We are in the grips of a serious recession. Even the staunchest optimist would attest to that fact. Even so, we would bet you know a few business owners who achieve consistent bottom-line improvement, regardless of the market.
ActionCOACH clients, CEOs for a variety of businesses that we personally coached over the last 24 months have had amazing success. Despite one of the worst economic climates in the United States, they have grown their key performance indicators by as much as 640%.
Through interviews and analysis of the common traits that led to this success, we have been able to identify 12 common principles for business success in any economic environment. This article is designed to provide a brief overview of these 12 principles.
12 Common Business Principles…
Principle 1: Having a Positive Mindset
• We can’t keep a terrific attitude every second of the day, every day. We all have upsetting or distracting events occur throughout our day. The trick lies in how quickly we choose to catch ourselves and turn our attitudes around.
Principle 2: Effective Planning
• You can be assured that all great business people have consistently done a good job of planning out at least one year in detail and five as a skeleton. In addition to having a solid one-year plan in place, they take the next logical step of breaking that plan down into four manageable chunks of 90-day-plans.
Principle 3: Gain Financial Mastery
• Simply understanding your financial reports (which reflect your past performance) is not sufficient for making critical decisions in your business. All successful owners have also developed and regularly adjusted their financial forecasts based on volume and the margins they need to achieve their financial goals. Business is a financial game… if you don’t know the score, you can’t possibly know the winners from the losers.
Principle 4: Learn to Manage Cash Flow
• A company can seem profitable on paper, yet still suffer from low cash flow. When looking at your numbers, keep a few things in mind: It is simply smart practice to keep your inventory clean and lean, as low as it can be without sacrificing effective delivery to your customers. Take a close look at your payment terms for suppliers. Are your overtime dollars necessary, or at least under control? Are you taking advantage of flexible work schedules to possibly reduce some fixed costs for salaries?
Principle 5: Manage Marketing for Results
• When you are ready to pursue new business, make sure you have a great system in place to track every lead that comes into your company. Your marketing budget could be reduced, or at least better focused, when you have the data to know which marketing strategies are successfully feeding new business your way.
Principle 6: Make Sales Results Simple
• The bottom line here is simple: train, train, train. Make sure you have the most talented sales team and that your staff has performance goals and accurate information about the current performance of your business. Your sales team must also be results oriented. It is imperative that every sales person is a strong contributor, or it may be time to start recruiting. After all, there is a lot of great talent looking for work these days.
Principle 7: Execute on the Fundamentals
• Most entrepreneurs do not take the time, or know what key fundamentals are missing in their business. For the first six to eight months after one-on-one coaching, we focus entirely on the blocking and tackling of building the right customized foundation for success. The larger the business, the larger the foundation that is required.
Principle 8: Be Committed to Continuous Learning
• With so many professionals in the U.S. required by regulation to continuously upgrade their level of professional education, shouldn’t you do so as well? Now is also a great time to expand the cross-training of your staff. The top line of your personal knowledge is also the top line of your company’s knowledge.
Principle 9: Seek Accountability
• Are you, as the CEO, ready to be held accountable? Most entrepreneurs love the freedom of not having a boss, but many lack the self discipline to stay focused without someone higher up to report to. A plan designed to drive financial performance is a necessary tool to make your business thrive and grow.
Principle 10: Find Clear Focus
• Many business owners lack the future vision to realize their dreams. You see, without a compelling why, it is so easy to just go through life on autopilot. Our habits and routines can be very detrimental to establishing the patterns required for success.
Principle 11: Develop Great Systems
• Many organizations have learned to leverage the price of talent when they understand that you do not have to pay as much if you have the proper systems in place. Miscommunicate the systems for success, or hire less than super stars, and you had better have the proper systems in place. Better systems require less skilled talent.
Principle 12: Recruit a Professional Advisor Team
• Just imagine the excitement and satisfaction of building a business that runs without you! This final step is critical. Make sure you have surrounded yourself with talented advisors: a good CPA, a wonderful attorney and a financial advisor that meets with you at least quarterly to audit your investments. Last but not least, consider the value of a business coach to help expedite your journey toward financial and personal freedom.
Your path to success can be as easy as counting to 12. For the next 30 days, before making any major business decisions, mentally journey through these principles and see how your current plan and planning process measures up. After the month is over, you could have the principles memorized and a set of habits established that will lead to a lifetime of better business! Just remember, most business owners have a conflict between what they want and what they are willing to do. What is your Why? Are you willing to do whatever it takes to achieve your dreams in business and in life? Are you coachable? If so, get into gear!
Get into Action!