What we think are business essentials typically aren’t as essential as we are led to believe.
Capital is necessary to operate, but how many businesses go under each year because leadership needlessly burns through it?
A product is only as good as the marketing team behind it.
Projects don’t complete on time and on budget without good project teams behind them.
Of course, the tie that binds these examples together is people…and people need leadership.
I’ve made stupid decisions based on pride that have cost thousands of dollars.
I’ve seen organization units crumble due to poor leadership.
I’ve seen businesses come to the brink of closure because business owners/leaders were unwilling to admit they were wrong.
These twelve business essentials will help you avoid the challenges, heartache, and pain that I describe above.
1. Budget wisely
My first foray into a bona fide business was a financial disaster because I did not stick to the financial plan that I created to get a business loan. I let my pride get in the way for several business decisions like; building renovations, technology malfunctions, and equipment purchases.
I could be writing a completely different story for you if it wasn’t for pride interfering.
In my early 20s, I thought I needed to look professional, rather than focus on being professional.
One of the first things we learn in budget management is to set aside a contingency fund to better manage risk in your project. When you develop a budget for a new business, business growth, or annual operations, always set aside up to 20% for contingency.
You can create a contingency fund as a separate T-account or increase relevant T-accounts (wages, maintenance and repairs, capital expenses, dues and fees, etc.) by 20% each.
Once you develop and approve your budget…STICK TO IT…no matter how much you want to spend outside of it!
2. Be willing to be wrong
Coaching taught me that I don’t always have to have all the answers and that it’s okay to be wrong sometimes.
Good leaders will allow their employees to take risks and make some decisions, so that they can learn from them and be better.
As a leader, I’ve made mistakes and had to apologize for them later. Sure, it may have been a little embarrassing, but I wasn’t crushed – I lived to see another day!
Everybody is afraid at some point.
Fear is a powerful motivator for not taking action. Does this sound like you?
- “It’s not the right time”
- “It’s not the right circumstances”
- “We’re not ready.”
Sometimes, you just need to take the leap and see where you land.
Ask for advice. Research. Pray.
Wait as long as you can.
Then make a decision…and hang on!
3. Be a servant to others
Pride will kill a business or relationship.
The third item in my list of business essentials hits close to home for me because I made two decisions based completely on pride in my photo-printing business that cost us thousands.
If you struggle with ego or pride, find a way around it before you lose everything.
Being humble, seeking guidance, asking for input from trusted individuals before making a decisions is good leadership.
Treat others with respect, even if you think they do not deserve it.
Learn what makes an individual tick and meet them there consistently.
You don’t need to be a doormat, but as much as it depends on you, try to be at peace with your partners, employees, customers, and board of directors.
4. Be accountable and hold your team accountable
Lack of accountability in an organization will at the very least cause it to go stale, if not shut it down completely.
I’ve seen the fourth item in the business essentials in both public and private sectors and it kills passion and motivation at lightning speed.
I’ve seen organizations where some leaders / employees are held accountable while others, the favorites, are not.
I’ve participated in meetings where decisions, or partial decisions, are made and leaders don’t follow up with the individuals who agreed to take action.
Hold yourself and your team equally accountable across the board, and you will see your success sky-rocket.
5. Ask for help
You don’t know everything.
You aren’t good at everything.
…and if you disagree with the first two, then consider this: You don’t have time to do everything!
Free help comes in the forms of family, friends, volunteers. If they aren’t specialized, delegate what you can to free up your time so you can work on the parts of the business you need to.
Paid help can mean: full-time employees, part-time employees, consultants, partners, or any number of solutions. Consider what you need, how you will get them trained, what they will be responsible for, and how they will be supported (depend on you for 100% support, or training documentation / videos, etc).
Then get the word out.
Talk to people, advertise, post on social media…communication options are near limitless.
Don’t let pride or fear hold you back.
There are always workable solutions, you just need to think it through.
6. Learn the benefits of applying best practices
I was listening to Brian Tracy one day while working in my yard. He shared that he talked with Kop Kopmeyer, who wrote the book 1000 Success Principles. He told Tracy that the top principle was “learn from others who came before you – don’t try to reinvent the wheel.”
There are few trades or practices out there that don’t have documented best practices…even parenting now has a set of competencies based on over 30 years of studies!
I’ve seen organizations attempt to solve problems that have been solved for years. Entire websites that were dedicated to the problem being worked on, which was completely ignored.
