Starting and running a business is one of the most exciting things you can do on this planet. Every day you have to get the creative juices flowing to solve all kinds of problems generated by customer requests. But after the problem is solved, and the customer is happy, and the excitement of accomplishment has subsided, you still have a business to run.
I love to see people succeed and excel at whatever they choose, but at the same time I see so many bright, smart, and driven folks that have all the tools necessary and somehow snatch defeat from the jaws of victory. I have compiled a short list that I believe are the most important things you can do to help keep your company healthy and growing.
1. Pay yourself more than you are worth – I’ve seen it happen far too often, heck, I am guilty of actually doing this for a short time. When the man in charge, the big cheese, the head honcho, the big wheel, the kingpin has a win in the business, completing that job that has seemingly put the company over the top or just came off the best sales month in company history and the bank account now has a balance that you look at and say wow, I could pay off my car or I could pay off my house! BEWARE!
Most folks don’t know how to handle success or the money and resources that come with it. The vast majority of people will make an error at this point that will kill the business. Don’t suck the cash out of the business to buy stuff for yourself. Most of that money must be invested back into the company and its people to grow or just maintain the current level of operation.
You will spend a lot of time and energy in your business working and investing and making less than you are worth. But, if you keep investing in yourself and your company there will be a time when your company will pay you more than you are worth. And this will not be a one-off situation because of a big sale or a good month, it will be a sustained long term income because of your discipline and dedication.
2. Love the owners – Realize who owns your business. You can say I do, our investors, the employees, or the partnership… but the bottom line is that your customers own your business and they are your boss. If you don’t know or care who your boss is you will have a problem.
Don’t think that it’s just the small company or the big company that is susceptible to this line of thinking, it is any company. Even the mighty Apple did this back in the 90s and almost suffered death before being rescued by Bill and Steve.
Stay in touch with your customers, develop relationships, and create lines of communication so they can tell you what they want and need, your bottom line will reflect your relationship with the owners.
3. Price for profit – Almost all new businesses gain market share with price. While this is an effective tool to ‘break-in’ a target market it is not a sustainable long term strategy. You might say, “What about Wal-Mart? What about other discount retailers that are wildly successful?” I’m glad you asked. Sam Walton might have broke into the market with price, but don’t think for a minute that Wal-Mart sells at a discount today. Their marketing says they have low prices, and they do, but it does not say they have low margins. Big Difference! The truth behind Wal-Mart is they are a logistics company. They beat everyone to the marketplace with their efficient delivery systems, and it is that technology that allows them to sell at a lower cost to the consumer but still maintain healthy profit margins. Boom!
Your small business must do the same thing. It’s OK to break-in with a discount price but if you have no competitive advantage that will allow you to still make a great profit at that price, you will not last. What is the main goal in any business? If you hesitated to answer this question, go read this book The Goal by Eli Goldratt. You will find that the goal is ultimately to make money. Please do yourself, your employees, your customers, and your company a favor and price your goods and services so you make a profit.
Keep in mind that there are a multitude of factors that determine your success, and all of them ultimately depend on you. Remember, even if you suffer loss or setbacks in these areas or others, you cannot fail unless you quit.
Keep pressing toward the mark.