If you are in the process of starting a small business, chances are you are in need of some highly effective advice and tips.
You are discovering there is more to owning/running a business than simply opening the doors and building a website.
When it comes to starting an enterprise, you need good management. You may already be pretty good at that. But your business also needs leadership. That means spending some time in the future.
Let’s look at the process of envisioning a great company and beginning to behave like one from the very earliest stages. (Good advice from Thomas J. Watson, founder of IBM.)
At Team 80, we understand it can be daunting when it comes to starting your own successful, smoothly working business. Here are twelve things successful businesses do:
Tips For Starting A Successful Business
- Have a Detailed Vision in Sight: This is the first tip as it will be the very foundation that your business is built on. Envision your fully operational company five years into the future (including an exit event.) Choose a Core Purpose and the Core Values that will define your organization and let this vivid vision guide you on your journey.
- Write Out an Execution Plan for This Vision: This will be the outline for your entire business. Consider this execution plan for achieving your 5-year vision to be your how-to-manual for your business. It is the tool that you will use to review your milestones, budgets, tasks, and your 3-year, 1-year, and quarterly goals. Make it quantitative: what will sales be, gross margins, headcount?
- Choose The Right Legal Structure: A legal structure well attuned to your planned day-to-day operations (including exit) will impact everything from your taxes to your reporting obligations to your personal liabilities. You will choose between being a sole proprietorship, partnership, corporation, S corporation, or Limited Liability Company. Most small businesses will opt for an LLC, possibly accompanied by an election to be taxed as an S corporation.
- Create a Functional Organization Chart: An organizational chart designed around your finished business can help visualize the flow of leadership from ideas all the way through to delivering your product or service to your customers. This is a functional organization chart. That means you don’t initially drop names into the boxes, but, instead, use a shorthand description of what needs to happen within the boxes. Lately, we’ve been recommending adding a separate box labeled “The Future”, to encourage businesses to remember everything changes and to build in the continuous adaptation process needed for sustained success.
- Detail The Functions of Each Position: For each of the boxes you created for your functional organization chart, create a Position Agreement which describes what needs to happen within that box, including what outcomes are produced. List up to 5 major roles for each function. Describe how the function supports the Core Purpose of the business and which other functions it supports or relies on for support of its own activities.
- Devise a Hiring Plan: Once you have assessed your specific needs using a functional organization chart and Position Agreements, you will need to create a step-by-step hiring process for identifying and attracting the right people. You are looking for 3 specific traits in each position: (1) people who clearly understand the job, (2) people who are passionate about doing the job (share the Core Purpose and Values), and (3) people with the capabilities needed for the job.
- Create an Active External Advisory Board: Let’s face it, you are going to be very busy working “in” your business. Setting up an advisory board that meets quarterly helps ensure you set aside some time for working “on” your business. Having advisors who are from outside your business keeps you in touch with the world where your customers and competitors live. A good advisory board is not a place to get your questions answered: its where you go to get your answers questioned.
- Develop a Target Market Analysis: A written out analysis of your target market will help your company allocate funds effectively as well as help identify the audience that will most likely use your product or services. Create a marketing persona that embodies your customer or audience. What emotions do you want to stir in your customers? What pain are you addressing? What is your unique selling proposition (USP)?
- Create a Marketing Plan to Address Your Marketing Target: Now that you have identified who your audience is, it is time to develop a written plan for penetrating your target market. Find the channels and mediums where your audience is, and create useful, relevant, attention-grabbing content/advertisements that are geared specifically towards them.
- Establish Process for Business Activities: Well thought out business processes will make it easy for your employees to understand and identify day-to-day business activities from making coffee to customer fulfillment. If it is not in writing, it does not exist. Good systems lead to great businesses. Use some of the time your systems save to continually improve your systems, Spend the rest of the time with your customers (or family).
- Set an Annual Operating Budget: Take the Quantitative Execution Plan you developed early in your planning and before the start of each year, create a budget that represents that year’s annual slice of your execution plan. Don’t just take the current year results and project them into the following year. Make your budget strategic by having it reflect the “big rocks” in your plan to improve your results. What will you stop doing next year? What will you start doing? What will you do more of? If you have more than 3-5 big rock initiatives, they aren’t big rocks.
- Lead Your People/Manage Your Business: It is a reality of business that there is never enough time. You must make time to pause often and think of two things:
What can I do to help my people?
How are my numbers?
We know that sounds a bit unusual. But good business leaders know how to inspire their teams, while at the same time holding themselves and their teams accountable for results. Know your key performance indicators (KPI’s) and make sure your team knows them as well.
12.5. (Bakers Dozen?) DON’T FORGET TO HAVE FUN!