How to cre­ate a sus­tain­able busi­ness

South Shore Breaker - - Sports - LIAM TAYLER BREAK­ING BUSI­NESS DOWN liam.tayler@smes­o­lu­tions.ca

I led a class last week at the Aca­dia Entrepreneurship Cen­tre in Bridge­wa­ter, which was on the ‘Lean Can­vas’ busi­ness plan model.

This model breaks up your busi­ness idea into a number of small, man­age­able el­e­ments and is a very good way to start or­ga­niz­ing your busi­ness con­cept.

The one el­e­ment that struck me as I pre­pared for the class was how easy it was to fall into the trap of be­liev­ing that your busi­ness will de­velop ex­actly as laid out in your busi­ness plan.

I was re­minded of a time when I lived in Ghana, West Africa, where we used to reg­u­larly drive through what we re­ferred to as the ‘Pil­low Vil­lage,’ fol­lowed by the ‘Mat­tress Vil­lage,’ fol­lowed by the ‘Fufu Vil­lage,’ where in­di­vid­u­als set up shop on the side of the road to sell their spe­cific goods. We imag­ined the sce­nario where one in­di­vid­ual thought, “I’m go­ing to sell pil­lows,” then their neigh­bour thought, “Hey, he’s do­ing pretty well sell­ing pil­lows, I’m go­ing to sell pil­lows, too!” fol­lowed by his neigh­bour and so on and so forth un­til the en­tire vil­lage is sell­ing iden­ti­cal pil­lows on the side of the road. How­ever, at some point, one ven­dor will drop his price, which means oth­ers will fol­low suit and soon the prod­ucts be­come ‘com­modi­tized’ and there is not enough mar­gin to go around.

Al­though very well il­lus­trated in the ex­am­ple above, the same premise ex­ists through­out the world … How do you en­sure your prod­uct does not be­come a com­mod­ity and your busi­ness un­prof­itable?

This is a very per­ti­nent ques­tion in Nova Sco­tia as the his­tor­i­cally prof­itable wild blue­berry busi­ness model is be­com­ing un­sus­tain­able due to over­pro­duc­tion. For some farm­ers, they can’t even charge enough to jus­tify har­vest­ing their crop and so it just sits there rot­ting. In the United States, the Maine gov­ern­ment agreed to pur­chase nine-mil­lion pounds of berries this year just to prop up the mar­ket.

There are quite a few op­tions the en­trepreneur can look at to ad­dress this is­sue, but for me, there are three key el­e­ments (us­ing blue­ber­ries, wild and cul­ti­vated, as an ex­am­ple).

Iden­tify a niche

Spe­cial­ize your prod­uct to en­sure that you stand out from your com­pe­ti­tion. Grow only a va­ri­ety that is spe­cific to cre­at­ing blue­berry wine or has a high level of an­tiox­i­dants for health prod­ucts. If pos­si­ble, look for other mar­kets, such as ex­port.

Add value to your prod­uct There are many ways to add value to a prod­uct: make it more ac­ces­si­ble, make it cleaner, make it into a long-life prod­uct or trans­form the prod­uct in some way.

For blue­ber­ries, if ev­ery­one is sell­ing them fresh, then freeze them; if ev­ery­one is sell­ing them frozen, then make jam/wine. It may take a lit­tle more in­vest­ment, but you will stand out from your com­pe­ti­tion.

Part­ner with other in­dus­tries

If your spe­cial­ity is do­ing one thing well (grow­ing blue­ber­ries), then rec­og­nize your lim­i­ta­tions and part­ner with a com­pany that can help add value to your prod­uct or of­fer­ing in a mu­tu­ally prof­itable way. Adapt, evolve and in­no­vate

No busi­ness model is sus­tain­able forever; mar­kets change, com­peti­tors and cus­tomers change and prices fluc­tu­ate. I’ve learned the hard way that the only way to keep a busi­ness alive is to con­stantly re­visit your busi­ness model, iden­tify what is work­ing and what isn’t and adapt to the mar­kets.

123RF

In Nova Sco­tia, the his­tor­i­cally prof­itable wild blue­berry busi­ness model is be­com­ing un­sus­tain­able as a re­sult of over­pro­duc­tion.

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