Conventional vs. Authentic Business Success
How do we measure the success of an authentic business?
In this post we’ll explore the different success formulas, and how that can inform our priorities and strategies.
The basic success formula for a conventional business:
Money
divided by
Effort
In other words:
Make the most amount of money with the least amount of effort.
This means squeezing as much profit as possible out of each customer, and to gain as many customers as possible… all of it done with the least amount of work possible.
With this core mindset, it’s easy to fall into schemes that are money-driven, to the detriment of one’s values and community.
As people try (and fail) with securing fulfillment and personal sustainability by conventional business measures, they might then overcompensate, and swing to the other side: they become interested in building a non-profit.
The basic formula for non-profits:
Impact
divided by
Money
How to make the most mission-driven impact, with the donations given? That is the key priority of non-profits and it’s a laudable one. (The factor of Effort isn’t often taken into account. In most non-profits, people work really hard for relatively little pay.)
Yet, some non-profits still get into trouble by inflating their impact numbers or going about their mission in ways that compromise the well-being of workers or society.
Authentic Business aims to be a middle way between these two extremes of conventional business and non-profits.
The basic formula for the success of an Authentic Business:
Impact multiplied by Values
divided by
Prices multiplied by Effort
In other words, how can we maximize two things:
(1) the impact we make with our business…
(2) that’s aligned with our values?
In the process, how do we minimize two things:
(3) the prices we charge
(4) and the amount of effort?
The ideal authentic business charges the lowest prices possible to stay in business, while spending the least amount of effort (in order to bring freedom to the people operating the business), while producing the greatest amount of positive impact to their clients, in line with their higher or deeper values.
What might this mean for our strategy?
If you run an authentic business, these 4 questions would be an excellent regular audit, perhaps with a business coach, or otherwise get together with a friend who also runs an authentic business, and rigorously answer these 4 questions.
I look forward to hearing how this benefits your business!
Money
divided by
Effort
In other words:
Make the most amount of money with the least amount of effort.
This means squeezing as much profit as possible out of each customer, and to gain as many customers as possible… all of it done with the least amount of work possible.
With this core mindset, it’s easy to fall into schemes that are money-driven, to the detriment of one’s values and community.
As people try (and fail) with securing fulfillment and personal sustainability by conventional business measures, they might then overcompensate, and swing to the other side: they become interested in building a non-profit.
The basic formula for non-profits:
Impact
divided by
Money
How to make the most mission-driven impact, with the donations given? That is the key priority of non-profits and it’s a laudable one. (The factor of Effort isn’t often taken into account. In most non-profits, people work really hard for relatively little pay.)
Yet, some non-profits still get into trouble by inflating their impact numbers or going about their mission in ways that compromise the well-being of workers or society.
Authentic Business aims to be a middle way between these two extremes of conventional business and non-profits.
The basic formula for the success of an Authentic Business:
Impact multiplied by Values
divided by
Prices multiplied by Effort
In other words, how can we maximize two things:
(1) the impact we make with our business…
(2) that’s aligned with our values?
In the process, how do we minimize two things:
(3) the prices we charge
(4) and the amount of effort?
The ideal authentic business charges the lowest prices possible to stay in business, while spending the least amount of effort (in order to bring freedom to the people operating the business), while producing the greatest amount of positive impact to their clients, in line with their higher or deeper values.
What might this mean for our strategy?
- Are we checking in on a regular basis (e.g. quarterly) to audit which activities we’re doing that’s making the biggest impact on our clients? For example, what aspects of our service do they find most helpful? Which products are getting the best feedback? What topics in our content are getting the most engagement?
- Are we checking in weekly (even daily) to notice how we are (or are not) integrating our higher values in our operations and marketing? What are a few small steps we can take this week to bring our values into our projects and actions?
- Are we reviewing our prices, at least once a year, to see whether we need to raise the prices to allow our business to be sustainable? And if so, can we limit how much we raise our price, in solidarity and compassion with our clients? In fact, if we are doing fine financially, could we even lower our prices, or perhaps create a profit-sharing program with our clients and fans?
- Are we auditing our ongoing actions and obligations, and finding ways to do our business more simply, with less human labor? This allows us to increase our time freedom, and perhaps also lower our prices if we can remain financially sustainable while working less.
If you run an authentic business, these 4 questions would be an excellent regular audit, perhaps with a business coach, or otherwise get together with a friend who also runs an authentic business, and rigorously answer these 4 questions.
I look forward to hearing how this benefits your business!