The answer can be found in a paper released by Moya K. Mason earlier this year titled, What Causes Small Businesses to Prosper? In it, she writes,
“What does matter, it turns out, is having a strong grasp of business basics. Without exception, companies that outperformed their industry peers excelled at what we call the four primary management practices – strategy, execution, culture and structure.”
My own observation of small business owners who prosper agrees with her findings. But communicating to them that they need to increase their strategy, execution, culture and structure usually is met with blank stares or comments like, “No kidding, but how do I start?”
Because of that, I have developed detailed action steps for improving in these four areas. The following are the key areas that every business owner must work on in order to obtain massive profits:
- They must acquire a strong, working knowledge of business basics.
- They must have a strategic profit plan.
- They must build their strategic profit plan around a clear value proposition for the customer.
- They must be committed to marketing and selling their product continuously.
- They must make all decisions and analyze all results based on actual data. Gut reactions are fine for small decisions and when you are a startup company. But the best companies rely on accurate data to make decisions.
- They must concentrate their sales efforts on a particular niche (or niches) rather than trying to be all things to all people.
- They must develop a way to make their product something their customer “must have” rather than something that would be “nice to have”.
- They must continuously turn out innovative products and services rather than reacting to events.
- They must deliver products and services that consistently meet and exceed customers’ expectations.
- They must hold themselves and their people to the expectation of a high level of performance.
- They must empower their employees and managers to make independent decisions and to find ways to improve operations.
- They must make it easy for their employees and customers to work with their organizations.
- They must recruit “superstar” employees. They must hold on to their most talented employees. And they must actively work to develop more “superstars”.
- They must use a mentor or a coach. Being the boss is a lonely job. Don’t try to go it alone.
- They must practice the “Golden Rule” in all of their business and personal dealings.
- They must develop a good accounting system that provides them with strong management reports.
- They must become lifetime learners in their business. It is a serious red flag when I, as their CPA, know more about trends in their industry than they do.
At this point most business owners start to get overwhelmed. They see so many things that they need to work on that they just freeze up and do nothing. What they don’t understand is that successful business owners didn’t get that way in one big flash of inspiration.
They actually made small, consistent improvements to their business every week. This requires them to set aside some time every week to work on improving their business. They refuse to let the day-to-day fires of running their business stop them from working to improve their business in some small way every single week. They understand:
GOOD IDEAS + ACTION = MASSIVE PROFITS
So where should you start?
Simply decide to work on the one thing that, if improved, would have the most impact on your business. My experience is that most business owners know exactly what that “one thing” is. If you are not sure, ask your banker, your employees, your spouse, your CPA, or your coach.
Imagine how different your business would be if you invested four hours every week in improving your business! This would be over 200 hours by the end of the year. How many of your competitors do you think actually will make this kind of commitment to excellence?
What to do once you decide what to improve?
Educate yourself! You can do this by researching online, reading business books and magazines, following business blogs, reading articles, purchasing coaching programs, and hiring a personal business coach. Consider calling a business owner in your industry just to trade ideas. If you are worried about sharing with the competition, reach out to a business owner in a different city or region.
Take some action every month! Too many business owners get stuck in the research phase and never get anything done. The trick isn’t to become an expert on the subject. As the Nike commercial famously says—JUST DO IT! Get started! Take some action! Even if it is only a very small improvement in the first month, it is better than no improvement at all. Remember: Excellence is achieved one small improvement at a time.