There Are Only 6 Things You Need to Avoid Business Catastrophe, According to This Expert Consultant Focusing on these six elements of your business can help alleviate most of your small business challenges.

Everyone makes mistakes while growing a business. Donald Miller says he made 537 of them.

"That's exact," he jokes. "I kept a journal."

But along the way, he says, he did six things right — and those made all the difference. "I really believe that if you can manage just six parts of your business well, you're going to avoid 90% of the catastrophes that happen to small business owners," Miller says, who teaches these six things as CEO of Business Made Simple and author of the new book How to Grow Your Small Business.

So what are the six? Miller explains in this conversation.

What do you think people misunderstand most about business?

Nobody starts a business to run a business. Nobody. They start a business because they love a product. They start a business because they like customers. They start a business because they're crazy about their idea. What happens is, if it works, they find themselves running a business and they never saw that coming.

You say there are six things to know when running a business. Let's go through them — take it from the top.

The first is leadership. I think of leadership as your guiding principles, the vision that you cast for the organization, your core values, critical actions, key characteristics — a package of guiding principles. The key differentiator that keeps a business alive is that your mission statement actually includes three economic objectives. We're going to sell X number of this product. We're going to sell X number within this division.

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You never see that in a mission statement, but if your business wants to survive and wants to thrive economically, make your mission statement economic and give it a deadline. You can call it a "goal statement" if you want, but what that does is it reverse engineers the entire business around this idea that we are here to make money. So many small business owners don't do that. They feel guilty about making money.

That seems logical — so why don't more people do it?

I think people don't include economic objectives in their mission statement because they don't want anything in their mission statement that can actually be measured. They don't want to know if they failed. I say, put a scoreboard right there in your mission statement. Make it incredibly specific.

This would be a formula for a good mission statement: "We will accomplish X by Y because of Z." X is the three economic objectives, Y is the deadline and Z is the reason that you're in business in the first place, which is to serve customers and solve their problems.

Now let's say six months into that, you've got 18 months left before your mission statement expires and needs to be rewritten and you are behind on the numbers. You pull the sales team and the marketing team together and you say, "Hey, how can we get ahead of this? What's going on?" It forces a sense of urgency to make this small business successful economically, which is one of the reasons we actually started the business in the first place.

OK, so that's leadership. What's the next thing business owners need to know to be successful?

I love the metaphor of an airplane. Leadership is your cockpit, and you enter the economic coordinates that you're trying to head toward in the flight computer. To get that plane moving, you're going to need a couple of engines, and the right engines represent your marketing.

In order to have effective marketing, you need to do just two things:

First, clarify your marketing message. Identify what problem you solve and talk about it endlessly. More people will buy your products if you talk about the problem you solve rather than if you talk about the product itself.

Second, create a simple sales funnel, have lead generators, collect email addresses, email people, let people know, and text people. Get your marketing sales funnel up and running. The left engine is your sales engine.

Sales can be so hard for first-time entrepreneurs. It makes them uncomfortable.

Everybody needs to learn how to sell. But it's all about inviting a customer into a story. If you know how to do that, you'll sell a lot more, and you'll never even realize that you were selling.

OK, so let's keep going with the airplane metaphor. What else is in there?

The wings of the airplane represent your products. You need to constantly analyze your products to make them more profitable and more in demand. The more profitable and in-demand your products are, the larger the wings on that airplane and the better that airplane's going to fly.

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The body of your airplane is your overhead, and your overhead is dominated by your labor costs. If you're a solopreneur, it's still dominated by your labor costs because you are the cost. You're the one sucking money out of that company. The more productive your labor can get, the better.

And how do you bring all these things together?

I teach people to run their small business using only five meetings. It's the all-staff meeting, the leadership meeting, the department standup, personal standup, and quarterly performance reviews.

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If you can have those five meetings, it solves 90% of the other meetings that you're having. Everybody knows what their key objectives are, and everybody's working on them in real-time.

Alright, so you've given me five things so far: Leadership, marketing, products, overhead and labor. What's the sixth thing every entrepreneur needs to focus on?

Cash flow. I'm really good at making money. I don't like to manage money. I needed a better way to manage my personal cash flow, so I created a system using five checking accounts: I just go onto my online banking portal, I see how much money the business has, how much money I have, how much money I've set aside for taxes, how much money I have in my rainy day fund, and how much money I have in my investment account that I can now go buy investments with. The money comes into the business and flows through other checking accounts because of high thresholds.

Those six things that I just described, I think solve 90% of business problems. They solve your people problems, they solve your cash flow problems, they solve your marketing problems, they solve your sales problems, they solve your leadership problems because you've cast a very strong economic vision for the organization. I can't do anything about the hole in the roof of your commercial property, but the rest of it you're not going to have to worry about.

You said these were hard-won lessons, and that you made a lot of mistakes while growing your business. What were some of the big ones?

I listened to so many billionaires and successful entrepreneurs for inspiration. They have all almost said, "We just were never focused on money; we were focused on people." I think that's something that billionaires say after they've been attacked a million times and reverse-engineered their history.

Very successful people focus on economic objectives, and that's the only way to build a company. One of my early mistakes was that I had too much of what I call a "ministry mindset," and I mean nothing negative about ministry. It's a very important part of our culture, but that's not what your small business is. I over-indexed on culture. That was one of the mistakes I made early on.

That balance between profit and people is a tricky one for a lot of entrepreneurs. How do you navigate that line?

If you are taking money from customers without solving their problems, you might be more economically successful — but you're doing the wrong thing and your business eventually is going to pay for it, because you're going to ruin your reputation. Almost weekly, somebody will come to us and offer a truckload of money to do something that is not in our mission and not in our wheelhouse. We say no every single time.

Not only that, but if I go in and do a strategy session to help somebody grow their small business, it's pretty expensive. I get on the phone with them and I say, "Look, this is what we charge. I'm more than happy to come in. It looks like I can help you. If you don't make a 10x return on what you pay me within 12 months, I will pay you back. I will refund all the money that you pay me," because I don't want anybody ever to say, "Don Miller is a bad investment."

Thankfully, I've never had to write that check. I imagine someday I will have to write that check. I think that's a pretty good way of keeping ourselves in check. We have real value, we're solving real problems, and we don't mind charging for it.

To hear an extended version of this conversation, listen to the Entrepreneur podcast Problem Solvers.