8 Things to Do Before You Run A Business Experiment
What are business experiments and how to organize business experiments in an organization?
As we know, Innovation is a term defined as “creation of new ideas from study and experimentation” and businesses do not evolve and grow without innovation. Organizations can expand their business profits by running business experiments. Organizations can also learn business facts from mistakes and failures and can refine their business processes by performing business experiments. Moreover, organizations can successfully organize business experiments by performing four steps such as create hypothesis, design experiments, execution of designed experiment, and analyze outcomes. The first step to organize business experiment is to create hypothesis. In this step, project manager predicts what will happen if project testing leads to success. After creation of hypothesis, project manager will design experiment in which he/she will outline what part of the project will undergo in testing phase and how much time span will be required for testing. In third step, practical implementation of testing mechanisms would take place. In this step, the functionality of the project will be tested by internal staff of the organization and this type of test is known as Alpha testing. After performing alpha testing project will undergo beta testing in which project will be tested by the customers. By performing business experiments, the reputation level of organization will be improved in the competitive market and it will also motivate customers to give feedback. After project is delivered to their client’s organization must analyze the outcome in order to evaluate actual performance of their business in the market. Thus, business experiments help the organization to test ideas and overall business strategies. Before starting business experiments, organization must need to take care of some of the activities namely- business plan, profitability analysis, money sources, marketing plan, closure plan.
Business plan- Before implementation of business experiments, organization must need to develop business plan. It is a written document that outlines the future scope of organization’s business venture. This document brings together the key elements of business that include detail information regarding services, products, cost, sales, profits. We can also say that business plan is a blueprint of business experiments and activities that would be performed to achieve desired goals of an organization.
Profitability analysis or breakeven analysis- Every Organization must need to perform breakeven analysis before starting a business experiment. This analysis is used to determine how much product volume is required in your business so that organization will start making profits. This analysis is performed during the development of pricing strategy either as a subset of business plan or marketing plan.
Income sources or monetary sources- As we know, money is the primary factor that every organization requires for the continuity of business. Organization requires money throughout the life of business, money is needed continuously to establish business continuity in the market. Funds can be categorized into two categories namely- Internal funds and External funds. The funds that are generated by business itself is termed internal funds and it can be achieved through profits, depreciation and sale of assets. While the funds that are invested by shareholders is known as internal funds and it can be achieved from two sources namely long-term sources and short-term sources.
Marketing plan- It is a process by which business analysts of an organization analyze the environment and course of marketing actions. This plan provided a framework for the implementation of marketing strategies in an organization. By evaluating marketing plan, business analyst analyzes market opportunities, develop market strategies, plan marketing program, and manage marketing efforts. Business analyst timely analyze market opportunities by determining market information services, market environment, consumer markets and anticipating competitors.
Closure plan- This plan gives timeline for the completion of business experiments and checklists of legal requirements. In this plan, business analyst talks with business advisors about legal requirement for closing business experiments.
What are the eight things to do before you run business experiments-
Attribution measurement- Business experiments depends on measurement it implies that organization should need to measure income sources. For example- organization must need to figure out which resources and business processes are effective for the development and evolution of business.
Business experiments must be properly designed and implemented- In some of the organizations business experiments are left to project managers that results in improper design and implementation of business processes. It is important to design business experiments for realistic experiments.
Perform A/B testing- Before launching product into the market, organization must need to perform alpha testing in order to check the actual functionality of the product. Once organization found that project fulfill the objectives of the organization and the customers, then organization deliver its product to their target customers. While on other side target customers also tests the functionality of the project or product and this testing mechanism is known as beta testing.
Marketing and sale- Marketing is a process which involves number of activities such as planning, pricing, promotions, sales, transportation, warehousing etc. some of the organizations design business experiments for the purpose of promoting their product among the customers but due to lack in business experiments, organizations may fail in achieving their targets (profit, value, reputation).
Refine product by embracing previous existing products- Organizations can achieve maximum of profits by promoting their products in the market. By implementing business experiments organization can refine their products functionality by mapping the requirement with previous existing product.
Make your product public- This practice is implemented to catch errors, feedback, share learnings. This process is used to improve the quality of product with the help of customer’s feedback organization will opt different business strategy that in return may enhance the reputation value of organization in the market.
Budget planning- As we that that money is the primary need for the establishment of business. Before launching any product in the market organizations must develop budget report in which total money incurred during the development of product is mentioned. Every organization aims to achieve profits from their product so that the value of organization among their stakeholders will be increased.
Overhaul incentives- Most of the businesses often fails because of their cultural environments. Most of the organization also fails due to the lack of business experiments and business strategies. For the growth of business, it is important to provide comfortable environment to staff members so that they will work properly and bring innovative ideas for the development of business.