|Traction's methodology in brief|
Our methodology focuses on customer relationships, capital flow and risk management. This is described more in detail below:
To create income before expenses
- Sell first, buy later.
- Let revenue control costs.
- Cease activities when funds are low.
- Let customers and suppliers finance development.
To minimise fixed costs
- Cover fixed costs by getting orders.
- Convert fixed costs into variable ones.
- Do not invest without secure orders.
- Do not recruit without secure orders.
- Outsource and use consultants.
To control and execute the critical and unique aspects of the business
- Every business has a unique core - guard it jealously.
- Product control
- Market control
- Do not allow suppliers and middlemen to take control.
- Stay in direct contact with the end customers.
- Nurture the brandname and ensure you own it.
To avoid involvement in those parts of the business where others have more expertise
- All businesses contains numerous conventional services and skills - there are always other people who specialise in these areas. Use them. But use people who know their business and are strong.
- Reduce the scope of the business to a core business and expand it later, if possible.
To capitalise on opportunities
- Sell to one customer, then two, then four - not to everyone at once.
- Find customers who will derive massive benefits from the new product and customers who want to try something new - known as "early adopters".
- Try lots of different approaches, make more of what works and quickly stop whatever doesn't work.
- Let the customer's wishes and willingness to pay determine what the company does.
To avoid risks
- Basic business - something to live on when business is sluggish.
- Take one risk at a time, rather than several simultaneously.
- Combine a unique aspect with the conventional ones.
- Let others share the risks - customers and suppliers. Or refrain.
- Only take the risks that the company can afford.
- Borrow for business, not losses.