Want to Start a New Line of Business? Next Steps
Are you thinking about building a new business? Unsure of whether you are ready to invest? Not clear on the business model to pursue?
We are facing these questions ourselves as we think about creating a new line of business. In order to convince ourselves that we are ready to invest, the first thing we need to know was, what does a duck look like?
The first major challenge for any company looking to launch or expand its business is to define its target customer. For us, the old saying, “If it walks like a duck and quacks like a duck, then it must be a duck” is our motto.
In our current lines of business, we have a well-tuned sense of our target customers and opportunities, earned by years of experience. For example, if a potential new fee-based consulting client crosses our path, we know exactly what questions to ask in order to prioritize that customer. Those questions include:
- Is the client a C-level executive (ideally, CEO, CFO, COO or CSO) at their company?
- Is the client’s company large enough to support our fee structure?
- Is the client looking for thought leadership, or just extra arms and legs?
- Is the client in a situation that is ripe for us to help? (i.e., is there a sense of urgency and a clearly defined need we can serve?)
And so on. We can predict the odds of a successful, mutually profitable engagement based on the answers to those questions. Furthermore, we communicate those questions widely throughout our firm so that everyone knows what the duck looks like. No sense having the team bringing us rabbits when it’s duck season!
Note, by the way, that no client situation is a perfect “duck.” Every duck has blemishes, some more than others. We tend to find ourselves with many more potential clients and opportunities than we can pursue, so we must be ruthless about prioritizing our time and investment in them. We do ourselves no favors when we get overexcited about a potential client and ignore the blemishes.
As we begin to consider entering a new line of business, we have to challenge ourselves to be just as precise and thoughtful about what our new duck looks like. We are currently building our list of “duck” criteria. As we gain more experience those criteria will undoubtedly change, but it is important to have a solid starting point.
When we are confident in the answer, we will be on our way to building a great case for investment.
What has been your experience in building a business? How well have you defined your “ducks”? Please let us know in the comments below or email us at email@example.com.
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