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.
If you've ever played a sport, you know the goal – to win! In competitive sports, your purpose is clear-cut and unambiguous. How one achieves victory, however, depends on the nature of the game. In baseball, one wins by getting on base and scoring runs. Football – get the ball across the goal line or kick it between the uprights. Soccer - get the ball in the net (literally, score a goal). Basketball? Net - same deal. And, while you're working hard to help your team win, you're fighting to keep the competition from doing the same. In sports, you know when you're winning, when you're losing, and the distance between the two. You also know who stands in the way of your success – the competition.
FYI - Business Isn't a Competitive Sport
But what about business? What is the goal in business? “To win,” is the standard, instinctive reply. But what does this mean – what's winning? Against whom are you playing? And, how do you keep score?
Sure, one can view business as a game. But to view it as a competition in which the goal is “to win” by defeating those selling similar products is a mistake. It's an all-too-common error made by small and large businesses alike. An error that takes the owner's eye off the most crucial member of their team – the very reason their business exists – their CUSTOMERS!
Another reason viewing business as a competitive game to be “won” is wrong is that, in games, there is only one “winner.” Does this mean that everyone not in first place loses? Not in business. In the business world, there is far more plenty than scarcity. Therefore, there are many ways to “win.” Those who see business as a sport where one team succeeds at others' expense misunderstand the game.
The True Nature of the Business Game
If you want to see business as a game, apply this perspective. In business, the winners are those who most-effectively utilize the Golden Rule. They understand their customers and know what they want. Then, they build their business around those customers. Winners treat their customers how the owner would like to be treated if they (the owner) were their customers!
Now, let's take this concept a step further. If your business goal is not to defeat competitors, what is it? Answer: Your goal is to complete a task - to build a successful business and – more importantly – to maintain its success.
Pursuing Success – Knowing the Goal
“Well, that's great,” you may be thinking. “What does it mean to be successful, and how do I know when I've achieved it?”
If these are your thoughts, excellent! You're asking the right questions. You can't reach a goal if you don't know what it is. The more clearly you define the result you seek, the better your chance of achieving it. Sadly, most owners lack a clear picture of the success they desire.
While creating the Five Steps to Building a Successful Business, I learned that struggling owners usually have little more than a vague idea of what they're pursuing. Their focus isn't on a long-term goal – it's addressing their most immediate crisis. If only they had more customers, better employees, more hours in the day, or, of course, more money, they would be successful. Unfortunately, these desires are excuses - symptoms of failure, not a path to success.
I found it equally surprising that owners meeting the success definition (which I will share in a moment) cannot tell you why they're successful. Most only know their bills get paid, and they have savings in the bank. They are not stress-spend at the end of each day, see their kids and spouse, and can take a two-week vacation without the business falling apart. Most successful owners figure out success as they go – through experience, trial, and error. They learn to focus efforts on what makes their customers happy (and money in the process) and minimize actions that don't. In the end, their efforts result in achieving the goal – building a successful business.
That's your goal - Business Success. Now, let's clearly define “winning” - what it means to own a SUCCESSFUL business.
Defining the Goal: Business Success
Owners of successful businesses create an enterprise that achieves all four parts of the following definition:
A successful business is:
So, that's the mission of your new career - transforming your product or service into a successful business. “Winning” means constructing an entity that meets this definition. Now, let's drill down on each success element.
An Organization: Do not be intimidated by this word. Organization has nothing to do with your business's size, its number of employees, annual revenue, or the number of locations it occupies. It simply means your business is organized – activities are structured and specifically designed to achieve the remaining parts of the success definition.
Makes Customers Happy: Successful Businesses add value to the lives of others. A customer has many choices when it comes to satisfying a need or a want. Repeatedly choosing one business over all these options is a fantastic compliment. It means you are, in some measurable way, increasing the life -quality of your customers. Referring your business to a friend or colleague is a more significant accolade. In doing so, the customer tells the world they trust your business enough to risk their reputation.
Successful businesses know exactly who their customers are and design a consistent, positive experience for these individuals. The primary purpose of this experience is to create a relationship that generates trust.
Gets New Customers: A successful business is not in a constant battle to find and replace lost customers. The experience it creates generates referrals from happy patrons. Your business can grow if you desire. Most important - it can absorb new customers without sacrificing the customer experience.
Making customers happy and getting new customers is Step Two of the Five Steps to Building a Successful Business.
Generates Profit: Profit is vital to business success. Unfortunately, it is also misunderstood, especially by small business owners. There are many ways to measure profit – but only one that matters for success. A successful business must generate enough revenue to pay all of its bills. But, this is just the start. It must also produce the money needed to pay the owner's household expenses. If it doesn't, the owner will experience financial stress and sacrifice.
Now you know the goal – what it means to win at the business game: Building an organization that makes customers happy and gets new customers while creating profit. Helping you achieve this success is why we created the Five Steps to Building a Successful Business. You need to check it out!
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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I haven’t practiced in the accounting field in quite some time and wanted a refresher. The Overnight Account course 1099-Misc Basics was very helpful! It was simple to follow along and understand each section. I would highly recommend this course! Staff were quick to answer my question as well. I love that I can review the modules again, if needed, at any time. I will definitely be using them again for more classes.- Tammy, Anchorage, AK, 1099-MISC Basics Course