The basic components of any business are Processes (procedures/policies), People (employees), Customers and Resources (ideas/capital). Leaders who strengthen and understand each of these building blocks build their business. Those who weaken or neglect these building blocks find declines in both their top and bottom lines.
Believe it or not, organizations can sometimes forget that creating and delivering high-quality products and providing excellent services is their primary goal. Organizations keep ineffective processes in place because it’s comfortable, safe, and familiar. Leaders should periodically set aside time to define and refine their processes, track defects and poor service, and make improvements to solidify these (5) core components.
You have to make the mindset shift from running your business as a self-employed/good employee to building a business that you can one day sell, scale, or passively own to fund your retirement.
This means constantly reminding yourself that you are just a temporary producer and that your business must eventually replace you in its day-to-day operations.
Be clear on your mission
There’s a reason you started a business and quit your job (or didn’t try to find a new one). Why are you doing this? Keep in mind that your personal mission and your company’s mission may be different, as long as they are aligned and can co-exist. You made the mission statement in the business plan and it’s sitting on the shelf gathering dust.
Network and get a mentor
Get a business advisor or coach. It doesn’t have to be someone professional, just someone who can share experiences to brainstorm and tell you when you’re losing equipment, money and mindset.
Get your business off the road to nowhere
When money is tight and momentum fades, you are left with the day-to-day work of the business, this is when you learn how to make your business work. It can get exhausting because sales are slow and you’re learning how the business really works, to acquire customers, to market products, to understand how changing processes and products affect your finances, and every idea you have doesn’t work automatically as you imagine it will grow. Profits
At some point while running a business, you are likely to experience that feeling of exhaustion or lack of inspiration. Work-life balance is important; there is a truth, in working hard and playing hard to relax. Reading a daily devotional and taking a daily 30-minute walk can help relax your mind, etc.
Customer acquisition is expensive to acquire new customers, businesses must effectively target, market and convince customers to try their product or service.
Many business owners don’t take the time to figure out who their target customer is. What are the likes, dislikes, needs, and wants of your target customers? What types of media do they consume? What is the cheapest way to reach them? How much is the target customer willing to pay for your products or services? Where and how should we sell our products?
Remember, it is cheaper to keep a customer than to acquire new ones.
Master the art of compromise
Being attractive is important in every part of your business, whether it’s communicating through email marketing, social media, blogs, videos, and other business formats.
Grab the social media warning
The social media marketing plan should include Instagram, Facebook, Twitter, and the company website to communicate with your customer. Use the same theme, images (banner pages), and similar products.
Understand the importance of business logos
It’s the first thing potential customers will notice about your brand, make sure it’s presentable, professional, and polished. Make sure the logo connects with the needs and wants of your customers.
Create an experience for your Brand
Create a fun and informative environment to solve your customers’ problems
The Right Clients Are More Important Than Most Clients
Most of the business strategy is to get the cash at the door by any means necessary to attract the most customers. The problem is that you achieve all of this at the expense of quality, profit, and sanity. The right customers will allow your company to do a better job, build a better reputation, generate more profits and retain better employees.
Focus on your goal, objectives, theme, but above all on profitability
Don’t try to be everything to all customers. Specialize in solving the problems of your ‘target audience’ and have fun doing it. Even the largest companies do the best they can when they focus on keeping ‘mains as mains’.
They are the actions and applications that executives and teams put in place to achieve the desired results.
Leaders must step back to review their processes, individually or in cross-functional groups, to eliminate inefficiencies and optimize performance, annually or as the market changes.
Systems are the reliable processes and procedures that enable your business to consistently produce excellent results for your customer and profitability for you.
Automated process documentation can increase your business efficiency and reduce costly errors; the checklists your employees follow to ensure all orders are shipped correctly; the orientation process for all new clients when they start working together; and the standardized contracts you use with all your new hires and vendors.
Controls are the processes, procedures and safeguards that protect your company from uninformed or inappropriate decisions or actions by any team member. They’re also your company’s way of making sure key work gets done on time and in the right way.
There are (4) main types of trading controls:
- Dashboards/ Business Performance Measurement Metrics by Function (KPI)
- Built-in internal quality controls—product/process quality controls
- Policy and Procedures—written/measured
The systems (using excel and quickbooks), processes and procedures that worked for a $1 million dollar a year business, are not enough for a $10 million dollar business or a $25 million dollar business.
Scaling your business requires building it in such a way that your business model and systems can be implemented and replicated on a much larger playing field, based on increased sales volume of ordered/processed products.
For example, choosing a third-party fulfillment or database solution should be based on actual growth rates, not potential or forecast projected sales.
Cash flow and financial statements are your ‘lifeline’.
- Learn how you are making and losing money. Understand profit and loss statements and what processes and procedures relate to improving the “profit” of your business.
The financial means of the company, in addition, the necessary measurement tools to manage and keep track of finances and assets. Do you have the knowledge, skills and abilities to use those tools to increase your profits?
Small and midsize businesses must master the ability to manage their working capital and cash flow. Every company has access to profit and loss statements, balance sheet and cash flow. Management is using accounting software or someone is preparing reports for management.
How well does top management understand the company’s finances and correlates with their strategy? Do these managers understand which parts of the company need investment, where cuts can be made, and why?
Managers must take the time to learn the relationships and interdependencies between their tools and the reports they use to maximize their resources.
Teamwork makes DreamWorks
You can’t do it by yourself. It is essential to ensure that your business does not depend on the presence of a single person.
Even Steve Jobs and Bill Gates needed a great team to help them execute, deliver, and do everything behind the scenes to deliver their vision to customers.
Surround yourself with the best people you can find. Hire people who are smarter than you, then stand back and let them do their jobs. Remember that championships are won by teams, not athletes. Employees are hired to increase revenue or to reduce expenses in order to improve profits, for no other reason.
People are not your greatest asset; the right people are. The wrong people are your biggest catastrophe. Mediocre people are the biggest waste of resources.
Leaders should strive to create learning organizations where the organization is always pushing to improve. An organization where employees feel valued and contribute according to their abilities.
Effective management will create an organization where personal growth is expected and rewarded and where employees feel encouraged and satisfied.
Employees motivated by the vision and mission of the company will generate profits, but frustrated employees will generate losses.