Successful businesses apply principles, models, strategies, and patterns to attain their goals. However, establishing these business principles can be a complex process, sometimes taking years to perfect.
Every entrepreneur aspires to run an organized and efficient business, but mastering such a broad and diverse range of tasks is a challenge that few overcome.
Even without adhering to specific patterns or models, businesses can still be profitable, which is why streamlining operations can be a daunting task. Regrettably, until a business begins to organize itself around key principles, a growth ceiling will always exist, hindering its ultimate success.
Implementing robust business principles can lead to exponential growth, significant breakthroughs, and a more effective business, regardless of its size.
If you’re new to the concept of formulating models and patterns, let’s begin by identifying the fundamental principles of your venture.
What is a Business Model?
Broadly speaking, a business principle outlines the functioning of your business.
“A business principle provides a framework for how an organization generates, delivers, and captures value, whether in economic, social, cultural, or other contexts. The process of creating and modifying these principles is also known as business model innovation, and it’s a crucial part of business strategy.
In both theory and practice, the term ‘business principle’ is used to describe a wide variety of informal and formal representations of a business’s core aspects. These include its purpose, business processes, target audience, offerings, strategies, infrastructure, organizational structures, sourcing, trading practices, and operational processes and policies, including its culture.”
-Wikipedia, adapted for context
Discovery
Phase
- Identify Pain Points
- Define A Model
A business model is the core logic by which the company creates, delivers and captures value. Model’s define exactly how a business functions, along with how it generates revenue.
- Architect An Operating Pattern
An Operating Pattern defines reproducible steps to solve the identified pain points from an internal perspective. What operations need to take place to fulfill our business model? Can these operations be abstracted into a simple, repeatable pattern?
- Create An Ecosystem
Operating with consistency is important for all stages of a business. Making time-effective choices and patterns that the business can reuse will impact the output of your operation tremendously.
In order to have successful patterns and procedures in place, it is extremely important to keep accurate and up-to-date documentation. Any process you may need to delegate or repeat over time is a great candidate for being documented to ensure quality/consistency.
Strong documentation leads to effective delegation, which results in consistency over time.
Every business should strive for consistency.
Reducer Pattern
- Waiting
- Motion
- Defects
- Inventory
Whether in the form of raw materials, work-in-progress (WIP), or finished goods, inventory represents a capital outlay that cannot yet produce income. The longer a product sits in one of these states, the more it contributes to waste. The smooth, continuous flow of work through each process ensures excess amounts of inventory are minimized.
- Over-Production
- Documentation
Toyota is famous for its waste reduction process, known as the 3M Model.
- Muda – Waste
- Mura – Unevenness or Variation
- Muri – Overburden
“Muda is a Japanese word meaning: futility; uselessness; wastefulness
and is a key concept in lean process thinking, like the Toyota Production System (TPS) as one of the three types of deviation from optimal allocation of resources (the others being mura and muri). Waste reduction is an effective way to increase profitability.
From an end-customer’s point of view, value-added work is any activity that produces goods or provides a service for which a customer is willing to pay; muda is any constraint or impediment that causes waste to occur.”
– Wikipedia
To achieve success in business, it’s crucial to adhere to the principle of maintaining accurate and current records. This principle of business not only fosters effective delegation but also ensures operational consistency over time, a goal every business should aim for.
The business principle of consistent operation is vital at all business stages, but it’s particularly essential for start-ups. Making decisions that save time and establishing reusable patterns can significantly enhance your business’s productivity.
The principle of reusability allows your business to optimize output effectively. By strategically managing your resources and reducing waste, you can transform the workload and boost the efficiency of your partners and employees.
