Is your business fit for purpose?A fit for purpose business is in the right market at the right time. It has the right pricing structure, the right people in place and systems to make sure the business delivers today and in the future.
One of the biggest mistakes when developing new businesses is to write a business plan, create lengthy financial projections, and immediately dive head first into executing the plan. This only maximises the risk of failure since in many cases you’re launching a service that clients don’t want and their business model can’t support.
Building something nobody wants is the number one reason for new business failure and it’s no different for design businesses. But even if you do build something that clients want, you can still fail to build an appropriate business model around it. So before you begin executing on that “next big thing” you need to test your ideas to be sure you’ve achieved the proper fit with the market and for your company.
Problem-Solution fit,
Product-Market fit, and
Business Model fit.
If you achieve all three you’ll have a studio that adapts to change, leads the pack and sets an industry direction.
This occurs when you’ve analysed the industry sectors where you have deep expertise (your Pillars). You then conducted face-to-face research that shows clients care about specific jobs to be done (your services); pains, and gains (your pitch). To reach this stage you’ve proved the existence of a clients’ problem (eg. falling sales) and have a design value proposition that addresses your clients’ job needs, pains and gains (your positioning).
Perhaps you have developed an integrated campaign that will help sell their product. This is the job to be done. You have also identified the pains that the client has; for example an under motivated sales team that you will fire up with a creative campaign. You have also identified that the gain the client will get is increased sales and more motivated sales people. Unfortunately you still don’t have definitive proof that your client cares enough about your value proposition to buy it.
Typically you will examine your problem-solution fit with an empathy map and a design value proposition canvas.
This happens when you have proof that your design value proposition is creating value for your client by doing the jobs they wanted done while lowering their pains and improving the gains they wanted.
You now have a product (design thinking), some tools (empathy mapping, value proposition canvas) which are beginning to get acceptance in the market. However you need to do an iterative process of running this process with other clients. This will prove or disprove the various assumptions underlying your design value proposition.
The business model fit occurs when you have proof that your design thinking process is embedded in a profitable and scalable design business model. You’ve done the research, trialing, pivoting and retrialing of your design value proposition to prove it creates value for your clients. From this you have built a design business model that creates value for yourself and your team. You have found the right business model that delivers optimal profitability.
Putting these three types of fit into your studio requires a deep dive into your business. We have created the Happier, Healthier, Creative Business Canvas to do just this. You use this canvas to test your fit by setting three scenarios;
Are your services matched to clients needs? (Services)
Can you clearly express your market positioning? (Positioning)
Have you questioned your business model is working? (Business model)
The tools and analysis behind each of these (Services, Positioning, Business Model) help you analyse if your business is fit for purpose.
Want some help with this. Contact Greg to discuss how we can help you develop a fit for purpose business.
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Greg Branson
Greg’s passion is the research and development of methods that improve design management and the role of design in business.
Greg has developed The Design Business School to help owners manage their business better along with showing designers how to get more involved in the studio and develop their career path. Contact Greg.
