The Gig Economy – Convert Your Gig into a Real Business
KEY POINTS
Strategic vision and mission statements can become the cornerstone of your organization
Combine a SWOT analysis, SMART-ER goals, and KPIs to chart your path to success
Your chosen legal structure will have a significant impact on your personal liability risk, operations, and taxation
You likely dream big if you are part of the gig economy. It’s only natural. Afterall, the gig economy purports to offer a future of full of freedom, flexibility, and financial fortune.
Not everyone breaks through in the gig economy.
Has your gig been financially successful?
Are you ready to take that success to another level?
If so, the following strategic planning highlights are for you.
Gig Worker
to Business Owner
in 13 Steps
1 - Vision & Mission Statements
A vision statement has a future oriented perspective that typically outlines the long-term goals and aspirations of the company.
A mission statement describes the strategic pillars supporting the company’s long-term direction, purpose, and goals contained in its vision statement. Such may reference operational goals, product / service, primary customer base, geographic region, and more.
Not all organizations have distinct vision statements and mission statements. Some will combine them into one statement due to their complimentary nature.
Each statement should be clear and concise.
There is no rule book as to what each statement must contain. They should serve as guideposts to reference when making important decisions.
They will often have a customer and stakeholder focus while outlining the company’s commitment to meet their needs, solve their problems, or create value for them.
The company’s core values and principles can be incorporated into the statements. Such implies certain ethical standards necessary to ensure compliance with the prescribed core values.
The following example from Google illustrates the complimentary nature of each statement.
Vision Statement
To provide access to the world’s information in one click.
Mission Statement
To organize the world’s information and make it universally accessible and useful.
2 - SWOT Analysis
A SWOT analysis helps organizations identify their internal strengths and weaknesses as well as external opportunities and threats.
The framework provides a structured approach to evaluating the current situation and identifying potential areas of improvement. Each area may highlight a combination of immediate, short-term, and long-term initiatives.
Strengths
These are internal factors that provide a competitive advantage that can be leveraged in the marketplace. Such may include a skilled workforce, strong customer relations, unique product or service, reputation, intellectual property, pricing power, and more.
Weaknesses
These are internal factors that provide a potential competitive disadvantage. Such may include lack of expertise, outdated technology, poor management, limited access to credit, and more.
Each weakness must be carefully assessed. Some can be turned into strengths given sufficient and appropriate resources. For others, risk mitigation may be more appropriate than complete elimination of the given weakness.
Opportunities
These are external factors that can lead to growth while staying ahead of the competition. Such may include emerging or disruptive technology, evolving customer needs, and market changes.
Threats
These external factors may limit growth or pose risks to the overall success of the organization. Such may include a changing regulatory landscape, increased competition, economic downturn, technology, and changing customer preferences.
Process
A SWOT analysis should be done annually and tracked throughout the year.
Research is key to starting the process. Critical data can be derived from reviewing financial statements, obtaining industry reports, and gathering market data. Personal interactions with investors, customers, vendors, and peers can provide critically useful information.
The process should lead to the prioritization of issues and the development of integrated strategies to achieve the desired objectives.
3 - SMART-ER Goals
The SWOT analysis requires the setting of critical goals that will have a profound impact on the success of the company. Similarly, teams and individuals will set goals that determine the ultimate success experienced.
Goals can be difficult to set.
The SMART concept for goal setting was published by G.T. Doran in 1981. We have included two additional attributes E and R.
Specific
The goal must be significant, clearly defined, and well communicated. There should not be any ambiguity regarding the nature of the goal, why you set it, or what the expected outcome will be.
Measurable
There must be a quantitative basis of measurement. Overall achievement of the goal may be broken down into increments measured over specific time periods. Certain aspects may be measured on an overall basis.
Achievable
The original SMART acronym defined “A” as Assignable. We thought it prudent to substitute Achievable for our purposes.
Goals may seem lofty and unrealistic to some and completely attainable by others. You will need to find your sweet spot between stretching yourself and setting yourself up for failure from creating unrealistic goals.
Relevant
The original SMART acronym defined “R” as realistic. We thought it prudent to group realistic with Achievable above.
Goals that are created without integration into the vision and mission statements can lead to poor decisions.
Remember to always ask yourself “Why?”. Decisions flow much easier once you have the “Why” figured out.
Time
A goal needs to be time bound and tracked towards such end point(s). The likelihood of achieving your goal drops dramatically if it is not time bound. You also risk achieving the goal too late when such is no longer of value.
Evaluated
There are many participants involved in achieving your goal: you, your significant other, family members, advisors, employees, and others.
You need to constantly evaluate your goals, progress, and your team.
Reviewed
You must clearly communicate the results of your evaluation with the appropriate team members. This creates a synergistic loop of goal setting, tracking, evaluating, reviewing, assessing and realigning your goals.
4 - Key Performance Indicators
SMART goals necessitate key performance indicators (“KPIs”).
SMART goals are a framework for setting objectives. KPIs are metrics or measures used to evaluate performance and progress towards achieving goals.
KPIs are specific indicators that provide measurable data that can help organizations monitor and assess the progress towards reaching their objectives. They should cover financial and non-financial aspects of the organization.
