Everyone going into business has big dreams and bold ideas. In fact, a big part of why a lot of businesses fail within the first few years of launching, is the desire to start big, which is not always feasible for everyone. That’s where the minimum viable business comes in.
The minimum viable business or MVB is the smallest size/scale business that earns revenues predictably (revenue per time period) and repeatedly (operating the same plan consistently), and is achieved within the shortest time and using the lowest cash. This is applicable not just for start-ups but for businesses seeking to grow as well.
The crux of growth is establishing an MVB with efficient and profitably repeatable sales processes. Startup or otherwise, if your processes for sales are not clearly understood, cost too much or are too complicated to repeat, then you do not have a foundation to expand in any manner.
There are many benefits to establishing a MVB. Some of those benefits are:
All businesses start out as experiments to build proof, proof that the business solves a problem and has “Big Business” potential. That’s where the MVB comes in, to validate that the business model is profitably scalable. By starting out with a core product/service, the business is able to create Proof-of-Business, to demonstrate that business has a viable operating model and revenue model through achieving consistent and predictable revenues.
It’s the new clothing store that starts out selling only plus size work wear, that is able to build a client base and generate recurring revenue before expanding into gym wear and underwear. They create a viable business model that becomes the foundation of the business and enables a sustainable growth path.
Faster Business Development
Most start-up owners create an extensive business plan which often includes a selection of services and/or products which span a range of audiences and take time to develop. The reason many start-ups fail is due to trying to launch with a full range of products and services which creates more risk for the business.
An MVB, allows for the streamlining of your sales process, using your core product or services. This allows you to more quickly establish your customer base, build your business awareness and allow for the introduction of add-on products or services.
On a similar note, the less you develop your plans, the less risk there is. If you plan a business around 20+ features and a central audience, how do you know that each service will be used in enough abundance? Quite simply, your model could fail under the weight of its own extensions.
Perhaps the audience doesn’t actively need these extra services, or the business just isn’t established enough to generate the trust. In either case, an MVB offers the best of both fast and slow approaches. Your business can launch more quickly and you can use active, real-time feedback to better plan the next priorities.
What’s important is that, at each step, you’re assessing and analyzing results.
MVBs are agile, adaptable and ready to pivot if needed. Don’t be afraid to make changes as required. By stripping down the company to core features, you’re able to make more rapid changes due to public response, market changes or any other developments that might happen.
Easier Return on Investment
One of the key benefits to establishing your MVB is your return on investment (ROI). The MVB looks at speed, minimal budgets and being ready to adapt to any challenge. With an MVB you’re:
The Minimum Viable Business is an essential business model for business owners and start-ups. It keeps resources light and enables a business to focus on maximizing value from the very beginning.