This articles come from The Five Steps to Building a Successful Business course. This course is the product of working with small businesses for twenty-plus years and asking a simple question: Why do certain businesses succeed while so many struggle and ultimately fail? The Five Steps to Building a Successful Business will teach you how to successfully start and grow a business, or turn a struggling enterprise around. Check out more articles from the Five Steps series.
Successful owners build their business atop five key interconnected principles we teach in sequential steps. Business that struggle or fail lack one or more of these principles. Here’s a brief intro to the Five Steps to Business Success:
Step I: The Business of Business: Successful owners understand that the moment they take their skill or passion to the marketplace they have embarked on an entirely new career - The Business of Business. Like all careers, the Business of Business has its own definition of success and required skill set. The Business of Business also has three specific challenges successful owners must overcome: the Statistical Challenge, the Financial Challenge, and the Survival-Mode Challenge. Step I clearly defines the goal: Business Success! The remaining Four Steps help owners develop the skills necessary to achieve this success while overcoming these challenges.
Step II: The Customer Experience: Successful owners realize customers have many, many options to satisfy the same need or want their product or service satisfies. When owners drill down on customers and why they choose one business over all of the other options they realize that customers do not just buy their product or service. What their customers actually purchase –why they choose one business over all these options - is more than their product or service alone. This is why, the decision-tipping-point, is the EXPERIENCE of purchasing this product or service from their business. Successful owners know exactly who their customers are and what they want. Then, they construct a Customer Experience around these individuals.
Step III: Make a Profit: Successful owners understand that success requires their business to generate “Entrepreneurial Profit” – more CASH than it spends after paying its bills and the owner’s personal expenses. Generating an entrepreneurial profit requires working backward from the owner’s income needs to ensure that their customer, price, and volume combination will allow their business and livelihood to thrive, not merely survive.
Step IV: Manage Systems, Lead People: Systems are formalized habits that allow successful owners to achieve success. Systems are intentionally designed steps and procedures that efficiently, effectively and consistently achieve the desired result. In short – systems are the way a business gets things done. Successful owners know that systems do more than leverage their most valuable resource - TIME. Systems construct and deliver their product or service and create the customer experience. Systems generate profit and scalable growth. They even form the foundation of culture, brand, and marketplace identity. Most importantly, systems allow owners to become leaders of people (not herders of cats).
Step V: Own a Business (Not a JOB): Successful owners understand this fact - only a business can grow beyond them, a JOB cannot. If their product or service cannot be delivered or if things fall apart in their absence, they do not own a business. They own a JOB. To become successful, owners must be able to work on their business, not just in it. They must have time to think strategically about their business, to network and form key win-win relationships, to learn new skill sets and develop talented employees. These are just a few responsibilities of a successful business owner.
All courses and articles are for informational purposes only and do not constitute tax advice. Taxes are complicated - do not act on course information without consulting a professional. Always refer to treasury regulation before making any tax decision. Read the full disclaimer.
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