I was recently contemplating, what are the most important aspects of running a business. Here in order of importance, is what I have come up with..
1. Add value
Provide something of value that people are willing to pay you for, after all, if you’ve nothing that people want, regardless of how much you might like your offering, it’s a non-starter. Find a solution to a problem, something that scratches an inch, so to speak. Find a need, find a want, and work out a solution to solve it.
Become a good deal maker. Middle men leverage their resources to help both creators and customers. They bridge the gap in such a way as to provide value to other parties.
Win-win situations are the best for sustainability, for customers, suppliers and partners. If you’re not providing some benefit to any of these parties, you’ve got a limited shelf life.
Find gaps in markets. Where are existing solutions falling short?
Use and combine existing solutions to create even more value. My photography business brings together makeup artist and photographer to provide makeover photoshoots. It adds value to the existing propositions of both services.
An effective business person, successfully executes the promised value proposition from sourcing through to production/service to final output.
2. Have the right mindset
Find and maintain motivation so that you take action and follow through.
Believe in what you’re doing or trying to achieve. But always keep number one in this list in mind.
Become self aware. Understand why you do what you do and don’t do what you don’t do.
Initiate momentum. Progress from a standing start into something meaningful. Once you make a start inertia will build and make things easier.
Take responsibility for actions and outcomes. No blaming others and complaining that this or that isn’t working out for you. Develop a can-do attitude.
Be resourcefulness, make use of yours and other people’s resources and make it happen!
Learn to be able to shift perspective. Re-framing how you think about something can often change your performance, because thoughts lead actions. Most of our beliefs are built on shaky ground, built from assumptions and inferences, rather than facts and evidence. I love to use quote graphics as a way of looking at something from fresh perspective.
Be committed to what you’re doing. Burning bridges, means you’re forced to give full commitment to a particular course of action. I’m not particularly advocating this extreme approach, but if you’re forced down one path, you’re likely to find a way, even if the road ahead is a bumpy one.
Develop a strong work ethic. You’ve got to be prepared to put the work in if you’re going to succeed. Sure you can look to make things easier, by working smarter, but the more you’re prepared to put into something, the more you’re likely to get from it.
Embrace change and uncertainty. Change and uncertainty presents uncomfortable risk for many, particularly if they live from hand to mouth or with little margin for error, in terms of indebtedness. From an evolutionary standpoint we’re hard wired to resist situations that present uncertainty, because our ancestors may have mistakenly wandered into the path of a dangerous predator in years gone by, possibly resulting in loss of life. These days, we don’t live with such life threatening consequences if we get things wrong, but we still fear any threat to the status quo, in much the same way.
Always try to overcome fear and inner conflict, because these feelings will inevitably hold us back from making progress. Often the fear is greater than the reality.
Pay attention to your coping strategies. Coping strategies are designed to prevent cognitive dissonance, but often we use them as excuses not to follow through. I call them coping excuses, because we justify to ourselves why we do or don’t do something, even if it’s not really the right thing.
Replace bad habits with good ones. Bad habits are hard to break, and often it’s easier to replace them with good habits.
Stay focused. It’s so easy to get distracted by the new shiny thing, but staying focused and maintaining progress is so important. Know where you’re going and measure progress against this. Be a meaningful specific rather than a wandering generality as Zig Ziglar used to say.
Be organised and work against a plan of action. Having a system to work within makes daily activities routine and habitual, and as a result much more likely to be done efficiently. The more you do things the better you get at them. This advice comes with a caveat though, don’t stifle creativity. Routine and organisation, is a left brain activity, creativity is a right brain activity, and it’s hard to keep switching between the two.
Improve problem solving and decision making. All life is about solving problems and making decisions and the better you can get at these, the more successful you will be.
Utilise IQ, EQ, talent and skill. Play to your strengths, improve and work at making them better, and use them to your advantage. You are uniquely you, so make the most of what you’ve got. We all have something.
Find the best way things can be done, not just the best way you can do them. Be a master of what you know, and an apprentice of what you don’t know. The moment you think you know it all, is the moment you stop listening and learning. Take the scientific approach and look to disprove your hypothesis, rather than falling into the trap of confirmation bias, where you look to confirm what you believe, while ignoring or rejecting anything that runs counter to them.
Find reliable sources of accurate information. Don’t be embarrassed to admit you are still learning. Life has something to teach us every day, even if it’s how not to do something. Always be learning.
Employ experts to help you. Don’t expect to do everything yourself, use the expertise and passions of other people to help your business. Get skilled employees, partners and suppliers to grow your business. Get others to do the things you don’t like to do, this underlines the point I previously highlighted about the importance of improving self awareness.
3. Master the art and science of Marketing and sales
Always be marketing and building your brand.
Think long term over short term.
Build your reputation, and influence what people say about you when you’re not there.
4. Understand your Financials
Financial literacy is essential to business success.
Turnover is vanity, profit is sanity.
Understand the importance of cash flow and the difference between it and profit and why you can go out of business even if you’re making a profit.
Study your profit and loss figures.
Use financial info for decision making.
Remember there are only 2 ways to make more profit, either by selling more goods and services (volume) or by making more profit per £ of sales.
There are only 3 ways to get more sales; by getting more customers, increasing transaction volume or by increase transaction frequency.
Keep costs down. They only rise if more is being spent per £ of sales or sales are increasing therefore increasing costs (volume).
Know lifetime value of customers and use this knowledge to work out your marketing budget.
5. Have direction
Be a meaningful specific rather than a wandering generality as Zig Ziglar used to say.
Have a clear vision and goal to give you a strong sense of direction, otherwise you’ll by like a rudderless boat, being dragged around by the tides of circumstance.
Develop a definite plan of action and strategy, but build in room for flexibility, because sometimes things come along we could never have anticipated, and we shouldn’t reject them because they don’t fall perfectly in line with what we were intending to do. Just be wary we’re not being pulled unnecessarily and unproductively off course with no benefit.
Work on the business not in it. Don’t lose yourself in the day to day stuff, you’ve got to keep one eye on the big picture at all times.
Be ahead of the demand curve not behind it. Otherwise you’ll have to work harder to maintain income, because of the downward pressure on prices later in products life cycle.
6. Future-proof yourself
Disrupt your own business model before others do. Technological advancement is so rapid these days, you’ve got to keep an eye out for major shifts in your industry. The music and film industries have endured major industry shifts over recent years, and they won’t be the last to do so.
Innovate. Always be look to be better, faster, be more convenient, provide better quality, and add more functionality to the value you provide.
Demand continuous improvement, from yourself and your team.
Consider multiple income streams to hedge and spread risk. Having your eggs in one basket is a dangerous game to play in such a fast moving and changing environment.
If you’re not progressing you’re falling behind, so drop the idea of maintaining the non-existent status quo.
Always be doing SWOT analysis. SWOT which stands for strengths, weakness, opportunities and threats is a great tool for analysing your business. If you pay particular attention to the threats your business faces, you have a chance to turn these into opportunities, and disrupt your competitors.
Use cost benefit analysis to weigh options.
Use Decision matrix when considering options, so that you fully analyse all the variables and attributes in play.
7. Be a good Leader
Lead your team.
Use a carrot over stick approach.
Sell your vision to your employees. Get them enthused by your passion.
Encourage contributions from employees. Two minds or more are often better than one. They give you an opportunity to see things from a different perspective, from someone with different life and work experiences than yourself, and this can only be a good thing to tap into.
So there you have it, hope you get some value from this post, please share with anyone you think will benefit from reading it.
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