The Pillars of Business Success
You should not even think about expanding your business until all the fundamental aspects are working properly. Businesses have four main pillars that need to be in place before it can be expanded. We are going to now discuss what they are and how you can build them.
The first is only a mindset. What does that mean? The business owner has to be accountable and has to take ownership. He also has to be responsible. Many business owners go into denial, blame and excuses. Whatever you tend to focus on, that is what you are going to get more of. If you tend to focus on problems, which is what denial, blame and excuses do, you tend to get more problems. We challenge the owners to change their attitude and then that change will alter the circumstances and the destiny of the business. This is probably the most important quality in a successful business – the mindset of the business owner.
If a business doesn’t make it, could it simply be a lack of experience? Yes, lack of experience, lack of wisdom and ignorance can lead to poverty. “What you do not know cannot hurt you.” No, it can kill you. Business education is essential in growing your business. Sometimes we get caught up in our own little world and we think we know everything. When we can release ourselves from that prison and understand that we need to invest in our own mind, then as we will improve and so will our business.
The second pillar is cash flow. It is not just a question of bringing it in, but also a question of how to stop it from escaping. Many small to medium businesses tend to want to build their business very rapidly. In order to build a business, you need to have a foundation which is called cash flow. It is important that a business owner has a comprehensive understanding of what makes up cash flow and ways to improve it. You cannot grow a business without cash. Unfortunately, many business owners, when they do not have a lot of cash, they go into anxiety, worry and fear. It is very difficult to run a business when you are only sleeping two hours a night because of worry. First things first, reduce your worry by stopping the cash flow leaks and then work to build up your engine. Which just happens to be the next pillar.
The third pillar is in understanding the importance of systemising the business. We need to almost treat our business like a car. Once you have stopped the cash flow leaks, you then need to build up the engine. In most small to medium businesses, the owner is the business. Let us say your business is running at 200 kph/hour on a 4 cylinder engine, if you accelerate it any more, you will blow out the engine which just happens to be you the owner.
You have to replace yourself by building systems. Then the systems become the business. It is difficult to get great people. So what you need to do is to create great systems that make average people look great. You need to systemise every part of your business in such a way that it should effectively run without you. Now, I am not suggesting that you franchise your business. Just consider the philosophy of franchising to build a business that is highly leveraged, highly scalable and also give the owner an exit strategy when he or she chooses to sell or to pass on the business.
Now, do not think about expanding until you have these fundamental systems in place. You can expand your sales and marketing – but what will happen if you are already working 80 hours a week? All you have done is now force yourself to work 120 hours a week. Whereas creating systems gives your business leverage. A system will be like dropping in an 8 cylinder engine into your little car. Now you can accelerate.
As you expand your business engine, you will also experience revenue growth. This is the fourth pillar. Once you have a larger engine, then you have capacity. In my opinion, the greatest and most fun way to grow your business is through revenue growth generation. Yes you can rip out costs; but you can only rip out costs to a certain degree then the business and the foundation of the business will become very shaky. In revenue growth strategies, you have to look at your business from five variables. You must look at it and ask: How can I generate more inquiries or leads? How can I increase the average dollar sale? How can I increase the conversion rates that I am receiving at the moment? How can I increase the frequency of transaction? How can I increase the margin?
Here is the key: Before you improve something, you have to know where you are at. You have to test and measure what those variables are and then you have to introduce strategies. Once you have introduced strategies, then you have to see what results those strategies have delivered. Eliminate anything that is not working and then systemise anything that is working as part of your sales and marketing system.
We should also talk about the principle of multiple touches. In any business, it is very important that the business owner realizes that not every strategy is going to work. In my opinion, one of the greatest challenges to a business owner is that they do not try enough marketing strategies. You need to have multiple marketing strategies working at any one time. What tends to happen is that we have a flood of new business. Then we stop marketing our business and then we go from a flood to a drought. It is important to have an engine that is consistently marketing all of the time.
So, before you accelerate your business too hard and too fast; concentrate on building and fortifying the pillars of your business. Create a positive mindset, stop the cash flow leaks, systemise your business and build revenue growth and then you will be able to accelerate your business into the fast lane.
About Tony Gattari, Achievers Group
The author is founder and Chief Energy Officer of Achievers group. He is a much in demand passionate professional speaker, business educator, author and corporate, business advisor. He has worked with over 140 businesses around the world.
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