Insights into a successful strategy to start a business
At SIXT, we have years of experience working with the most diverse palette of corporate clients. Big corporations with thousands of employees in several places of the world, startups in the world’s most vibrant metropolises, one-person companies, and many more use our services regularly. In particular, we pay a lot of attention to emerging companies, closely listening to their experiences and needs. This helps us both finding new ways to improve our service and staying at the forefront of innovation. Here we share compelling insights about the right mindset and approach to start a business.
1. The right mindset to start a business: agility, flexibility, and resilience
Even before the COVID-19 pandemic, it was clear that the business landscape is characterized by fast-paced change and dynamism. Enduring forces such as accelerated technological innovation, globalized and highly interconnected networks, and the pressure of climate change were already stressing and stretching global economies and business systems. Now that some long-thought stable structures proved fragile, many companies were forced to recognize the importance of agility and flexibility. The more traditional approach of focusing primarily on financial performance and extreme optimization of business strategies proved insufficient. Although this ever-changing reality might sometimes feel overwhelming, it also provides a fertile ground for new business models and products.
There is no magic formula to build a successful business. However, the mindset with which a company is built lays the foundation of how it will respond to varying circumstances and change. Traditionally, the strategy to start and manage a business focused solely on maximizing returns in the short term based on models that establish executable plans from clear and predictable causal relationships. Reality has proven to work differently. New management styles can profit by including a multi-timescale perspective and embrace uncertainty.
“We can usefully define resilience as a company’s capacity to absorb stress,
recover critical functionality, and thrive in altered circumstances.”
– Martin Reeves and Kevin Whitaker, Harvard Business Review
Flexibility and resilience will take very different forms depending on the product or service in question. Some key points to take into consideration while developing a strategy to start a business are:
- Diversity. This translates into promoting structures and an environment that allows different ways of approaching, thinking about, and doing things.
- Modularity. Designing a product or workflow based on different elements that can fail without having the whole system collapsing is proven to provide significant advantages.
- Redundancy. Especially core business elements should have safeguards in case something unexpected happens.
- Embeddedness. A deep understanding of the system in which the company will perform helps design ways of aligning the company’s objectives to those of the broader system (for example, within its relevant supply chain, society, economy, and natural environment).
- Alternative company structures. Big gains come from experimenting with new company structures that are less hierarchical and more flexible.
2. Experimentation and Minimum Viable Product Approach
Another key point that stands out when setting up the strategy to start a business is the degree to which experimentation is envisioned to participate in the development process. More traditional approaches relied on working out an extremely detailed product design or business model – every single aspect needed to be planned. This results in very long development processes and implies the risk of drifting away from customers’ needs or preferences. A precious alternative is adopting a culture of experimentation and development through the minimum viable product (MVP).
“A minimum viable product (MVP) is the release of a new product (or a major new feature) that is used to validate customer needs and demands before developing a more fully-featured product. To reduce development time and effort, an MVP includes only the minimum capabilities required to be a viable customer solution.”
This means that, on each step, the product or service is tested, and the feedback is included in the next iteration of the product. Any discrepancies between people’s expectations or desires and the product will be detected early on. The risk of losing time and money in something that is not relevant can be minimized. This approach also ensures that the company starts capitalizing early on since a big focus is placed on minimizing the time-to-market (TTM).
Experimentation will take different forms depending on the type of business. Digital companies have the advantage of having at hand several tools that make data analysis and experimentation easier. But even companies that have nothing to do with the digital world can take advantage of developing a spirit of experimentation.
3. Build green
Sustainability is gaining momentum in the mainstream culture. It is well documented that customers are systematically changing their consumer habits to help reduce their environmental footprint. When starting a business, entrepreneurs have the perfect conditions to be part of the positive change that is so desperately needed. Although this might imply relatively higher costs or investments in the short term, the benefits are proven to be greater.
“The importance and perception of sustainability among consumers are increasing. The research confirmed almost one-fourth (37 percent) of consumers are seeking out and willing to pay up to 5 percent more for environmentally friendly products and are actively changing their shopping behavior to do so.”
Sustainability practices can be applied in several business decisions and actions. The objective should be to always minimize the impact that the company has on the environment. This starts, of course, with the production of the product or service that the company wants to sell but goes beyond that. When starting a business, it is important to think about investing in green alternatives to maintain the offices, packaging products, and solving transportation needs. Some additional benefits of taking an approach that cares about the environment are:
- Reducing energy costs
- Enjoying tax incentives
- Better brand image
- Anticipation of stricter regulations
4. Choose the right partners
Any company is part of a network. Whether in the supply chain of the production of a product, the office supplies, or to solve the transportation needs, a company depends on others. The capabilities that each partner offers will significantly influence the possibilities that a company has to thrive. Partners that cannot accommodate innovation will most certainly limit the chances of experimentation, reaction, and ultimately growth. When starting a business, it pays off to select companies that share this flexibility, agility, experimentation, and resilience approach.
Considering all our learnings with our corporate clients, at SIXT, we have developed a service that seeks to offer the best way for companies to solve their transportation needs. We are committed to helping our partners thrive under any circumstances. For example, we help our clients:
- With the best technology that allows for quick rental and avoiding unnecessary bureaucracy.
- Offering a big palette of flexible rental modalities to accommodate the most diverse needs. For example, our customers can opt for short or long-term vehicle rental, car-sharing options, paying for a taxi ride, and car subscriptions.
- Helping companies save money by paying only for the transportation service that they need freeing up capital for other purposes.
- Creating tools to easily monitor expenses saving time.
- Offering an environmentally friendly alternative to solve transportation needs.
The business landscape is constantly changing, and entrepreneurs that seek to start a business in such conditions can gain from embracing these conditions. While planning under uncertainty might initially pose enormous challenges, it actually offers fertile ground for innovation if approached with the right mindset. Having a long experience working with corporate clients, we offer insights into developing the right mindset when starting a business. First, it is crucial to create a strategy that supports flexibility, agility, and resilience. Companies have a lot to gain from developing a strong culture of experimentation. We also emphasize significant gains of building green companies that, from the beginning, are designed to be sustainable. A company should be considered part of a network. This is why choosing the partners that help thrive is an essential determinant of success.