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Entrepreneurs, startups and existing companies alike can get trapped. They get caught up in the idea of continuously expanding products and services and losing focus on their core business. This is an easy trap to fall into, especially when faced with uncomfortable situations such as declining sales, market pressures or losing key employees. Instead of grasping at course corrections, the answer often involves returning to the business’s core mission. Unsure about your company’s core product or mission? Start with simply asking which service or product has been the workhorse leading sales or generating the most opportunities. If the business core cannot summarize it in one sentence or phrase, there is a breakdown of what the business is presenting to its audience.
Why is it important to define the core business?
In the struggle to consistently innovate, stay relevant and constantly grow, many companies lose sight of the vision that originally propelled their growth. Others assume that constantly proposing new ideas, services or products will drive growth and open new categories. Businesses of all sizes are not exempt from this thinking. Many have viewed successful companies that have disrupted multiple categories as a guide for their companies. The truth is, especially for new startups, that properly developing a business core and understanding the problem it is solving is complicated enough without clouding it with other endeavors. This is not to be confused with competitive strategies or varying marketing efforts for the key audience.
The core is critical — determine the absolute core of what the true product or service of the business is and how an audience interprets and understands it. Other companies in a particular space or industry may temporarily enhance their marketing with new offerings. And, big spends and big-name hires, but they all need to center around the core. When a business does that, it can capitalize on consistency, consistency and more consistency.
Definition and details matter here. Defining the core business and steadfast consistency to that core increases the business’s survival. This core defines the market, the audience, processes and the ultimate problem being solved by the company. Additionally, it is more than determining the best product or service with the most profitability and consistently marketing and selling. It also focuses on the core competency of the business and the team in that business. Also, determining the most straightforward path to the audience the company serves will ensure that when changes are necessary, they are strategic.
Defining the core business allows the company to pursue clear marketing and make decisions confidently that are on brand. Think about all of the businesses that immediately say yes to trends to boost sales. Yet, the project is not among their core competencies. By throwing good money after bad, it prevents them from scaling up. Clearly focusing on the business’s core, management and team members alike can more rapidly make decisions, work together, spend intelligently, scale appropriately and take on the competition.
Once a business gets clear on its core, they can start building the rest of the framework. They will also need to include a clearly defined brand strategy and possibly a market disruption strategy.
Related: 6 Steps to Adopting Core Values That Stick
How to define the core business
The more clearly defined the core business is, and with complete buy-in from the team, the faster it is to reach a more substantial competitive advantage and speak more directly with the market audience.
Start with the fundamental questions, such as what is it that the entire team produces well? What do individual team members produce that customers want more of and consistently purchase? Think more about customer experience and not just the goods and services. One of the best examples is the massive shakeup of Apple by Steve Jobs, starting in 1997 after the acquisition of NeXT. As Apple’s board brought Jobs back on as an advisor, he began one of the most famous corporate restructuring efforts. He canceled the majority of Apple’s products to take Apple back to the fundamental core of product offerings.
Next, evaluate what differentiates your business from others in the industry. In a crowded space, everyone can offer similar solutions. So what makes your business unique, and is it profitable? If on price alone, it is a race to the bottom? If on services, experiences, quality, disruption or other differentiating deliverables, how are you showingcasing those differences? Invest both time and money into areas that produce revenue and support the unique branding. More importantly, tell the story effectively without giving up the secrets to how the business is different. Or better yet, let the success speak for itself, leavings wondering how it has been competitors.
Ensure your brand’s story is being received in the manner you intend to communicate it. Is the business at a stage where the in-house marketing efforts tell the story? If so, invest time in this process. A clear definition of the audience that best benefits from the product or service, then accurately targeting that audience is critical for this step to succeed. For example, most businesses run social media ads in a targeted geographic area, thinking their market is within a certain distance of their business. Without truly understanding the characteristics of their target audience, a company may not need to make these spends at all. Another path, such as strategic alliances with other businesses, may better serve their growth goals.
Related: How Establishing Core Values Drives Success
Consistency, consistency, and when in doubt, more consistency!
When in a panic due to declining sales or changing market conditions, companies of all sizes try to throw everything at the problem. This includes drastic changes, increased marketing spends, budget cuts and layoffs. Even in profitable times, businesses establish the mindset of more change, sometimes for the sake of change, without clear objectives.
By clearly defining the core business, companies can focus on why they exist. Why they do what they do and the problem they solve. By determining the core business, companies avoid distractions or side projects that require time, cause confusion, additional spends and disrupting itself in the market. It is hard enough to grow a business and stay focused, and sometimes a company becomes its own worst enemy. The core business must always be clearly and quickly defined and repeatedly communicated with partners, vendors and customers.
Related: 3 Steps to Establish Authentic Core Values