Viewpoint by James D. Roumeliotis
Forget the cynicism. Businesses exist solely to make money while serving a need. Profitability is everything and cash is king. In public companies, shareholder return is considered essential. Operating from this mindset determines and measures whether the business in question is a success. If an entrepreneur is to increase the chances of triumph from the outset, he/she should consider seven key principles. These keys have been forged in the fire of my personal experience based on long-term practice and common sense seasoned with a touch of academia.
1) A VIABLE PRODUCT OR SERVICE WITH THE RIGHT BUSINESS MODEL AND A PASSIONATE PERSON BEHIND IT
It should fulfill a need, offer a benefit, be innovative and differentiate itself. It’s also imperative that the entrepreneur is passionate about the product/service, empowers his/her staff, as well as practices/conveys business ethics. To excel in the business, the entrepreneur must have the right mindset and attitude. This includes drive, perseverance, tenacity, and an undying belief in himself/herself and the value he/she adds. Must also be willing to embrace the concept that he/she takes complete ownership for his/her results. He/She can’t blame the marketplace, the economy or the employees for failure. In the end, it’s the entrepreneur making the decisions.
Critical and can vary depending on the size of the undertaking. Start your capital search with a good business plan that shows investors and lenders your company’s potential. Furthermore, Take advantage of any government loan program created for start-ups.
Expect to realistically invest about 30% of your own money based on the total value of the project. Last but not least, cash-flow is the lifeblood of your business if you’re going to sustain the operation financially.
3) MARKETING & SALES
Advertise, publicize, be first, different, daring and memorable. Deliver on those promises and constantly remain customer focused.
Sales, on the other hand, is part of the marketing function. It includes business development and account management. Sales is crucial to business because it is the bottom line, whereas marketing is about getting a product known. However, at the end of the day, it’s about the need for a constant stream of new business which brings in the necessary cash flow.
Don’t simply HIRE well educated and experienced people but most importantly MOTIVATED, dedicated, coachable and with interpersonal skills. Moreover, make certain that the people you hire fit-in with your corporate culture. Your organization should also foster an atmosphere of Innovation and creativity through leadership. Work for staff should be meaningful rather than a chore. These conditions can’t help but breed success. Implement an orientation workshop for new recruits and an occasional training program – invest in your key employees.
5) SYSTEMS – STRUCTURE
Consider publishing an “Operations Manual” and continuously enforce its procedures. Without any structure, the chances of failure increases. Everyone should be on the same page and embrace best practices for quality results with consistency.
6) STRICT INTERNAL FINANCIAL CONTROLS & CASH FLOW
Watch them closely, borrow wisely and don’t overspend. It doesn’t matter how much you have coming in if most of it is going out. Watch your financial ratios and yields (where applicable). The success of your business is, in many ways, measured by the bottom line. Even if you hired a full-time accountant, you would still need to have a fundamental knowledge of accounting, how it works, and how to apply its basic principles in order to run a flourishing business.
7) CONTINUOUS IMPROVEMENT, INNOVATION AND SUSTAINED GROWTH
This is by no means a one-time event but rather an on-going process.
Innovation encompasses offering distinguished and improved solutions which meet or exceed market requirements and expectations from your customers ‒ whether offering a desirable product or upgrading a service experience.