Zig Zag Principle: Four Ways for Litmus-testing Business Ideas

When you have a business idea you want to try out, here are four tips to keep in mind — inspired from the book of entrepreneur and author, Richard Christensen’s “The Zig Zag Principle”. He teaches his unique approach to a successful business strategy by using skiing as an analogy for avoiding pitfalls in the process of creating a thriving business. In his tips he emphasizes flexibility and resourcefulness over too much focus and over-commitment.

1.) Profitability First. Always think on how to quickly and safely acquire profitability for new ventures, even if it means slightly deviating from your main goals. When deciding to set resources you’re willing to invest in a business, devote as much as 65 percent for garnering profitability, 25 percent to towards resources and staff, and 10 percent towards scale.

2.) Plan to Fail Efficiently. Christensen advises that a business venture needs an acceptable time frame to attain profitability. For Christensen, its three months, while others may devote longer time to see if a business takes off; it really depends on the amount of resources you are willing to invest in a given venture. If a venture doesn’t attain profitability for him in his timeframe, he considers it a failure, albeit an efficient one. It may sound premature to terminate a business project within three months of starting it, but he believes pulling out early means less wasted time and less wasted resources on a potential failure down the line.

3.) Focus on Your Goals. After attaining profitability, alter the allocation of resources from the previous model in the first advice to 65 percent to scale, staffing, and resources, 25 percent to scale (expansion or franchising), and 10 percent to profitability. As the needs of your company grow, so too should you alter the priorities of your business to meet those growing and ever-changing needs. (Christensen advocates the use of his 65/25/10 resource allocation model for this process)

4.) Slow and Steady Wins the Race. While Christensen admits that businesses that follow his principles may take longer to achieve their goals, he contends that his methods will allow business-owners greater stability in the process to sustainable long-term profitability, as well as providing valuable experience with starting up and managing a successful business venture.

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