Your business needs walls and a roof too
Full disclosure – this article is content from my book BEYOND the NUMBERS – 5 Key Factors that Impact an Entrepreneur’s Success.
For those who have read my book, consider this a refresher. If you haven’t read it, well, why not? Just kidding. Maybe you’ll check it out or at least grab an idea or two from this article.
The Foundation
Business owners and aspiring entrepreneurs must have a solid understanding of “the numbers.” They need to make revenue and expense projections and determine how long it will take to turn a profit. Whether starting or growing a business, there’s capital needed for office space, equipment, inventory, and labor. Active owners prepare budgets and continually monitor financial statements and cash flow. In addition to financials, entrepreneurs research and understand other (number) elements involved in running a business, like market demographics and sales strategies.
The Walls and Roof
While these numbers and elements are essential functions for any business owner, the 5 Factors have little to do directly with the numbers, but can have just as great an impact on the success (or failure) of that business. The 5 Factors go BEYOND the NUMBERS.
To borrow a metaphor from the sports world, business processes (the numbers) are analogous to speed, size, experience, and natural ability. This article and book are about the will to win, team chemistry, and work ethic. In other words, the intangibles that, in the sports world, are often the difference in winning or losing. I believe the intangibles can provide the winning edge in business as well.
Yes, the book is aimed at what we generally think of as those folks who started or purchased a business and are in the throws of growing that business. However, all businesses, private or public, are impacted by these 5 Factors. Companies whose owners or leaders emphasize the intangibles rise to the top of reputation, admiration, and financial success. Not just small business entrepreneurs, but companies like Walt Disney, Apple, Starbucks, and Southwest Airlines (Note: read Simon Sinek’s book: “The Infinite Game” for more examples).
As I wrote in the book, the 5 Factors are not a substitute for a solid business plan, adequate finances, or well-developed marketing strategies (your foundation). As the title of this article says, a business also needs “walls and a roof” – the intangibles.
The 5 Factors are: Personality, Responsibility, Goals, Values, and Attitudes.
- Know your entrepreneurial PERSONALITY. What are you good at and not so good at? How do you resolve disputes? Do you need partners or family members to collaborate with and share the ownership responsibilities? Would you be better as a sole proprietor? It’s not only about knowing your strengths and weaknesses, it’s about who you are, your values, attitudes, and how you do things. Here’s a “test” you can apply to explore your entrepreneurial personality.
- Fully understand the level of RESPONSIBILITY involved. Being an entrepreneur isn’t for those seeking balance in their lives. If you think being your own boss means more freedom, the ability to hit the golf course any time you feel the urge, having total control… well, sure…in your dreams. In reality, probably not. Yes, you’ll have a degree of control, but freedom is relative to your personal definition. Just know that seeking control and freedom are the wrong reasons to become an owner. It’s more important to consider how good you are at managing time and handling work-life “balance.”
- Develop a process for setting and monitoring GOALS. We are all goal-seeking creatures, if only with informal to-do lists. All businesses have goals, but how many actually use those goals to move their business forward? Can you define, track, revise, and reset as needed? Setting and monitoring goals isn’t the daunting, life or death task many people make it out to be. Here’s a simple form and some additional tools to create your own process.
- Establish steadfast VALUES in your business. Defining what you stand for, your core value, and then weaving that value into every fabric of your business may be the most important thing you do. In Simon Sinek’s book, Start With Why, he says, “People don’t buy what you do; they buy why you do it.”
- Get and keep the right ATTITUDES. Henry Ford coined the phrase “If you think you can or can’t, you’re right!” Attitudes are contagious. They spread, influence outcomes, and provide motivation to conquer big bad demons – or can just as easily take down the toughest competitor. It’s up to you to establish and maintain the right attitude
Here’s a way to bullet-point the 5 Factors. It will help you remember them and include them in your business plan (if you haven’t already):
- Know your entrepreneurial personality: partner or sole proprietor
- Monitor work-life balance (embrace the level of responsibility)
- Use a simple goal-setting and review process
- Build your business on a core value – your “why”
- Maintain a positive attitude and culture
If you want to grow your business, you’ll have to, at some point, work on the business (not just in the business). You’ll set the course, decide on partners (or not), develop and monitor key goals, and make tough work-life balance choices. You’ll establish what the business stands for and make sure your team maintains those values and the proper attitude. These are integral tasks of every leader and business owner. How much attention and effort you give them is up to you. Choose wisely how you engage these factors. I sincerely believe they can make a difference, both in your life and in the success of your business.