I know. This sounds like a lame question but it really isn’t. In over 20 years of working for and with businesses in almost in every sector you can imagine this is the question that trumps most up. Here is why.
The key component is the one asset a business owns and/or controls that gives it a competitive edge in the market(s) within which it operates. Based on the strength of this competitive advantage a savvy entrepreneur or business person might be able to build an operating company in one market and generate enough value to expand into other markets. Of course, having a key component that provides a competitive advantage can lead to the creation of a product offer but that doesn’t mean the market will consume it or that all the risks inherent in the business will be managed and mitigated but that is the general idea behind any business. All businesses start with a key component. What is yours?
- What competitive advantage does it provide? In which market(s)?
- How do you turn that advantage into a product?
- How do you get the consumer to consume it?
- How do you identify, manage and mitigate the risks?
- Does all the above create value for you, the entrepreneur? Investors? What kind of investors?
In the ROKC method, Return On Key Component, this is how we approach business – 6 questions – because we know that businesses work this way and have done so for thousands of years. So why mess with something that works?!
How do you answer those questions, in just that order? We would love to learn about your businesses.