HOW TO PUNCH ABOVE YOUR WEIGHT
SOME of the most successful businesses are also some of the simplest ones. Not
necessarily simple because they have a simple product or service to sell,
but simple because their business model is straightforward. They know what
they are selling, to whom they are selling, and what customers want.
Think of Starbucks, Amazon or Easyjet. All deliver a very clear message about
what they are selling and what customers can expect in return, and
consequently all have a very clear route to market.
Chris West, business adviser and author of the Beermat Entrepreneur books,
said: “Speak in a language that ordinary people can understand. Use proper
English, rather than this awful managementese that some people use. If you
have to use a technical term explain what it means.
“And do the same on your website. Don’t have terrible animation that takes
minutes to load up, just have nice clear simple stuff so that people can get
information immediately. Unnecessary complexity turns customers off very
quickly.”
He said the secret was to put yourself in your customers’ shoes, especially
when the product is highly technical. “People who understand the technology
think they are selling to other people who understand the technology as
well, but often that is not the case. Often the customer just has a problem
that they want solved. They don’t want to know how the product does that.
They are not interested. They just want something that works.”
The fad for multi-functional gadgets, notably mobile phones, can be extremely
misleading to someone starting out, he said. “We seem to be living in a
world where someone somewhere has decided that multifunctionality is the
order of the day. But if you are going to crack a marketplace there has to
be one really good reason why people are going to buy your product. For an
entrepreneur looking to start a new idea, the mobile phone is a very bad
example.”
Daniel Brock bought an old run-down cinema in Hamp-stead, north London, six
years ago and turned it into the Everyman Cinema club, which he hopes will
be the first of a chain.
He has chosen to keep his business model simple by focusing not on the films
shown, as one would expect, but on the service provided. The cinema has
sofas and tables instead of chairs and customers can order drinks before and
after the film by pressing a button on the table.
Brock said: “I had an inkling that the opportunity in the market was about
keeping things simple. The simplicity of the Everyman Cinema club is that it
is customer-focused as opposed to film-focused. We are primarily a
hospitality company that happens to have film as one of its products.”
He added: “You have to understand where there is a gap in the market. There is
no shortage of cinemas, for instance, so there is no gap in there. The gap
is in what they don’t do, which is service and experience. And that is what
we offer.”
John Thompson, national business advisory partner at Baker Tilly, an
accountancy firm, said a good way to find out if you had created a simple
business was to try to explain in one sentence what your business is about.
He said that on one occasion he had asked 13 directors of an established
business to do this – and got eight different answers. Their chairman was
furious.
“If you’re trying to build a business you’ve got to be able to articulate very
simply and very clearly what it is that you do,” he said. “Your marketing
messages must be consistent.”
Thompson said that simplicity should run right through an organisation. “You
need to have a clarity of message and clarity of purpose so that everyone in
the business understands what they’re doing and how they’re doing it. If you
keep it simple, your staff will understand what’s expected of them and
they’ll work more efficiently.”
Mark Riminton, director of Shirlaws, a consultancy, said that keeping it
simple would not just help your customers, it would also help you, the
business owner. “Simple is easy. Complicated is difficult. That is really
the bottom line,” he said.
“The product doesn’t necessarily need to be simple – there are lots of
software companies that have very complex products – but the business model
needs to be simple so that you understand and other people understand how
you are creating wealth and adding value.”
Riminton said that one way to keep a business model simple was to focus on a
particular defined market. He uses as an example a firm of accountants who
only provide accountancy services for advertising agencies.
He said: “The business model is simple because they don’t have to worry about
whether working for a porcelain manufacturer is right for them – because
they simply know it isn’t.”
