How do you know when business is being done well? It’s more than just profit — some businesses are up and running for years, making decent profits, but fail at efficiency and sustainability.
I believe business is done well when “each piece of the system reinforces the other parts of the system to form an integrated whole that is much more powerful than the sum of the parts.” 1 To do that, each piece of the system must be individually tended to, with a mindfulness of how it relates to the entirety. In my experience running a business and now managing an Incubator, I have found certain constants among the variables of day-to-day business operations:
1. Have a Plan
In the day to day hustle of running a company, sometimes it seems like nothing on the actual to do list is going to (ever) get done and the most dependable plan is to keep trying to put out the fires that pop up. To do business well, small business owners have to be intentional about working on the business, not just in it. If you keep your head underwater, you’ll be short-sighted and exhausted. If you pick your head up and look out to where you want to be, it reminds you that the journey is possible (and that you might be closer to reaching your goals than you thought).
Also, your business plan doesn't have to be 30+ pages!
Consider: Where do you want to be in 3–5 years? What does success look like for your business? What role do you want your company to play in your industry? What’s your exit plan?
2. Empower Leadership
Leading a company is no easy feat. Taking care of those that directly take care of the business is crucial to long term success and fresh thinking. As an owner, founder, or executive director, remember to consider your own need to recharge, both personally and professionally.
Consider: Are you paying yourself and able to cover your living expenses? Are you in the practice of making decisions and trusting yourself? Are you networked into an external community of business people who you can share ups and downs with and seek qualified advice from? When do you feel in control of the business? When do you feel out of control? What does your work-life balance look like? If you took a week off, what would happen in your business?
3. Perfect your Business Service or Product
This is the meat of it. You can have an awesome idea or a great networking rolodex, but your work must speak for itself.
Consider: What are three things you’re doing really well with your service or product? What are three things you can improve upon? Are you completing your primary objectives with excellence? How do you know? Have your communicated to your stakeholders what it looks like when you’re operating at your best?
4. Know your Finances
Money management can be intimidating and many feel like talking about money is taboo. If you’re scared of the money, you won’t know how to walk in surplus and abundance. Spend time learning the financial ins and outs of the business: know the costs of materials, services, and projects, make legitimate budgets and projections by setting them and then checking them at the end of the term, collect your accounts receivables, and don’t be afraid to ask for the sale.
Consider: Do you know what each financial report is telling you about your company finances? What safeguards do you have in place to protect sensitive financial information? How is your personal credit? Do you have financial professionals on your internal or external team that know your financial goals and are identifying opportunities and a strategy achieve those goals? As an owner, what is your retirement plan? Can you offer your customers an incentive to pay quickly?
5. Comply with your Legal Obligations
The law is intertwined into a plethora of business decisions. Understanding where laws apply to your business can help you make confident decisions, save you money and serve as a competitive advantage.
Consider: Who would you call if the business was sued today? Do you have legal professionals on your internal or external team that know and understand how your business operates? Have you had your transactional paperwork reviewed in the last year by an attorney to ensure your business is protected? Is it in writing?
6. Develop Human Resources
There is almost nothing better than having team members who take personal responsibility and have a sense of ownership in their work. A business that is operating well has spent the necessary time developing and nurturing a corporate culture where people are respected, where their voice can be heard, and where they can easily relate their tasks to the mission and objectives of the company.
Consider: Does your business attract long-term employees? Why or why not? How can your employment package be more attractive? Do you have an employee handbook? What is your hiring/firing process? How do you train new employees? How do you deal with employee discipline or disgruntled employees? Do you have a consistent and empowering feedback process? Are the right people in the right positions?
7. Fine-tune your Processes and Procedures
Work smarter, not harder! There may be 25 ways to deliver your services or product to your customer. Having a consistent method is a powerful way to communicate reliability to your customer, partners, and workforce.
Consider: Have you done an efficiency analysis? Do you know where you can save money in your business? What are the small tasks that seem to take the most time out of your day? How can you incorporate technology to automate processes? Is your estimate process or pricing model directly in line with how your business operates? How do you account for inventory and ordering?
8. Educate through Marketing and Sales
I encourage my clients to engage in a potential sales relationship with the mindset that they are helping the client make an educated decision on an item/service that the client both wants and needs. Whether in a sales situation or through marketing materials, guiding customers through options using a clear and concise educational format shows company expertise and helps clients feel more confident in their buying decision.
Consider: How can you use your products and services to contribute to a more educated consumer market? What are common misconceptions about your service or industry that you can clarify? If you develop estimates or analyses on-site for clients, what materials can you have them review while you crunch the numbers? (consider testimonials, pictures of previous jobs, a “meet the team” brochure, etc.)
9. Listen to your Free Research Team: Your Stakeholders.
While criticism is not always easy to take, businesses should be designed through industry research, and crafted by feedback. Developing a habit of listening and filtering the feedback that suggests ways to improve services, processes and business infrastructure.
Consider: Do you have a system in place for obtaining and responding to feedback from your employees, clients, vendors, mentors, etc.? What do you do with business advice you are given? How do you communicate when you have incorporated stakeholder feedback to strengthen an area of the business?
10. Consume Business Education Often
Businesses operating well have a leadership team in place that realizes that there is always room for growth and improvement. Continuing education keeps a business competitive and prevents leadership from being encapsulated in their business bubble.
Consider: What tools or resources are needed to move the business from where you are to where you want it to be? Are there local, regional, or national professional organizations that can help bridge that gap through capacity building or relationships? Is there a business process or procedure that’s not working well?
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What factors do you use to determine whether or not your business infrastructure is operating efficiently?
Adrienne Haynes is the owner of SEED Collective, a business consultancy, and the manager of an incubator for construction contractors. Her passions include the law, business coaching, and community building. Find her on twitter @Law4Innovators.
