Over the past years as a business coach, here are six factors come to my mind that create business success.
1. Distinguish between what you can influence and what is out of your control, then focus on what YOU can do and take action. Many challenges affect your business. It is your response to these challenges, not the challenges themselves, that ultimately determine your success. You can’t control “the economy”, but you can control your perception and response to current economic conditions. You can’t control other people, but you can develop your leadership so that you attract and retain great team members and customers. You are your biggest project!
2. Understand money. If you are going be successful in business, you MUST master finance. If you run out of cash, you crash. You must know and understand your basic numbers, beginning with a clear handle on your cash flow. Are you really making a profit? Sadly, most small business owners have no idea. Consequently, they set pricing based on other failing small businesses (80% of small businesses fail within the first five years of business) or try to foolishly compete on price with big box and huge on-line retailers. To thrive as a small business, you must create such an amazing service/product so that pricing is not the primary draw for customers. Also, you are not a bank. Quit allowing people to keep the money they owe you. You need to keep and serve great customers, and fire lousy customers. People who don’t pay their bills need to go away.
3. Quit wasting money on advertising that doesn’t work. Instead, view marketing as an investment, and test and measure what you do to determine if it is bringing you a profitable return. Again, it’s knowing numbers like customer acquisition cost and customer lifetime value.
4. Hire slowly and realize that an employee without a clearly defined job is wasted overhead. Hiring other people before you are ready is a quick way to go broke. It’s unkind to you and to the person you hire. Also, keeping non-performing employees is a huge mistake. If you can’t work with them to solve the problem, then the best thing you can do is replace them with someone who gets the job, wants the job, and can do the job.
5. Confront problems quickly. If it is bothering you, then deal with it. Get help from other qualified people. It is a key to solving problems. You MUST have a great accountant. Period. If you are not ecstatic with your accountant, then it’s time for a change. Also, develop strategic alliances with financial and business resources that can work with you to create and pursue opportunities that make sense.
6. Define your vision, know your values, and create a plan. Knowing your why, your non-negotiables, and where you want to go are key to business success. Your business ought to be a challenging game that you really enjoy!