What do you need to start a Business and more importantly what don’t you need?
Well, when I first started out building my legal practices, like most people launching a new business, I thought that because I knew something about how to run a legal practice and that I could get clients, that this was all that was needed.
Welcome to the first obstacle!
The fact that you know a little or a lot about your particular endeavour does not qualify you to run a business, let alone be successful at it. You see the thing is that you may or may not be an entrepreneur but you could well be a business owner; there is a big difference between the two, although at first glance you are taking a risk by opening your business which could make you think you’re the entrepreneur type.
If you think you will be happy and fulfilled sticking to one business and that business probably being the one you think you can make money from, then most likely you’ll have a business owner profile rather than an entrepreneur profile.
Whatever the case, you will need a steel resolve, a good sense of humour and a lot of resilience whether you’re taking on the world or simply deciding to start a small business.
There is so much stuff you can read on business from “the Great Game of Business,” by Jack Stack to “Right Away and All At Once,” by Greg Brenneman to “The Lean Start-Up,” by Eric Ries, “Great by Choice,” by Jim Collins, Delivering Happiness,” by Tony Hsieh to “Confessions of the Pricing Man” by Hermann Simon, that even to comment on the subject seems a waste of time.
However, what I’ve found by reading hundreds and hundreds of books on everything is that the more you read, the deeper the insights into everything from the human psyche to the complexities of building a radically successful business.
Now, as you go forward with your plan or your business there are a few essentials I would like to have known when I started out. No wait!! I probably thought I knew it all and needed no input from anybody. You see being a lawyer and having the essential grounding to run a legal practice still did not qualify me to own a legal practice let alone a couple of them. My identity was simply that of a lawyer, working as a lawyer for clients, but certainly not the owner of a legal practice and treating the legal practice as a business, two totally separate and distinct things.
Whilst building up the legal practices to be successful, that did not qualify me as being any sort of expert on business. However, the subsequent businesses of a restaurant, bottle shops, real estate developments, a real estate agency, psychotherapy practice, horse stud enterprise and investigating a Pizza Hut franchise (with the guy who first introduced them to Australia), certainly gave me some idea that that there was a lot more to learn than I knew. You see, you don’t know what you don’t know, as they say.
Now, as to 10 things a start-up Business owner should have before considering whether she/he can launch the business –
- Key Value Drivers. You will benefit by establishing the key value drivers that will fuel the economic engine. For example, sales leads in a capital goods or services industry, sales per square metre in a retail business, machine downtime in a factory. Other things like enquiry levels, number of leads, or quotes given are important as well establishing your enquiry to sales ratio and average sale and using the enquiry level to forecast revenue.
- Questions. In finding out the key drivers that will propel your business, some questions might be, What drives the sales figures? What drives the costs? What drives the cash flow?
- Business Definition. What is your Business Definition, as Greg Brenneman says, and what does your business do and who does it do it for?
- Competitive Advantage. What makes you unique and stand out, who are your existing competitors, what is your bargaining power and the buyer’s? Are there any new players?
- Core Business. Are you sticking to your core business and if not why not? Diversification is for later when you have nailed your existing business.
- One-Page Plan. Once you have established your key value drivers write a one-page plan. Most scale up experts encourage business owners to do a simple plan that works for them.
- Processes. In the one-page plan refine your sales and marketing processes, set overall tangible goals that equate to success. Align strategy and tactics and make sure tactics execute strategy, listing tactics in bullet point form.
- Execution Management. Manage execution by assigning dates, performance expectations and responsibilities.
- People Management. Manage people by giving clear objectives, specific measurements, metrics and milestones
- Cash Management. Manage Cash by keeping an eye on all your Income statements, cash flow forecast, break even figures, P&L accounts and marginal cash flow ratios to name a few.
When you have simplified all this into one page you may be close to understanding what your business needs to go forward faster and how to scale up to beat industry standard.
As they say, “rinse and repeat,” and compare your plan to the subsequent results you get.
Image Credit: Unsplash.com/Hope House Press
Chris Borrett