Article by Peter Connor
You started it, will you finish?
For Business owners, forming a business is a courageous step on the road to creating wealth and personal independence and freedom. In business, your day is always complete with many challenges. Dependent on the business and your daily role in it, the issues that you as an owner deal with, are of course many and varied. It’s easy for the days, weeks and months to move by quickly without really taking a look at what is driving the business activity and direction. Almost everything that goes on in the business and the related business problems can appear to become almost automatic.
As the owner or partner in the business, you will of course address and nurse every problem and situation with all the resources at your disposal to bring about solutions. All this day-to-day activity can sometimes leave some uncertainty around the direction the business is taking. Invariably, because things become automatic, you invariably don’t get enough ‘time-out’ to think creatively about where the business is going. Without this time, you aren’t afforded the opportunity to establish what you personally and professionally want out of the business, and to creatively design a clear strategy for the business. Without this strategic thinking time, you can just end up running a business with no clear mission for everyone to buy into, unclear values and ‘fire fighting’ related action plans.It’s Your Business, isn’t it?
Many company founders, because of their emotional connection with the birth of the company, also act like a parent to their company. They think about the company subjectively, and not as they should, objectively. The company may have been formed out of a great idea and with the right intentions, but without any major objective planning. This means they don’t always make appropriate judgements about the company direction, or action plans. They also may not have a defining purpose about the business, which effects the direction of company as well as personal activity. Also, they may not have an investor’s view of it, and are not sufficiently market driven. Indeed, one of the main reasons that businesses fail is lack of appropriate action at the right time.
Allied to all this unfortunately, is the fact that a majority of businesses do not give appropriate returns on the initial investments of time, energy and funding. At Start-Up also, the owners and partners may fail to clarify the idea sufficiently, before they plough resources, time and money into pursuing the business idea.
Did You Plan This?
Examples of this are quite common in many businesses. They have a knock-on affect in all areas of the business. Most Business founders do not think and plan an Exit Strategy and how they will leverage sufficient financial returns from the business over time. They may not assess accurately, the feasibility of the ideas and assumptions about the business, prior to setting off on a course of action. They may not ‘run the numbers’ effectively enough to challenge their assumptions about the financial viability and cash flow potential of the business.In assessing the likelihood of the product and service being successful, examples of factors that very often are not assessed sufficiently are, size of potential market, level of customer need for the service or product, the length of the sales cycle and the buying process, the Psychology behind the purchasing decision, profit margin, how often repeat sales will happen, route to market and possible exclusivity. There’s a very competitive landscape out there, and only those who have designed an effective and ‘practical’ strategy and plan will survive and thrive.
Challenging the Marketing Plans
In the Sales and Marketing function, an unclear strategy can mean we haven’t defined our target market and client profile. Market and customer profiling is very important, but not always thorough. Awareness of competition, pricing, brand issues as well as the chosen communication and promotion channels to prospects and clients are also important. We may not have defined clearly enough, who we are going to market to, who we serve and what are their real needs. Additionally, what business problems does the target customer experience, that we could help them solve. In growing a business, if you are always thinking about “how you can get more sales at company ‘X’”, and not “How can I help Company ‘X’ get more business, or solve their business challenges and problems, you’re possibly heading in the wrong direction. You must get to know all about your customer. All of this of course will manifest in undeveloped prospecting and opportunity management processes. It can also result in poor motivation to close sales for your company or time spent chasing business that really doesn’t fit with your target market strategy, or that you in reality won’t or can’t win.
Service Levels & Costs
In delivering the requisite service levels to your customers, you might find that because of unclear Strategic Thinking and Planning, your people are not sufficiently motivated to deliver high levels of care and service. Without excellent service, in this competitive world, your customer relationships will not engender repeat business. You may also have inappropriate customer feedback mechanisms to further weaken your personal relationships with key decision makers.
In controlling your operating costs, you’ll know from experience that there’s a lot of busy work out there. If you truly assessed the daily work activities of your key people over the last 3 Months, you’ll see lots of busy work that has led to no tangible benefit to the company. If a clear company mission, vision with prioritised plans doesn’t drive your key people, it’s going to push up the overheads and reduce the overall profitability. Do you know where the leaks are in budgets and actual?
Company Culture revisited
Your organisation culture and structure continues to be the potential heartbeat of the company. If you can rally the team around the mission of the business, you’ll be heavily supported in achieving what you really want. If your culture doesn’t foster a motivated workforce, every day will be a struggle. There are certain core competencies that key people in your company will need; it’s your responsibility to foster these winning traits and skills.Your core business processes and the technology that supports these may not have been looked at in the context of how they can enhance service and client relationship building. Failure in these areas alone can end up being the cause of many of your day-to-day business problems.
From Concept to Reality
Recent research from Government agencies in the Small to Medium business sector provides some interesting information. Most businesses have begun with someone with great intentions, a motivation to start their own business, a good idea, an initial business plan and some sense of the market and initial client(s) who’ll buy. Because they want or need to get going, very few companies think or plan strategically at the outset or in the early stages of the business. This inevitably comes back to bite them at a later stage.
The costs to your business of just operating on automatic without a clear plan are much higher than you could imagine. You can’t assume that everyone in your business will be as passionate as you about the aims of the business. If there’s no obvious plan, an unclear mission in the company, or if your people don’t know anything about the plan, you’ll only get less than 50% of the potential from your core resource, the people. While processes and supporting technology are important, if you haven’t got a totally motivated workforce in these competitive times, you’ll run into problems in the business. Costs to your business without clear plans are specifically seen in lost sales, writing bad business, below par service, no customer relationship management, profitability, ineffective cash flow, poor staff motivation and attitude.
In short, every business should have a strategic plan, you’ll see how to simply execute your company’s strategic plan, as follows.
DiSC Profiling
