“How do you determine what a business “want” is versus a business “need”? Please share any frameworks or methodologies you use to help prioritize what your business needs.”
Here’s what YEC community members had to say:
1. Can a business function without it?
“In the book “Profit First”, Mike Michalowicz discusses how start-ups are so scrappy and don’t waste money on anything unnecessary, while still managing to function and scale. But by the time a company gets bigger, there are a lot of wasteful and unnecessary expenses. If the business can function without it, I categorize it as a “want” versus a “need.” ~ Rachel Beider, PRESS Modern Massage
2. Focus on Strategic Alignment
“At our B2B marketing agency, we determine a business “want” versus a “need” by focusing on strategic alignment and impact assessment. Our approach involves first understanding the client’s overarching goals and operational requirements. Needs are identified as critical investments that directly contribute to achieving these objectives, ensuring core functionalities and growth opportunities are supported. This is complemented by a rigorous cost-benefit analysis to gauge ROI and resource allocation effectively. Wants, while beneficial, are viewed as enhancements that may not be immediately essential but could provide additional value when resources allow. By prioritizing based on this framework, we ensure that our efforts and investments are aligned with driving sustainable growth and maximizing client success in their respective markets.” ~ Samuel Thimothy, OneIMS – Integrated Marketing Solutions
3. MoSCow Method
“I employ the MoSCoW method (Must have, Should have, Could have, and Won’t have) to determine business needs versus wants. Must-haves are essential for the business to function and meet its goals, indicating needs. Should-haves and could-haves are beneficial but not critical, often categorized as wants. This method allows for clear prioritization and resource allocation. For instance, upgrading essential software is a need, while aesthetic office improvements might be a want. When considering a career break, use the MoSCoW method to prioritize activities that are essential for your personal and professional development over those that are merely desirable.” ~ Thomas Griffin, OptinMonster
4. Evaluate Impact
“To distinguish between a business “want” and a business “need,” I focus on evaluating impact and necessity through a holistic lens. I begin by clearly defining the business’s short-term and long-term objectives. Understanding these goals provides a solid foundation for identifying what is essential versus what is merely desirable. Next, I assess how each potential action or investment aligns with these objectives, considering whether it directly contributes to achieving key goals. If an action is crucial for meeting these goals, it is typically a need; if it enhances or adds value without being critical, it is more likely a want. I also perform a cost-benefit analysis, comparing the costs involved with the expected benefits of each potential action. Needs usually show a clear and necessary return on investment (ROI) or are essential for maintaining operations, while wants might offer benefits that don’t necessarily justify the costs if resources are limited. Additionally, I create a prioritization matrix to plot actions based on their impact and effort. Needs often fall into high-impact categories, while wants are often lower in impact.” ~ Michelle Aran, Velvet Caviar
5. Consider the Strategic Vision
“When distinguishing between business “wants” and “needs,” it’s crucial to consider the overarching strategic vision of the company and its immediate operational requirements. One effective approach is to incorporate a holistic view that combines financial analysis, strategic alignment, and risk assessment. Start by outlining clear short-term and long-term business objectives. By understanding these goals, you can better evaluate whether a particular initiative is essential for achieving key milestones or if it simply adds value without being critical to success. Next, conduct a rigorous cost-benefit analysis for each potential action or investment. Needs should demonstrate a clear and necessary return on investment (ROI) or be vital for sustaining daily operations. In contrast, wants may offer benefits that, while desirable, may not justify the associated costs, especially when resources are constrained. By integrating these elements into your decision-making process, you can effectively distinguish between business wants and needs, ensuring that resources are allocated strategically to drive sustainable growth and operational excellence in alignment with the company’s overarching goals” ~ Robert De Los Santos, Sky High Party Rentals
6. Run the decision through a framework
“Distinguishing between business “wants” and “needs” is crucial for effective resource allocation. Here’s a framework I use: Impact vs. Cost: Needs directly and significantly impact core business functions. They might be essential for daily operations, legal compliance, or maintaining a competitive edge. Wants, while potentially beneficial, have a less critical impact or a higher associated cost. Necessity vs. Discretionary: Needs are essential for business survival or growth. They are non-negotiable expenses or investments directly tied to core functions. Wants are discretionary expenses that enhance operations or employee experience but aren’t fundamental for survival. Urgency vs. Timeline: Needs often have a clear deadline or require immediate action to avoid negative consequences. Wants, on the other hand, can usually be deferred or implemented on a longer timeline. By analyzing potential initiatives through this framework, you can categorize them as needs or wants. Additionally, a prioritization matrix can be helpful. This involves plotting initiatives on a grid based on urgency and impact. Needs that are urgent and high-impact take top priority, while wants with lower urgency and effects can be placed on hold or reevaluated.” ~ Kristin Kimberly Marquet, Marquet Media, LLC
7. The Eisenhower Matrix
“Determining a business “want” versus a business “need” often involves evaluating the impact on core operations and goals. One effective framework I use is the Eisenhower Matrix, which categorizes tasks based on urgency and importance. Needs are typically tasks that are both urgent and important, directly affecting the business’s functionality and strategic objectives. Wants, on the other hand, may be important but not urgent, or neither urgent nor important. This methodology helps prioritize resources and efforts toward activities that sustain and grow the business. When evaluating a career break, consider using similar prioritization techniques to ensure the time off aligns with your essential personal and professional goals.” ~ Andrew Munro, AffiliateWP
8. Evaluate ROI
“Assess the potential impact or ROI. Consider if an investment will yield higher efficiency (either a productivity boost or time savings), reduced costs, or improvements to sales. Weigh that against the projected spend and then see if it’s ultimately something you need or want. Most of the time, things in the ‘want’ category simply can’t be justified using simple math.” ~ Firas Kittaneh, Amerisleep Mattress
9. Prioritizing Needs Lead to Long-Term Success
“It’s important for businesses to differentiate between initiatives that are a “want” and those that are a “need,” as prioritizing the latter can make a significant impact on the company’s long-term success. To determine which initiatives are truly critical for the business, it’s necessary to evaluate factors such as alignment with business goals, urgency, ROI, and resource constraints. By taking a thorough and analytical approach to decision-making, businesses can avoid investing in initiatives that may not provide the desired return and instead focus their efforts on those that will yield the greatest impact.” ~ Benjamin Rojas, All in One SEO
Image: Envato
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