Tuesday, April 7, 2009

The Secrets of #Business Success

For years I have read many books on how to run and build a successful business. Some books say write a business plan, others talk about elaborate systems of control, even others speak of marketing.  All of these are good but they do not speak to the core issues. 

There is a saying the more things change the more they stay the same. Fact is what is takes to run and grow a business has not ever changed. Before discussing how to create a successful business let me explain simple why businesses fail.  I will start with a simple truth – a business runs at an imbalance – that is it spends less money than it generates in revenue. An unsuccessful business spends more than it makes in revenue (to grow) or spends exactly what it makes. It really is that simple and that is why a business fails. 

Some will tell you either grow or die and that to some extent is true however it is not the growth that is important rather it is the type of growth – is it natural and sustainable and balanced based on true business needs (like the cycle of nature) or is it forced, cabalistic an hostile in nature like (like a predator in an ecosystem with a limited source of food). The first can be maintained it is controlled the latter if left unchecked (i.e. driven by greed) will lead to the demise of an already fragile ecosystem and the eventual death of the business and all associated with it. 

The underlying principles that determine the sustainability and success of your business have not changed since the beginning of time. 

Without these three (3) basic ingredients a business will fail 

  • Respect – seeing and understanding the value, contribution and importance of all things (people, facilities, equipment, contractors, suppliers, employees, clients, customers, etc) involved in the enterprise and maintaining or working to enhance or at a minimum maintain them.
  • Honesty – understanding your core values and strengths and providing a full disclosure to all involved so that they can made an educated determination as to your value and ability as well as remove any doubt regarding your being able to execute the terms of the agreement and knowing that if you cannot you will tell them
  • Trust – the obvious result of doing the first two.    

When these characteristics are in place people can them rely on you to and trust you with their wellbeing because fact is in business you are hired to solve a problem and you do not do business with people you do not trust long term. 

Sure a book will give you all of this great theory

  • Microeconomics
  • Macroeconomics
  • Business Ethics
  • Organizational Behavior
  • Financial Accounting
  • Managerial
  • Accounting
  • Sales and Marketing
  • Human Resources
  • Cash Accounting
  • Accrual Accounting
  • Leveraging
  • Business Ethnics
  • Supply and Demand
  • Strategic Planning
  • Business and Contract Law
  • Information Mapping
  • Manufacturing and Production
  • Operations Management
  • Statistics
  • Technology and Information Systems 

And a host of other theories but as is always the case in the reality and truth of what is required is simple we as people make it complicated.

  • Add value
  • Do your best
  • Solve Problems
  • Keep your word
  • Service before Self
  • Spend less than you Earn 

If I have left anything off feel free to add

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