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Growing a small business can be a challenge – and that’s an understatement! It’s easy to set goals for a new venture, and much more difficult to execute them. At times, it can even seem almost impossible to find the steps that should be taken between the current reality of your company and the future that you’ve envisioned for it. If you’ve started your business with the MVP model, you’re likely itching to get to the next level. But, as with other aspects of growing a business, it definitely doesn’t happen overnight.
Related: 4 Keys to Grow and Scale Your Startup
Defining the MVP
What exactly is an MVP, and how is it leveraged for small startups?
No, it does not refer to the most valuable player, though it might as well, from some perspectives. MVP stands for minimum viable product. It’s a proven methodology for launching a small business or service without the budget, time or resources to go through a testing phase that might otherwise be optimal.
MVP launch models and startup strategies can be widely adapted for almost any type of business. It’s impossible to put a number on what minimum viable really is, because what works for one company isn’t enough for another. But it’s worth the time to figure out what your particular MVP is; the failure rate without it is potentially devastating to a new business. Some research suggests that nine out of ten startups fail because they’re too top-heavy with their spending. Following the MVP model can conserve funds for later on down the line. On top of that, establishing an MVP can actually help to attract investors.
The MVP launch model
MVP strategies allow small businesses to test out new ideas, products or services in the wild, so to speak – or in the real world, which is the same thing these days.
This is especially valuable for a business with limited resources and a small startup budget. It allows the entrepreneur to see what works and what doesn’t within a microcosm that amounts to a bare-bones version of the potential finished product.
As an example, let’s say you want to launch a small restaurant brand and you want to offer deliveries to homes in multiple areas. Starting with an extensive route right out of the gate, without even knowing how many orders you might sell, could be prohibitive. But you can set certain parameters, such as only making deliveries to drop-off points once or twice a week. This will give the business room to grow in an organic fashion, without stripping the budget right away.
The same principle can apply to starting a business with the absolute bare minimum of employees. Perhaps making it a family effort and saving hiring for later. An entrepreneur can spend as much as 40 percent of their time on things like HR, payroll and hiring. This is a way not only to conserve funds by restricting hiring but to conserve time and energy. And, allowing the entrepreneur to focus on bringing in money right from the get-go.
Related: Is It Time to Outsource Human Resources?
Clearly, the MVP launch model varies from business to business. But one thing is for sure. No matter what type of business you’re running, you must have the drive and motivation to get through to the next step.
So what comes after the MVP?
The learning process
Potentially the most beneficial part of the MVP process in the long term is what you learn from operating with an MVP. MVP is research on the hoof, as it were. It allows you to pinpoint your audience and determine whether your business has potential for success and growth.
Throughout the initial launch, you should be collecting any data you can get your hands on. Who are your customers? What are they buying? What do they think of it? What would they change? What do they love or what do they hate about your product or service? Create a feedback loop and use this to build to the next step.
The thing about a feedback loop, of course, is that you have to weigh how much of it informs what you do. With the beginning of a customer base, you can percentage out what features of your product and service have the highest rate of success. Then balance that against the comments from your users.
So what comes next after the learning process? How will you continue to scale up your business?
Eyeing business growth
That’s actually a trick question because every business owner worth their salt knows that the learning process goes on and on. Potentially forever. Because you want to continue to benefit from the insights and feedback of your customers as long as your business is functional.
However, there is a next step to what to do with that feedback after you’ve worked through the MVP. Some call it the MMR or MMP – minimum marketable release and minimum marketable product respectively – and this process is about adding features to your MVP.
It’s likely you already had some additional features in mind, things that may have been stripped from the prototype in the interests of MVP. You may also have received some suggestions from your initial customers.
With the MMR / MMP process, it’s time to start adding value to your products and services. Again using the small restaurant delivery service as an example, this is the time that you might start adding in delivery days or locations. Or expanding some of the products that you can provide. With the MMR / MMP, you’re getting closer to the finished product.
Remember, the feedback loop should never stop – especially as you work towards the next step.
Taking further steps
The next step is known as MLP, or minimum loveable product. It’s centered around not just making a product that works, but one that people actually, you know, want to buy.
Potentially, funding from running the MVP / MMR / MMP portion of your business strategy can be channeled into taking feedback and using it to develop your MLP. More likely, you’ll need some of those startup funds that you cleverly saved by working with the MVP to begin with.
The MLP portion of running a business is where things really start to take off. You’ll continue to get feedback and hone your product or service. But by now you should also be getting word-of-mouth marketing from customers who are satisfied, maybe even excited by the products that you’re offering. About 83 percent of consumers trust word-of-mouth recommendations from friends, family and colleagues. This means that WOM marketing is the most viable (and cost-effective!) Marketing tool available to a new company. By creating an MLP, you’ve boosted your potential for WOMM.
Achieving business growth
With a truly viable and sought-after product on your hands, and word-of-mouth starting to make the rounds, your business is well on the way to real success. Remember that this growth does not happen overnight. A solid foundation is vital to turn a simple MVP into a scaled-up, full-version company.
Related: 15 Strategies for Quickly Expanding Your Business