The 5 Essential Elements of an Efficient Business No Matter What Your Business Is
People and process are more important to your success than that idea that you're in love with.
Some years ago, I had an idea so strong in my mind, I had a dream location and a dream demographic. I was convinced it was a unique idea. No way anyone has ever thought of this business model -- or so I thought.
Needless to say, I was wrong. A year later, while I was still twiddling my thumbs, someone set up the exact same business with the same model along the same road I intended. My point? An idea is not enough. The people and the process you need to actualize the idea consistently is more important.
These tips will give you pointers on how to achieve premium results and a smooth running system.
1. You need to master the art of management.
The success of a business is not a function of the product alone. In fact, many times the product is not really what sells. Organization is all about management, and great management can sell anything. How else do you think McDonald's turned a hamburger joint into a business worth more than $96 billion?
My business mentor once asked me to show him my library. I had a pretty decent collection, but not a single book on how to run a business. “There is your problem,” he said. I never forgot those words.
You have to become more interested in the management aspect of your business, he told me. I needed to look at my business as a management practitioner, and that required me to gain some knowledge about management. For a more in-depth look at this school of thought, you should take time to read about the systems of the most iconic brands and how they structure their businesses
It doesn’t happen naturally. Good management is a technical discipline -- something you must apply yourself to. A big successful business doesn’t come from a great idea and a lot of capital. The entrepreneur trail is lined with casualties who thought the same. In the words of Sarah Knight, a tutor at the Open School of Management, "business should be a journey, but it is only a stroll if you are not investing in management."
2. You get great people by treating people great.
When you are just starting out, attracting top notch talent is difficult because people aren’t always willing to take a gamble with their livelihood. At this time, it is better to have a small crop of talented people than a large crop of dead weight.
You must be willing to grow an organization slowly. You will literally have to be everywhere, work closely with every person in your small staff and invest your time in one-on-one trainings or staff workshops. If you can get the right group of people and treat them right, you have already taken giant strides.
“True entrepreneurs pay their people on time, all the time. And they take care of the most vulnerable members of their organizations first. I’d rather someone called me a successful entrepreneur on the basis that I never missed my payroll, than on the basis that I made a billion dollars." -- Strive Masiyiwa, founder and executive chairman of Econet
Masiyiwa's reasoning as to why this was important is because “people talk,” and once word gets around that you are a great leader and treat your staff well, great investors will want to work with you, and great talent will be willing to wager it as well.
3. Track your cash.
One key thing you must learn to do is to manage your cash flow -- your accounts receivable (sales) and your accounts payable (expenses). I was always perplexed at the end of every month because I couldn’t tell where all the money went. I even started to wonder if someone was pilfering.
Organization, as the word entails, requires a high level of detail and precision. If we cannot achieve this with our cash, we really can't say we have any sort of precision in our business. My mentor once asked me, "can you track every dollar and every cent?” I couldn’t, and that was the reason I kept having shortfalls.
Put together a cash flow budget with a few different scenarios -- best case, worst case, different assumptions. You can’t predict everything, of course, and surprises happen, but do your best with what you know. Establish an accounting platform now, and use software if necessary. Make sure you can tell where every cent went. If you have the cash on lock down, the planning process is easier.
4. Process. Learn to do the right things in the right way.
People are the backbone of any organization, but process is also an equally vital foundation. “Process” is the series of actions you take in order to achieve an intended outcome or result. Within your business you need to put in place clearly defined ways of carrying out all aspects of the business -- processes for raising capital, strategic planning, recruiting and training staff, research, product development, product testing, sales marketing and so forth.
For instance, you need to master the process of pipeline management; how to get people through your sales funnel successfully and stop losing deals at the negotiation stage. This takes more than just good manners and nice speeches.
It is not enough to just figure it out as you go. Before you even venture an idea or attempt to expand your business into another area, you must be able to wrap your head around the different defined actions that would yield you that picture in your head. Let your staff learn the process, and if it isn’t working as well as you thought, check to see if you are doing the right things right.
5. Tech it up.
In 2017, there is no smooth running organization without suitable tech. We can go back and forth about the morality of the over utilization of AI and the advancement of IoT, but if you want to thrive, what you should be considering is the relevance of IoT to business.
People can only do so much, and in a fierce business climate with heightened competition, all your efforts need to be greased with the suitable tech and online resources. It isn't enough to get a great helpdesk software, one of the best WiFi routers or an automated payment system. You need to get the exact kind that fits your business and your services or it would be an exercise in futility.
The present need for technology cannot be over emphasized for two reasons -- customers are getting used to it and technology has actually become much smarter than when you last checked. You may have the best structures, but without the most suitable technology and internet resources, you will still keep stuttering.
Entrepreneur Leadership Network Contributor
Chidike Samuelson is a serial entrepreneur and professional freelance writer specialized in developing content for businesses and websites. He offers general freelance writing services and business consulting at www.couchmentality.com.