Most start-ups and newer business owners have a skill set in at least one area of their business – it might be on the business management side – such as accounting or marketing – or on the product execution side – such as massage or plumbing. It is rare for anyone to have the full suite of business expertise to actually grow their business. So, how does a business owner make sure they are addressing all areas required in their business?
Having built a business, and mentored more than 100 small businesses, we’ve found that a business owner needs to have at least an overview of the key elements of their business, including: their goals for the business; the markets, customers, products, sales and people that will achieve their goals; the systems, processes and online tools that support their product development / delivery, marketing, sales and people; their budget, and how to understand their key financials; and what’s next for the business to achieve their medium and longer term goals.
This may sound like a lot – but you don’t have to be an expert in all of these areas. Having said that, it’s ideal to have some understanding, and have your high level goals and activities written down.
Setting goals for your business is both an art and a science. Goals should be SMART – specific, measurable, achievable, realistic and timebound. Another element to consider is the order and number of goals. For example, once you’ve set an overall financial goal that includes profitability and growth, then ask ‘what sales do I need to achieve this’, then ‘what products to what customers make up these sales’, then ‘who do I need in the team to achieve this (production, delivery and sales sides of the business)’, ‘what systems and processes are critical to support all of these activities’, and ‘what do I need next to continue growing’?
A series of ‘cascading’ goals ensures that you’ve considered not only the end game, but what you need to measure to ensure you’re on track. Whether your budget is an Excel Spreadsheet or part of your accounting system, it is important as a business owner to understand the key numbers that are driving your goals. Profit and cashflow are the product of a number of other outcomes and the more you understand your financials, the faster you will be able to address any shortfalls.
In understanding what marketing efforts will deliver your sales goals, think broader than just about ‘# customers * # products’. Your products and services must first be relevant to your target customers, and continue to be relevant. So, determining your ideal customers and knowing as much about them is important for any business. Knowing your customers will also help you determine the best messages, as well as marketing channels to reach them. Not all of your customers will respond to a post on Facebook, and not all will respond to a direct enquiry. By knowing your customers, you can ensure that your sales efforts give the best results for the effort.
To understand the people you need to make it all happen, think outside the usual ‘employee’ resourcing model and take into account consultants, referral partners, expertise partners, mentors and others in your network who can refer business and provide advice. Also think about what training your team could use to achieve your goals.
Once you’ve considered customers, products and your team, there will be a number of tools you can use to support your activities – many of which are available online or in ‘the cloud’. Most businesses implement an accounting software system, but your website (and your social media), your email newsletter system, your customer relationship management system, and your employee time management system are all processes that may have a cloud solution that’s suitable for your business.
Every business also needs to know what they need to do to maintain growth. It’s not just about new customers, but also about increasing the longevity of the customers you have. What else might they need next year and the year after that? How is their environment changing and what can you do to help solve their problems? What new technologies can you now access to provide better value for your customers, and lower costs for your business? Businesses that build these questions and answers into their processes are more likely to create new value on a regular basis.
Most business plan templates have sections for all of these elements. And if you’re not sure what people or systems you need, always go back to your goals and ask ‘who do I need on my team to achieve this?’, and ‘what systems and processes will make this happen, or make this scalable?’.
First published in Business Life, Vol 1 No 1, February 2016