportunities, are key to changing the view youths perceive funding needs for enabling entrepreneurial action. With many free services and support being offered by role-players in the youth entrepreneurial ecosystem, as well as online resources, the perceived obstacle of the need for funding can be mitigated. The ability to understand problem-solving solutions to pivot business ideas when flexibility is required relates to the development of internal domains. The current and relevant situation where the world of work is moving towards requires fewer physical resources like office space and a full range of office equipment. Digital developments enable youth entrepreneurs to enable their entrepreneurial initiatives by integrating various online platforms with electronic devices like laptops and phones and replacing costs that would have been spent on a traditional office setup. Creative and innovative abilities are the new currency driving access to funds.

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