There are five business strategies that are at the core of all successful veteran entrepreneurship ventures. Execute these five strategies well. And you’ve just significantly boosted the probability of future success for your veteran-owned business.
Strategy #1: Understand the competitive landscape
As part of your business plan, you probably did a lot of thinking about the competitive landscape. Not just who the “major players” were in your industry. But also all the strengths and weaknesses of these players. That’s a vital part of having successful veteran entrepreneurship ventures.
One mistake that many veteran entrepreneurs make is assuming that certain businesses are somehow “bulletproof”. That they are impervious to the competition around them.
That’s simply not true. The huge, entrenched players need to keep a wary eye on all the fleet-of-foot. Agile startups around them, trying to disrupt their industry. And the small, tech-savvy startups need to find ways to build economies of scale. Before they are squeezed out of the marketplace.
Complicating things even further, competition is not “static”. It is, instead, something that is very dynamic.
How many times have you opened up a newspaper? Or read a story online. About a company that seemed to appear “out of nowhere” to take over a market?
It happens all the time.
Strategy #2: Make cash flow your No. 1 financial metric
Many veteran-operated small businesses focus too much on metrics like revenue or profitability. And not enough on cash flow. The reality is that all three of these metrics are important.
However, cash flow is the No. 1 metric for understanding the health of your business. Cash flow tells you if you’re converting sales into cash. It tells you if you have enough money to pay staff and keep the lights on at night.
So if you haven’t become familiar with how to understand and analyze the cash flow of your business.
Now is the time.
The statement of cash flows, in fact, is even more important than the monthly or quarterly P&L. The easiest way to think about this is that revenue or profit is just a snapshot moment in time. While cash flow is, as its name suggests, a “flow”.
It is something that you can track on a day-by-day basis. Maybe your suppliers are demanding payment in 30 days. But your customers are asking for payment terms of 60 days. That’s going to set up a cash flow mismatch that could cause a real liquidity squeeze. So you need to be able to spot this as soon as possible.
Strategy #3: Target niche markets before mass markets
The natural inclination of any veteran entrepreneurship ventures is to “get big fast”. Would you rather grab 1% of a huge, mass market or 50% of a smaller, niche market?
In today’s digital world, it’s actually easier to grab that 50% of a small, niche market. That’s because you can target your customer so much more effectively.
Think about setting up a veteran-owned business to sell t-shirts and other apparel and gear. You can either try to sell these t-shirts to the mass market. Or you can decide to only target a very specific niche.
Like former members of the military who enjoy shooting guns at the local target range. By focusing on this narrower niche. You become a lot smarter about what products you offer, and how you market them. Instead of trying to be all things to all people. You can just focus on members of your niche community.
Strategy #4: Listen to customer feedback and adapt accordingly
Today’s businesses are often built to launch in “beta” – before they are fully formed. The idea is that these businesses will adapt on the fly in response to fast-changing market conditions. And, more importantly, they will have their ear to the ground for customer feedback.
That’s because customers are the best source of new ideas for products, features and product line extensions.
This is where social media can play such an important role for veteran entrepreneurship ventures. On Twitter, you can see exactly what customers are saying about you, your company and your products. On Facebook, your fans will show you exactly how they are using your products. And on Instagram, they will show you how they perceive your company and what it represents.
You can use all of these data points to adapt accordingly. You’ll often be surprised at just how creative and innovative customers are. Let them brainstorm new ideas for you.
Strategy #5: Embrace change throughout your veteran entrepreneurship ventures
If there’s one constant in today’s business world, it is change. The pace of change has sped up exponentially in just the past decade. As a result, you need to build a company that embraces change. Sometimes you are the source of that change – but often times, the change comes from somewhere else.
There are ways to prepare for this change. If you are ahead of the innovation curve, for example. You can often spot new trends and ideas before they move into the mainstream. If you keep your eye on the competition. You can often see how they are adapting in response to market conditions.
The hardest part, of course, is to determine whether something is a real “trend” or just a “fad”. You need to establish and set up filters so that you can separate the signal from the noise.
The good new is that each of these five strategies can often be delegated to members of your team. The cash flow strategy, for example, can be handed off to your Chief Financial Officer (CFO) or finance team. The customer feedback strategy can be handed off to your product development team. The niche market strategy can be handed off to your Chief Marketing Officer (CMO) or marketing team.
That leaves you, as the CEO and founder of the company, to take full responsibility for the fifth and most important strategy:
Preparing for and embracing change when it comes (and it will most definitely come). You need to lead your team on a mission of success. That’s only possible if you are able to take a big picture view of your company. And how it fits within the broader industry to bring you successful veteran entrepreneurship ventures.