When government considers making a major investment, one of the first things decision-makers ask for is a business case that includes a “jurisdictional review”. In other words, how are other jurisdictions handling this problem and what can we learn from their experience?
7. Knowing when to not follow best practice
The next business essential suggests the opposite of what I recommend in the previous, in that we should, in some cases, be willing to forge our own path.
Yes, we learn from others and benefit from their experience, but sometimes “best practice” doesn’t fit our circumstances, team, or culture. After a jurisdictional review and an attempt to implement the solutions we find, as leaders we should know when to call a truce and make allowances or tweaks that better fit our own organization.
For instance, there are two major project management frameworks: waterfall and agile. I’ve worked in an organization that practices both, and it was my job to combine the two frameworks to create an implementation methodology that suited the organization.
8. Narrow your focus
We have a tendency, as business owners, to be a one-stop-shop for our clients. Whatever our clients want, we can do. That can be a healthy strategy in the short-term, especially early on as we grow our business. However, as the business matures we need to start making tough decisions about who we want to serve and how.
For instance, my wife operates a market gardening business that follows organic principles. She had a couple of choices to make: 1) who did she want to focus on for clientele and, 2) what did she want to grow?
My wife has always been about quality, rather than quantity (I mean, she chose me, right?), so after a few years experience she chose her sales outlets: local market, a box program, and a handful of restaurants because they fit her personal needs/desires.
In terms of growing, she wanted to maximize the choices her clients have, without overwhelming herself in terms of effort, so she chose a modest number of crops that have allowed her to stretch out the effort over the growing season, but still gave her clients high-quality healthy vegetables throughout the growing season.
Your organization may be stretched too thin in terms of service offerings, goods, or clients.
Maybe you can’t keep up with demand, or post-purchase support. You may need to narrow your focus to better serve your clientele.
9. Choose a direction
This next business essential is directly tied to narrowing your focus.
As a corporate leader or business owner, it is your responsibility to pick your company’s direction.
You provide the vision and mission.
You lead your employees and clients toward that vision.
So many organizations fall into a routine. They’ve been running for a few years and have established a following, but they’ve plateaued.
Maybe your following needs a new reason to get up in the morning besides collecting a pay check; they may need more excitement, a new challenge, and a purpose for existing.
You CAN provide that direction and challenge; give your organization purpose again.
10. Clearly communicate
Communication is the business essential most central to the success of your organization.
We need to communicate clearly with staff, partners, clients, the public, governments, shareholders…the list goes on.
We hear the term communication and assume the sharing of our own messages with an audience. Rarely do we assume communication means to also listen to our audience’s message, but the requirement exists nonetheless.
As important as it is to form our outgoing messages appropriate to the audience, we must also be willing and read to absorb the message(s) from our audiences.
Outgoing communication is difficult to manage. Hundreds or thousands of marketing firms and consultants make good money helping their clients manage communication to external stakeholders. There are just as many change management firms and consultants helping organizations manage internal stakeholder communications.
The key to managing communications is to understand your audience and meet them where they are at, which involves getting to know your audience intimately…by listening.
11. Break from tradition
“That’s not how we do things here.”
How many times have you heard that phrase in your career? Probably a lot.
Another one of the business essentials that ensures a successful organization is the ability to break from tradition and challenge existing patterns of thought or approach.
The world is constantly changing, and organizations need to be willing and able to change with it.
There is nothing wrong with having a few traditions embedded in the culture that help define you as an organization; specific ways to celebrate wins or recognize excellent performance, as examples.
However, if those traditions prevent you from adjusting to new client needs, or meeting shareholder requirements, or leading you to higher-than-normal employee turnover you might need to review those traditions and change them.
12. Create a culture of success
The final item in my list of business essentials relates to the previous one, in that, as you build your organization find ways to create and maintain a culture of success – whatever that means for you.
One of my favorite Simon Sinek videos relates to the purposes behind an organization. Simon shares that the purpose of a business is not to make money – it’s to advance a cause or provide some solution for society.
Obviously, an organization requires money to operate, but if we make earning money the purpose for an organization, a company culture will suffer, unless the majority of employees are motivated mostly by making money.
As leader, you have the power and the obligation to create a culture for your organization that balances money-making with providing a service to your clients or customers.
So first, you must define success and then create a culture of success around that definition by implementing reward systems, communications, internal marketing campaigns, hiring people with a similar mindset, and taking other similar actions to build up the culture and keep it in the front of stakeholders’ minds.