Want to be successful in business? Read on…
Speak to most people and they will say that the most important things for a business are to make a profit and keep the cashflow positive. True, but they are second order effects stemming from more strategic level actions. Here are the three higher level factors that are needed for a successful business.
People’s eyes cloud over when you mention strategy but it’s vital to success. When you start a small business you need to have some idea of what you’re trying to achieve in order to then understand how you’re going to achieve it. Strategy needs to be big and long term and it needs to be then broken down into smaller, more manageable chunks. So, at the grand strategic level you need to be clear as to why you’re starting the business. Some people build a business to sell it once up and running, others aim for international market sector domination, others for local influence. Think about what your aims are as they will affect how the business develops. Next you need to break the strategy down into 10 year, 5 year, 3 year, 1 year chunks showing what you need to achieve in those time periods to reach the strategic aim. From your 1 year plan you will see tactical level decisions and actions falling out. These will seem more real and achievable and will give shorter term focus. Review the plan every year to see how you’re doing and what needs doing next.
A broad term with many meanings. People tend to think of marketing as telling the world about your business and trying to attract customers into it. That’s fine but we can’t really market to the whole world so we need to refine things and ask ourselves a couple of questions
- What sort of people do we want to attract to our business as customers?
- Who are we going to compete against?
- How do we what to win those customers and fight the competition?
To answer those questions we need to go back to the strategy as that will tell us the market sector we’re aiming for and give us an idea of who our competitors are likely to be.
Thinking about our market will also help shape the ‘feel’ of our business – how we’re going to look to our customers and how we’re going to communicate with them. Our marketing message will be very different if we’re going for high end quality as opposed to ‘pile them high and sell them cheap’.
As a business grows it takes on more and more people; people ‘issues’ start to appear, bureaucracy increases and people start to lose focus. The requirement for increased leadership and direction is required and, very often, it will need to come from someone other than the business founders. Entrepreneurs are great at starting businesses and motivating people in the early years but they lose interest and focus once the new venture is up and running so need to hand over to a management team (another thing to go into the strategic plan…).
Internal communication with the team is really important; there are so many businesses where the people who do the work are not engaged with the company and simply don’t care about the work they do. I’ve seen some businesses where the workers are – unwittingly – working against the aims of the business owner, simply because they didn’t know what he was trying to achieve.
Don’t forget that your ‘team’ also includes those that support your business externally. These include your bank, your accountant, suppliers, landlords – anyone who can influence the success of your company. They also need to be kept informed of your strategic and tactical decisions so that they can then support you on your journey.
When I’m working with businesses I like to have the business owners think about these three points every year, to take a specific amount of time out (away from the business) to reflect on the last year, review the strategy and then decide on the tactical decisions and actions to be taken over the next year to achieve success.
I can’t take credit for the annual review idea, I got it from a presentation I was listening to at an Institute of Directors evening. The presenter explained how every year (from the age of 18), from Boxing Day morning to New Year’s Eve, he would sit in his room and work on his plan of how he would become a millionaire by the age of 35. Every year he updated and refined his strategic plan and worked out what he needed to do at the tactical level to achieve it.
A week before his 35th birthday he flew to New York and signed the piece of paper that made him a millionaire.