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Commercial Vendors Edition - August 2005
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I hope you enjoy this article about running an effective small business.
The 5 Habits of Highly Successful Small-Business OwnersHave you ever wondered what the difference is between a business that consistently grows and another that struggles just to make ends meet? Or why a business that was started in a basement of a home can outperform some of the best-run "big" companies in sales and profits?
Two businesses, operating in the same marketing arena and selling the same products or services, can have extraordinarily different results. How can one business continually grow and prosper, while the other struggles? How can one business owner run a highly successful business while still spending a good portion of his or her time away from the business on trips and vacations with the family, and another owner work day and night only to see his business fail?
Such questions have always intrigued me. In my quest to answer them, I sought input from successful business owners. I became a student of business. I read every business book I could get my hands on. I enrolled in seminars and courses across the country. I listened to audio and videotapes of some of the greatest minds in business.
What I learned has been truly transformational. In this article, I will impart to you some of what I have learned. For the most part, there is no such thing as a successful or unsuccessful business; there are successful or unsuccessful people, entrepreneurs who run businesses. Becoming a successful entrepreneur requires a certain self-image, a certain mindset. I like to refer to this mindset as the "5 Habits of Highly Successful Small Business Owners."
Here they are:
Habit #1: Have a clear vision of their business, and commit their vision to paper"A man to carry on a successful business must have imagination. He must see things as in a vision, a dream of the whole thing." -- Charles M Schwab, American stockbroker
The chances of your small business' success improve substantially if you have a clear vision of what you want your business to look like, and what you want it to accomplish for you in the future. Your vision is your dream for the future of your business and it should delineate the path you will take to turn that dream into reality. You need a crystal-clear vision, one that you can communicate clearly, with vitality and a strong sense of commitment. Everyone involved in your business must comprehend your vision and, even more important, must believe in its success as much as you do.
Setting direction and guiding the business toward reaching your vision will make it successful. Vision is the owner's business philosophy. It's his "double vision" - his ability to keep the business' long-term dream in mind while micro-managing the business on a day-to-day, hour-by-hour basis.
Successful entrepreneurs commit their vision to paper. In all my years in business, I have found that not doing so is the single most fatal error a business owner can make. There's a direct correlation between having a well-thought-out, written vision statement and the success of your business.
Your vision should be a written statement of what your business will be when it is complete. It is a detailed picture of the future - what your business will look like, act like, smell like, feel like, and how it will perform when it is fully developed. Some of the things your written vision statement should include are: (1) the line of business you are in, (2) your company size, (3) the markets it will serve - demographics and psychographics, (4) the number of employees you will have, (5) the number of locations that you will operate from, and (6) what competitive advantages will differentiate your business from your competitors'.
Habit #2: Put the proper systems in placeYou need systems to be able to deliver a product or service in a predicable and consistent way. All successful businesses have a "how we do it here" manual, also referred to as a "policy and procedures" manual. Standardize your procedures so that everyone knows what they are and how to do them. These procedures involve production systems for your products or services, systems to deliver those products or services, systems to track new customers or clients, systems to help you keep up with your finances, systems to hire and train new employees, and the list goes on.
Look at the systems that operate within the McDonald's chain. A McDonald's in the Bronx operates exactly the same way as a McDonald's in Palm Beach. It runs just as predictably and profitably in either place. Why? Because there is absolutely no area in which procedures are not specifically spelled out through documented systems. Every procedure is outlined so clearly that anyone can be put into the system and taught to function at an extremely efficient level in a very short time.
Documented systems can make a difference to your own time, as a business owner. Without such systems in place, everything depends on you. If something happened to you, even for a short period, the entire business would be thrown into chaos. With properly documented systems of management and organization, a key employee (even you!) could leave suddenly, and the business would not suffer. You could replace the employee with minimal disruption. As new problems come up, you can adjust the systems you have in place to accommodate the needed changes.
If you set up the right systems from the start, they help run the business. You can be free to spend your time however you wish: more personal time for yourself, more time for your family, your community, and more time to enjoy a richer, more balanced life.
Habit #3: Know what they don't know and then quickly get the help to fill the voidMost small business owners don't realize that having an occupation or skill does not necessarily equate to building a successful business around it. It takes different skills to build a business. Let me give you an example. A personal friend of mine, John Chang worked as an engineer for 12 years before he started his own engineering firm. He was considered to be one of the best engineers in his firm before he went on to start his own engineering company. But John had never run a business before, and he did not have the knowledge and skill to operate his new company successfully, despite his engineering expertise. There is a lesson to be learned. The sooner you, the business owner, develop entrepreneurial skills, the sooner you will turn your expertise into business success!
You will need a number of different skills; financial, marketing, management, and customer fulfillment skills are among those required if you want your business to run like a finely tuned machine.
Can you imagine an athlete training for the Olympic competition without a coach? Of course not! Nor can you develop these skills without qualified help. A business coach will help you think in a new way, show you how to stay on track with your plans, and ultimately achieve your vision.
Habit #4: Have a mindset of preeminencePreeminent (adj.): excelling others, outstanding.
The business owner has to have the mindset to view his business as a product - not the product or service he is producing, but his whole business as the product. It's an entirely new way of thinking, and as soon as such thinking is adopted in any business, the business begins to make massive leaps forward.
As the business owner, you have to learn how you can give your customers or clients the best possible experience; to enable others to see your business as a trusted, valued, respected, and expert advisor. This mindset can be applied to any type of business. You have the responsibility and the obligation to provide guidance and direction to your customers, and to give them the best short-term and long-term outcome.
Many times, I have seen business owners make one simple, but momentous, mistake. Instead of "falling in love" with their customers, they fall in love with the size of the company, growth of the company, number of employees, or the market share. The way to greatness today is to transfer your ultimate passion away from products and services, and toward people! By doing so you will begin to look at your business as a whole, and any interaction that the customers have with any parts of your business, as part of an overall experience. If you as the business owner are focused on making it the best, most rewarding, most fulfilling, most enjoyable experience for the customer or client, you will dominate everyone else in your business sector.
A strategy of preeminence - of excelling - along with the approach of looking at your business as a whole, is truly transforming. If this is the only idea from these 5 habits that you take to heart and adapt and implement, you will see a significant improvement in your business.
Habit #5: Work on their business, not just in itThe successful small business owner understands the real value and reward that is derived from working on the business rather then just working in the business. She understands that working on the business means viewing her business as a whole. She sees her business made up of various parts that integrate seamlessly to function as a whole.
Working on, instead of "in" the business is strategic work. It is the way businesses transform themselves from vision into reality. It requires asking strategic questions and then doing everything to find answers to those questions.
Smart entrepreneurs do the necessary strategic work, and regularly ask the following questions:
* What is my market share?
* Who is my ideal customer?
* Where is my industry headed?
* Who are my competitors?
* What are my competitive advantages?
* What are other successful businesses in my industry doing?
* How do they market their product or service?
* What are other successful businesses outside my industry doing?
* What is the "experience" my customers are having with my business?
* What is the "experience" customers are having at my competitor's place of business?
"Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning." --Albert Einstein
Article provided by:
Salim Omar, CPA
Author of the newly published book, Straight Talk About Small Business Success In New Jersey.
Owner of the website http://www.OmarGroupCPA.com. Reprinted with permission.
Article Source: Ezine Articles
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