KPIs will vary by industry and organization. The process of identifying and selecting the most valuable KPIs for your organization can be challenging, but its strategic importance and impact will provide long-term benefits. The following are examples of common KPIs,
Customer acquisition costs
Customer satisfaction
Customer churn rate
Employee productivity
Website traffic
Financial Health
Revenue
Gross profit margin
Inventory turnover
KPIs should be measured and reported to key stakeholders on a frequent basis. Be careful not to develop too many KPIs. History has proven that tracking and focusing on a few critical factors is more effective than tracking an endless list of indicators.
5 - Market Research
It is imperative that you conduct market research to understand your target market, identify customer needs, and make informed business decisions.
You must clearly define the questions you want answers to or the problems you want to solve. Such will influence the research method best suited for the task.
Research methods may involve surveys, interviews, focus groups, observations, or referencing existing data and related reports. You will need to develop the related tools necessary for the method chosen (e.g., questionnaires for a survey, pertinent questions for interviews).
Collecting, analyzing, and interpreting the data is critical. Such should be done within the context of the original questions and problems posed at the beginning of the process.
6- Identify Target Market
Identification of the target market is an extension of performing market research as described above.
It is essential that you determine your ideal customer base and understand their needs, preferences, and behaviors. Careful consideration should be given to demographic factors including age, gender, income level, wealth, education, location, interest, behaviors, and attitudes.
7 - Value Proposition
A company’s value proposition is essentially the benefits and advantages customers will realize by using the company’s product or service.
What makes the company unique and how does it provide value to its customers?
The benefits can vary greatly by industry and may include higher quality, convenience, efficiencies, increased productivity, time savings, enhanced profitability, and more.
Steps 1-6 above may cause a company to redefine its value proposition. Such may change due to market evolution, technological advancements, regulatory changes, and more.
8 - Competitive Landscape
Companies must understand the key players, market dynamics, and trends with respect to their industry.
Market research reports and industry publications can provide a wealth of information regarding market share, pricing models, product offerings, marketing, advertising, distribution channels, and their unique selling points and competitive advantages.
To the extent possible, a SWOT analysis can be performed at a high level for key competitors. Such may open new competitive opportunities when compared with your own SWOT analysis. Occasionally, it may identify companies that offer the potential for a synergistic alliance or partnership.
9 - Tactical Action Plan
You should have developed a well-thought-out and comprehensive strategic plan if you worked through steps 1-8 above. Now it is time to transition from strategic to tactical and create an action plan.
SMARTER goals have been established. KPIs have been set.
Now is the time to break down the SMARTER goals and outline specific steps, tasks, activities, and timelines for implementing the strategic initiatives.
Take a logical approach to prioritizing and assigning the tasks to key team members and allocating resources (e.g., people, finances, tools, technology) to the various initiatives. If possible, develop contingency plans or alternative plans for areas with known obstacles, constraints, or risks.
There must be a process to monitor, review, and communicate progress. The results may necessitate a reassessment of certain aspects of the plan. The plan should never be set in stone. It should be fluid and adaptive to potentially rapidly changing conditions that may be caused by internal or external forces.
10 - Marketing and Advertising
Steps 5-8 included performing market research, identifying the target market, defining the value proposition, and assessing the competitive landscape. It is now time to develop a marketing and advertising strategy.
The first step is to set clear objectives. Such may include increasing brand awareness, generating leads, increasing sales, or launching a new product. Each initiative should have its own set of SMARTER goals and complimentary KPIs.
The choice of marketing channel(s) will be critical to achieving the stated objectives and will be subject to your budgetary constraints. Such may include social media, influencer marketing, email marketing, search engine marketing, newspaper, radio, television, and billboards.
11 - Build a Strong Team
The transition of a successful gig experience into a growing business will take the expertise of more than the founding member.
Each organization will have unique talent requirements. The steps outlined above should identify such needs which may include skills related to technology, marketing, sales, finance, taxation, regulatory.
Not all individuals need to be employees of the company. Such can be costly and often financially prohibitive in the early stages. Potential advisors and team members may be sourced from existing personal and professional networks. Many skills and services can be contracted on an as needed basis.
Ideally, the team possesses diverse backgrounds, experiences, and perspectives. Diversity may lead to new and innovative ideas and approaches.
12 - Legal Structure
There are several types of legal structure to choose from. The three most common are sole proprietorship, partnership, and corporation. The legal structure you choose will impact,
Day-to-day operations
Degree of personal liability risk
Ability to obtain financing
Ability to raise additional capital
Taxation
Administrative burden
13 - Financial
It is critical to develop a financial plan that is aligned with the goals and objectives derived from the processes referenced above.
A professional advisor may be required to help prepare realistic budgets and cash flows. Such will require the strategic allocation of resources and a financial reporting infrastructure capable of providing complete, accurate, and timely information.
BOTTOM LINE
A firm foundation can launch a startup by creating a strategic plan, SWOT analysis, and the supporting SMART-ER goals and related KPI metric tracking system. The right team can assess the competitive landscape and develop a sales and marketing strategy that conveys the value proposition to the target market.
