Proof of Concept
The phrase Proof of Concept is one I learned from my friend Russell Brumfield, a successful business builder and entrepreneur. Proof of Concept means the business model is viable. Viable means it is making or will be making a profit.
If you are not making a profit you are not in business. Does this mean that any business idea that is not instantly profitable is not viable? No it does not. Twitter is not profitable. Twitter has attracted over $100 million in investment funding. Does this mean Twitter is viable as a business? No it does not mean that either. Ultimately Twitter must be profitable or all the interest and investment funding dries up. That is true for any “for profit business”.
Note: People interested in paying you money for what you are offering is key and having enough people pay you so you are able to make a profit is Proof of Concept. You don’t have to have a business model of a Google or a Twitter. You have to have a business where your revenue exceeds your costs. Once you are in profit then you can focus on strategies that will help you further increase the profit percentage for your business. Increasing the percentage of profit being earned by your business is part of the scope of what is covered in the Build Profits Group on Facebook.
Now if this all seems obvious I can assure you I have consulted with some very large companies that no longer had Proof of Concept. They once may have profitable, but part of my work was to help them regain their viability as a business. Key point: you may be profitable today but there are no guarantees you will be profitable tomorrow. Managing change is key.
If you are in business, take a hard look as to whether you have proof of concept. If you do not now, you need to have that soon. I have not kept track of the number of ideas that seemed great but failed. Does failure mean the idea was not a good one? It does not. It may mean the timing was not right, a rapid change in the competitive landscape or decisions by owners that were not good for the business.
If you are thinking about getting into business be sure there sufficient evidence as to proof of concept. This applies to starting a company, buying a business, joining a network marketing company, it also applies to considering a job with a company. I encourage you to be particularly careful with new start-ups. As this is written there is a major buzz surrounding a business opportunity backed by several well known celebrities. This could be great and maybe not. If it is great, there will be Proof of Concept and there will be plenty of time to become involved and make money.
Finally on this topic it does not matter what other people are experiencing with a business, Proof of Concept applies to you and your experience. In the next article, we will review the primary key success factors for most business that evidence Proof of Concept.
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About: Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies. Steve is a business owner and an expert business consultant focused on building profits and net asset value. He is very experienced with Internet marketing and social media marketing. All articles published by Steve unless specifically restricted may be freely published with this resource information.