10 Things I Have Learned In My 40 Year Business Career
Great results come from knowing what to do and taking effective action. To shorten your learning curve, here are 10 things I have learned in business.
Someone I know challenged me to write down 7 things I have learned in my business career. With 61 years on the planet, almost 40 years in the work/business world, and a MBA education, I must have learned something…right? So, I came up with 10 things. Not in any particular order, here are 10 things I’ve learned in business.
1) The numbers your business generates are important, tell the story of what is happening in your business and must be viewed in the context of other numbers to enhance meaning. Understanding the story the numbers are telling allows you to ask informed and specific questions. Usually, some version of “why is this happening?” Once the question is asked, you can search for the answer and formulate an appropriate action plan to address the situation…good or bad. If your revenue is down 25% for a specific product line, you can ask “why” and develop a plan. The same is true if your revenue for that product line is up 25%. The key is to identify the 5 or 6 numbers that most impact your business situation, set goals for those numbers and measure them systematically. Analyze these numbers in the context of other numbers to identify trends and outliers. Identify what is happening in your business, make plans based on what you have found, execute and measure progress. Do you know the important numbers in your business?
2) Every business needs a written business plan that is updated regularly; at least once per year – quarterly is better. In some cases, as when you’re asking for a loan or looking for an investor, this plan will need to be quite lengthy and detailed. However, even if you’re not looking for money and the only person who will see the plan is you, you still need a written plan. There are 2 important reasons for doing a written business plan. The first is that doing one forces you to think about the situation you’re in now, where you want to take the business and formulate plans to get there. Creating a business plan allows you to set goals, create strategies to achieve those goals and define activities to support the strategies. The second reason is to keep you on track. That means regularly reviewing and updating the plan. A lot happens in a year and it’s easy to get disconnected from your goals and vision. As someone once said, “when you’re up to your ass in alligators, it’s hard to remember that your original objective was to drain the swamp.” A business plan revisited regularly will remind you to drain the swamp. That is to say, to stay on plan. Do you have a written business plan to create the path and keep you on it?
3) Accountable teams that perform well are the result of 2 systems that drive performance. The first is that every activity in the business has an “owner,” that is, someone responsible and accountable for the activity, and every team member has an owner. That way there is responsibility assigned to tasks and team leaders. The second system is consistently setting clear expectations for each team member, supplying good training to allow team members to do their jobs successfully, consistently measuring performance against expectations, and consistently reviewing team members’ performance with them to provide feedback and encouragement. This must be a system that is defined and calendared. If you consistently execute these 2 systems, your “A” players will be happier and better utilized, average skilled team members will still be successful, and your business will operate better. Do you have systems in place that promote accountable teams that perform well?
4) Finding time to do important things is a matter of making 2 choices. The first choice is to define your highest value activities, only do those high value activities, and eliminate, delegate and outsource everything else. This can be difficult as some of the lower value activities you are currently doing will be hard to let go of, but if you want to do the important things, letting go of lower value activities will need to happen. The second choice is prioritizing everything that is left, from most important to least important. For most business owners, building the business, building the team and the doing the most highly complex client work are the only things that should make it to the “To Do” list. If anything else is on that list, you really should ask yourself “why” and define what high value activities the lower value activity on the list is not allowing you to do. Are you missing the opportunity to do the important things that would move your business forward because your telling yourself you “don’t have time?”
5) To a qualified prospect, there is no such thing as too high priced, there is only lack of value. Provide the value prospects need, want and can’t get somewhere else, and they will pay the price. Not providing unique value to prospects means you or your product/service are a commodity, and the only thing left on which to compete is price. And that’s death for most small businesses. Is your value proposition adequate to support higher prices and are they priced to capture that value?
6) Finding a prospect’s significant need or pain is required to consistently make sales of non-commodity items. Helping prospects become clear about their significant need or pain, their goal to resolve the situation, and what it is costing them to leave the situation unresolved is the only way to consistently make sales. No need/pain = No value = No sale. When you are speaking with your prospects, are you asking enough questions to define what their true need or pain point is?
7) The definition of marketing is not spending money. Marketing should have a specific, defined and measurable purpose to support a goal of the revenue or profit plan. Otherwise it’s a nebulous expense with no defined purpose or ROI. There are a lot of interesting marketing ideas and businesses usually have a significant need to increase their revenue and profits. That can lead to an “I’ll try anything” mentality. Resist that impulse. Insist on rigor in your marketing spend and from your marketing vendors. Remember that there are more seemingly good marketing ideas than you have money to spend. Spend wisely and with purpose. Is your marketing spend properly targeted and measured?
8) The first good idea is not necessarily the best idea. Take a little time to explore alternatives after you have found a good option. In the universe of alternatives, there might very well be a better idea available or a way to make the first promising idea better. This applies to hiring employees, as well. If you have someone who looks like a winner, interview a few more candidates to validate that you are making an optimal decision. Please notice that I said “a little” time. The other extreme is the problem of paralysis by over-analysis, which creates a worse situation than choosing to go with the first right answer. With that caveat stated, take a little time to look for a better alternative or an opportunity to improve the first good idea. Do you continue to look for better ideas after you discover a good one?
9) Email is not a form of communication, it is a form of information transfer. It’s good for transferring the knowledge that the meeting is at 4:00. It is not good for communicating how you see a situation, how you feel about a situation, a sense of urgency or resolving complex problems. If you’ve ever had someone misinterpret an email from you or have had long emails go back and forth with no problem resolution, then you know what I mean. If you want to be understood, speak to the person. Are you using email for purposes that a conversation would handle better?
10) Situations in business can often be important but are rarely serious. The business must perform and provide a livelihood for those involved. That makes it important. But it is not life and death. We’ve all had a situation similar to the business owner who was fuming over losing a large client through no fault of his own which instantly shrank to insignificance when he got the call that his child was in a serious car accident. Don’t let the many disappointments you will experience in your business life ruin the quality of your life. Business should be fun and rewarding. Celebrate your successes and give it your best. Then enjoy your one and only life. Are you enjoying your business? Are you able to celebrate your business achievements and keep your business disappointments in perspective?
If you’re having challenges with any of these 10 items, perhaps I can help and perhaps we need to talk. I must have learned something I can share with you from my MBA education, 40-year business career and working with dozens of clients…right?