At the earliest stage after start-up, most businesses are prepared to try anything in order to grow.
Once they become an established SME, however, many owners become conservative. All too often, this holds the business back and prevents it reaching its full potential.
Theories for Smart Business Experimentation
“Move Fast and Break Things”. “Agile Working”. “Test and Learn”. We’ve all heard these business mantras but most business owners regard them as belonging to expensive management consultants, tech gurus and big corporations. In fact, it is small and medium size business which is the natural home of these approaches.
The Move Fast & Break Things Approach
‘Move fast and break things’ shot to fame as an early mantra of Facebook. Consequently, it has become somewhat infamous as the social media giant fell out of favour due to its corporate behaviour.
A common misinterpretation is that this strategy means gaining innovation through chaos and mess. What it actually refers to is a strategy of experimentation, rather than ‘perfecting’ a product before releasing it to the market. This does, inevitably, mean making mistakes – and learning from them.
For many business owners, it is all too easy to get caught up in endless planning as you look to introduce a new service or product. You want a flawless result that your customers will not be able to fault. Perhaps you should not be afraid to launch a bit earlier? Then, listen carefully to what customers think of the product and improve it accordingly.
Small & Medium size businesses can move fast: this is one of their key advantages against larger corporates. As to breaking things, this should be done within a defined framework for experimentation.
Lela Dragani?, an expert in A/B testing theory at Croco, says: “A strong culture of experimentation in your company and few barriers to testing will help your employees loosen up. You want them to be willing to risk, experiment, innovate and accept mistakes as a part of your growth strategy.”
The Test & Learn Approach
A slightly more nuanced approach to growth through experimentation, ‘test and learn’ is likely to strike more of a chord with innovative businesses. It is a more internal-looking approach than the ‘break things’ system, and revolves around building an experimental, innovative mindset within the business.
As your staff get behind this working culture, their creative potential should come to the fore. In a culture where it’s ok to be wrong provided that you learn from it, your workers on the front line will feel free to bring forward suggestions for improvements. With many creative minds empowered to try things, your business should start to evolve.
As in the natural world, you will need a selection mechanism to ensure only the best ideas survive through to full production. Tools such as CRO, Mobile and Content strategies provide the digital environment for such testing and feedback. However, you must remain open to many different areas of experimentation – otherwise, you will just build a new form of static culture.
Author and businessman Gabriel Weinberg says: “It’s hard to predict the traction channel that will work best. You can make educated guesses, but until you start running tests, it’s difficult to tell which channel is the best one for you right now.”
How Invoice Finance Can Fund Experimentation
Invoice finance is a great way to raise money for investing in growth – especially the kind of steady, organic growth that an agile, experimenting company enjoys.
On the one hand, Invoice Finance provides immediate funds up front, every time you deliver an order. As these orders grow and your business becomes more ambitious, so too does the cash available. With this kind of funding behind you, you no longer need to worry that a big new order will be more trouble than it’s worth. You know that you will get the money fast and can immediately re-invest it.
On the other hand, your business is not committed to growth. If at first it doesn’t work out, you don’t have to meet set loan repayments for the rest of the year. Each time you get money up front, the slate is wiped clean when your customer pays the invoice.
Your company has to be lean and agile to make an experimental development process possible. This means you and your employees need to be liberated enough to experiment and launch fast; but also be committed to seeking and acting on customer feedback, adapting products and services accordingly.
No business can test, adapt and launch exiting new products without funding… but it can’t be liberated if its finances tie the business to a fixed trajectory either. With a flexible, Invoice Finance provider, your finances can be as agile as your company. Call TIMFinance today to find out more.