Why building a strong business foundation is extremely important.
A solid business foundation can mean the difference between selling 20% of your business for $250,000 or 80% for $250,000.
It’s not important, it’s everything.
The first thing you should identify is: WHY you are in business? Is it just to make money? That’s fine… for now. But that’s not long term for most people. Mostly because at some point after success and buying everything you want and need, money won’t matter anymore. Having a clear purpose will drive you to get up every morning.
Building a strong foundation means understanding all elements of your business, because if you understand it, it probably exists. If you can describe your sales process, it’s more than likely happening the way you want it to, unlike most start-ups who don’t have time to create process. Most entrepreneurs are flying by the seat of their pants just trying to stay alive. And I get it. I was that guy. I spent most of my time on unnecessary things like replying to emails that don’t matter, or having meetings where nothing gets completed or assigned. There was no clarity.
When you build a strong foundation you FIND clarity, purpose and most importantly, establish goals. Once goals are established, you can create a plan to reach those goals. I find that when you don’t have goals, it’s extremely hard to create a plan to get there and breakthrough those goals.
Having clarity, goals, process and accountability, aka a strong foundation, will be the reason you succeed. It could also be the reason you keep your business. Understanding where you are going, how you are going to get there and how the money flows in and out of your business gives you massive leverage when it comes to negotiating with potential investors, vendors and talent. Knowing you will need money before you ACTUALLY need it can mean the difference between selling 20% of your business or 80%. Knowing your budgets and cash flow will give you the high ground when talking to vendors. Having a plan with realistic projections, true process and a culture of discipline will attract the right talent.
The main takeaway is that if you can build a strong foundation your company will become proactive and not reactive.