Four Key Elements to a Successful Business
I have now been in business for almost 40 years and I can divide those 40 years almost exactly into two.
The first 20 years (the Dark Ages) where I was working as a chartered accountant, firstly with Princewaterhouse Coopers, where I spent all my time watching and auditing other people’s businesses. I must have reviewed a couple of hundred businesses in that time. In retrospect I think I learned very little.
The second half of those 40 years (the Age of Enlightenment!) have been spent owning and managing my own businesses. I now have six trading businesses all in the financial services sector.
Looking back over the entire 40 years. I have identified four key areas to any business, irrespective of its market sector or size.
Firstly, is the sale!
Now this might seem blindingly obvious, but in the early days many people get this wrong. They insist on trying to sell the thing that they have created, or manufactured and probably love. Rather than the thing that the customer actually wants. It can be heart breaking to realise that customers do not necessarily like or love the same things as you do. Very rarely will any customer feel the passion for your product in the same way. Market research here is fundamental. It need not be sophisticated, but just the ability to sell the product to an unconnected independent person is the first step.
Secondly is the actual process of creating, storing and dispatching the product to its ultimate venue. This tends to be the easy bit for most people.
Thirdly, is the reporting of everything that you do and this can be everything from the VAT and returns to HMRC, to formal management accounts and the production of KPIs. Although this may sound quite onerous. My belief is that the main purpose of any reporting has to provide the necessary management information to the business leader. This enables them to better drive the business rather than to produce copious returns for the government department. Any production of government required paperwork has to be purely a by-product of the business.
Fourthly, and perhaps the most important part of any business, is its leadership. This is the most efficiently and effectively done if the leader has quality management information from his or her reporting function. Quality data enables a business leader to make all the crucial decisions with confidence.
It’s also important to recognise that we can’t be good at everything. Once we do this we can work on our weaker areas and improve them. Organisations like our Chamber of Commerce can be extremely useful I providing support, training and development. Don’t just be a member – get involved.