This is the first in a series of postings to the Ohio Local Food Systems Collaborative (OLFSC) about starting and sustaining a business in local food systems. These postings have several not so ordinary characteristics:
- They are about real business opportunities in real neighborhoods
- The process of developing these opportunities and the resulting content are shared openly on the OLFSC website
- They invite OLFSC readers to comment, critique, and challenge assumptions and extrapolations posted in order to make the outcome better for all
- They encourage OLFSC readers to generate ideas and develop plans for businesses they eventually setup in their local areas
Before heading into the business opportunities, clarification of business concepts and terminology is in order...
A Firm Foundation and Ongoing Adaptation
The purpose of any business is to deliver value to the customer. The primary objective of a business is to make profit. In terms of value, this means the amount the customer pays for value delivered (revenue) surpasses the amount invested by the business to provide that value (capital and operating expenses). The ultimate goal of a business is sustainability over the long-term. Again, from a value standpoint, a business is sustained when a sufficient percentage of the profit is reinvested to continue to develop and deliver what is deemed of value by customers so that they continue to pay for it.
What is of value to the customer (idea generation)? How does one deliver that value profitably and in a sustainable manner (business planning)? These are the primary questions addressed at the outset of an entrepreneurial effort. Idea generation and business planning combine vision of a preferred future with a framework for action that brings that vision into reality. These two, working in concert with one another, provide the firm foundation upon which all successful businesses are launched.
Delivery of demonstrated value to the customer requires taking action according to the business plan (business plan execution). Of course, changes in conditions and unforeseen circumstances during the delivery cycle warrant a certain degree of flexibility in executing the plan as it is put into play (adaptation). The capacity to sense and respond, learn and adapt is the hallmark of a business that survives start-up and embarks on sustainability.
The main points outlined above equate to key steps in establishing a successful business:
- Generate ideas
- Develop a business plan
- Execute the plan
- Adapt plan to "lessons learned" during execution
These four link vision with problem-solving to deliver demonstrated value to the customer. Because of the significance of the dialectic between vision and problem-solving in business success, future postings in this series will delve more deeply into the working relationship between the two. And in keeping with the commitment made in the opening statement of this posting, the focus of the upcoming OLFSC postings will be "real business opportunities in real neighborhoods".