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.

 


 
AB Traction      Box 3314    Birger Jarlsgatan 33, 3tr, 103 66 Stockholm          Tel: +46 (0)8 506 289 00      Fax: +46 (0)8 506 289 30         E-post: post@traction.se
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