The Success Of Your Business Depends On Its Experiments

You can have all the training, do all the reading, hold all the discussions. But making decision and acting on them is where the rubber meets the road.

While this may sound discouraging, just remember that business, like life, is an experiment.

You can only get better with the number of experiments that you make. Given this reality, the question is: How can you decrease the failure rate and increase the success rate of the experiments that you make in the course of running your business?

Here are some suggestions for making smart business experiments:

1. Start With Low-Hanging Fruits

It helps to begin with activities that the business can implement with ease. These should be activities that are likely to yield quick results and provide clear insights for further action. It may be as simple as a change in price or testing a marketing message. The objective may be limited to observing how customers react.

2. Test And Learn

Even in the age of analytics, with computing power to crunch all kinds of data, you must take a test and learn approach, by taking different actions under different conditions, and comparing your results. This approach will enable you to analyse the outcome of each experiment, interpret the available data and understand the causes that led to the results that you get. Over time, you will develop the skill of experimentation, which will tell you what works and what doesn’t.

3. Develop A Scientific Mindset

You must think like a scientist. You must run your business experiments with control and feedback mechanisms. For example, in the marketing of a product or service, your business may choose to segregate its market by demography or geography, each with different terms and conditions, and measure specific parameters of performance in each of the markets. The resulting feedback could then be used to improve the overall performance of the product or service.

4. Measure What Matters

The goal of feedback is to capture and record relevant effects. The results must be viewed in the context of set objectives of the experiment. An example could be a short-run outcome of driving the acquisition of customers. Start with your goal in mind, know what you are aiming to achieve and check your results. Yes. Know what to measure.

Irrespective of outcome, as a Small Business Owner, you must remember the sole goal of these experiments: To validate intuitions and decisions, make better decisions and implement ideas based on provable insight.

Believe it or not, success in business is a function of the number of experiments that you perform each day, each week, each month and each year. This is so because the art of business, like laboratory experiments, is not an exact science. It is more a matter of trial and error undertaken under certain controlled conditions. The good news is that one big win can be enough to pay for hundreds of failed experiments.

In other words, if you have a 10 percent chance of success in every 100 experiments that you perform, you have done well. As a Small Business Owner, this is a bet you must take every time even when it means you will be wrong nine out of 10 times.

If you need help preparing your small business for success, contact us today.

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