Editor's note: This article is excerpted from Million Dollar Habits from Entrepreneur Press.
You must develop seven key habits for business success. The absence of any one of these habits can be costly--if not fatal--to your business. When you become competent and capable in each of these areas, you'll be able to accomplish extraordinary results, far faster and easier than your competitors.
The first requirement for business success is the habit of planning. The better, more thoroughly, and more detailed that you plan your activities in advance, the faster and easier it will be for you to carry out your plans and get the results you desire once you start to work.
There is a "Six P" acronym that says, "Proper Prior Planning Prevents Poor Performance." Very often, the first 20 percent of the time that you spend developing complete plans will save you 80 percent of the time later in achieving the business goals you've set.
To plan better, develop the habit of asking and answering the following questions:
- What exactly is my product or service?
- Who exactly is my customer?
- Why does my customer buy?
- What does my customer consider value?
- What is it that makes my product or service superior to that of my competitors?
- Why is it that my prospective customer does not buy?
- Why does my prospective customer buy from my competitor?
- What value does he/she perceive in buying from my competitor?
- How can I offset that perception and get my competitor's customers to buy from me?
- What one thing must my customer be convinced of to buy from me, rather than from someone else?
Once you've asked and answered these questions, the next stage of planning is to set specific targets for sales and profitability. You must determine the exact people, money, advertising, marketing, distribution, administration and service people, and facilities you will require in order to achieve your goals. The more thoroughly you plan each stage of your business activities before you begin, the greater will be the probability that you will succeed when you commence operations.
Get Organized Before You Get Started
Once you've developed a complete plan for your business, you must then develop the habit of organizing the people and resources you need before you begin. In organizing, you bring together all the resources you've determined you'll require in the planning process. In the military, there is a saying, "Amateurs talk strategy, but professionals talk logistics." It's absolutely essential that you determine every ingredient you'll need before you begin business operations and bring them together so they're ready to go when you open your doors or begin your project. The failure to provide even one important ingredient in advance can lead to the failure of the entire enterprise.
Find the Right People
The third habit you must develop is the habit of hiring the right people to help you achieve your goals. Fully 95 percent of your success as an entrepreneur or executive will be determined by the quality of the people you recruit to work with you or to work on your team. The fact is, the best companies have the best people. The second-best companies have the second-best people. The third-best companies have the average or mediocre people, and they're on their way out of business.
The fourth habit you need to develop for business success is proper delegation. You must develop the ability to delegate the right task to the right person in the right way. The inability to delegate effectively can be the cause of failure or underperformance of the individual and can even bring about failure of the business.
When people start in business, they usually do everything themselves. As they grow and expand, the job becomes too large for one person, so they hire someone to do part of it. However, if they're not careful, they try to retain control of the task and never fully hand over both authority and responsibility to the other person.
In my Advanced Coaching and Mentoring Programs, I teach executives and entrepreneurs to identify the two or three things that they do that contribute the most value to their companies and then delegate the rest. You must do the same thing. You must learn to think in terms of "getting things done through others" rather than trying to do them yourself. It's the only way you can leverage and multiply your special skills and abilities.
Inspect What You Expect
The fifth requirement for business success is for you to develop the habit of proper supervision. You must set up a system to monitor the task and make sure it's being done as agreed upon. The rule is, "inspect what you expect." Once you've delegated a task to the right person in the right way, it's essential that you monitor the performance of the task and make sure it's done on schedule and to the required level of quality. Remember, delegation is not abdication. You are still responsible for the ultimate results of the delegated tasks. You must stay on top of it.
When you've delegated a task, set up a system of reporting so that you're always informed as to the status of the work. Be sure the other person knows what is to be done, and when, and to what standard. Your job is then to make sure he or she has the time and resources necessary to get the job done satisfactorily. The more important the job, the more often you should check on the progress.
Measure What Gets Done
The sixth practice of successful entrepreneurs and executives is the habit of measuring performance. You must set specific, measurable standards and score cards for the results you require. You have to set specific timelines and deadlines to make sure you "make your numbers" on schedule. Everyone who's expected to carry out a task must know with complete clarity the targets he or she is aiming at, how successful performance will be measured, and when the expected results are due.
In our Focal Point process, we teach the importance of selecting and defining specific goals, measures and activities that are then used as benchmarks for performance. Jim Collins, in his book From Good to Great, refers to the importance of selecting the "economic denominator" for a company, and for individual goals and objectives within that company. Whichever number you choose, it must be clear to everyone, and it must be monitored continually to make sure everyone is on track.
Keep People Informed
The seventh habit for businesspeople is the habit of reporting results regularly and accurately. People around you need to know what's going on. Your bankers need to know your financial results. Your staff needs to know the status and the situation of your company. Your key people, at all levels, need to know what results are being achieved.
In a study on workplace motivation, several thousand employees said the most important factor leading to job satisfaction was "being in the know." People in an organization have a deep need to know and understand what is going on around them in relation to their work. The more thoroughly and accurately you report to people the details and situation of your business, the happier they'll be and the better results they will get.