Despite the bad news we so often hear about the number of small businesses closing or moving, the news really isn't all that bad. Thousands of small businesses startup every year, and a good percentage of those companies have learned what it really takes to survive the early startup years and become successful enterprises.
But what elements or ingredients are important to ensure the success of small-business owners and entrepreneurs? Innovation, timing, start-up capital, product improvement, a good team and so the list goes on and on. Yes, I kno, this is all true, but I find that it is not helpful unless you can categorize all the elements and put them into perspective.
Although many enterprises may be in the same industry, every business has its own business model that it follows. Think about it for a moment…they might have to adapt their model from time to time, but they have found the right the “recipe” that works for them. What is the “recipe” for your business success? I am going to tell you very briefly about my business model and use it as an example so that you can understand what I mean and focus on realizing your own model.
Why? Because if your business model does not start giving results within a short period of time (within +- one year), then you are wasting your time as an entrepreneur. My business model (recipe) in a nutshell: I give computer training so I am naturally in that industry. This is a hugely competitive industry and my recipe is to focus on one-to-one training and in more specialized graphics programmes like Adobe and not Microsoft.
Its as simple as that and it has been working for me for the past 18 years. So how do I survive and stay in business year after year? Firstly, because I have found the recipe that works for me, but also because, secondly, I have categorized all the success elements into the 4 P’s: 1. Principles, 2. People, 3.Passion and 4.Profits. If you slip up in any of these 4 areas, you and your business will be in big trouble – no matter how successful your business model currently is.
If you slip up, you will be on a downward spiral. Now let me help you understand as easily and as quickly as possible what the 4 P’s stand for. 1. Principles: These are your core values on which you operate daily. Every minute of the day YOU set an example of trustworthiness. My business mentor and life coach once told me: TRUST takes years to build, but once broken, it is like a rider on horseback who will gallop away from you very quickly.
Your business reputation is everything and there is no place to hide. A bad product/experience will go viral on Facebook like a runaway fire and people will not support your business. People have confidence in trustworthy individuals and want to work for them in a culture of integrity. Just how trustworthy and honest are you in your business dealings. Remember: “Little white lies” = Untrustworthyness.
These “little, self-justified, white lies” are the matches that will burn your business to the ground. Here is a slogan I have made my way of life: HONESTY IS THE BEST POLICY. 2. People: You will notice that I have placed people second and Profits at number 4. Should you place Profits second in your business, you will soon find that customers / clients will no longer support you. The Customer is King. Stay in touch with what your client wants and give 100% customer satisfaction. Don’t bombard people with SELL, SELL, SELL, SPAM, SPAM, SPAM.
Build a relationship with people and listen to their needs and you will be able to adapt and grow your client/customer base. The days of “make ‘em and the people will come” is long gone, but unfortunately, not that mentality. Product quality today is a given. Present "short-cuts" on your product and you will lose very quickly. It is customer service, customer satisfaction, customer relationships that you have to focus on more than anything else. This is now scalable with the use of social media and a blogging or website platform. So make a point to place people above profits. 3. Passion: You must have a passion for your business. Work should be fun. Your passion will help you overcome difficult moments and persuade people to work for you and want to do business with you. Passion can't be taught. And it should be renewed daily.
No one is ever going to be your biggest fan, more than yourself. It stands to reason that you are the champion and biggest cheerleader of your business. You must cultivate the habit of being inspired as well as inspiring to others. This will help you stay enegized through the up and down cycles that any business goes through.
Therefore it is up to you to cultivate the skills and habits to keep yourself motivated and on track each and every day. 4. Profits: Results is the name of the game. Making a monthly profit is the life-blood of a success business. I live by the slogan that says: TURNOVER IS VANITY, BUT PROFITS IS SANITY. You cannot grow your business too fast and lose track of profits. Although turnover and cash flow is important…if you are an entrepreneur or small business, you cannot be tempted to think that profits within the first year is not important.
Financial discipline; adapting by cutting your losses early and understanding the importance of productivity are concepts that should become part of your business blueprint. Companies that don’t make a profit or hide their profits with “clever accounting” will soon be in trouble (Olympus and Kodak are recent examples that come to mind). Starting and running a successful business can be rewarding and challenging. Success requires focus, discipline and perseverance. However, success will not come over night - it requires a long-term focus and that you remain consistent in challenging environments.