Six Steps to a Profitable and Sustainable Business Part 6

4. The Power of People and Systems

Systems run businesses and people run systems. Systemizing the routine tasks in your business is the key to overall efficiency. People, however, are the business and contribute most to the success or failure of your organization. You must focus on building a team with a common cause and shared vision; a team with well developed interpersonal and communication skills, trust, support, commitment and energy. Only when the systems and people are effectively in place, can you, the owner, graduate from working in the business to working strategically on the business.

5. Leadership

History teaches us that Leadership is a Critical Performance Criteria. Whether it is world events (Winston Churchill, John F. Kennedy, General Norman Schwartzkoff), sports (Vince Lombardi, Joe Torrie, Michael Jordan) or business (Jack Welch, Warren Buffet) leadership is consistently the determining factor between success and failure. Why would you expect that the results and success of your business be determined any differently?

As a result, your thoughts, words and actions are the critical performance criteria for your business. As a result, how much time, money and effort are you investing in improving yourself. How much time do you spend examining your strengths and weaknesses, setting development goals for yourself, seeking outside advise.

Developing the entrepreneurial mindset, understanding that marketing is an investment for your business not an expense, consistently testing and measuring, acknowledging the power that people and systems bring to your businesses growth and success and the need for effective leadership are the first five key ingredients that successful business owners must possess.

Ask yourself, which of these ingredients do I need to improve upon and what difference will this make to my business and my life?

Six Steps to a Profitable and Sustainable Business Part 5

2. Marketing is an Investment

Your accountant will tell you that marketing is an expense. The entrepreneurial mindset views marketing as an investment. The greater the difference between what it costs you to acquire a customer and the lifetime value of the goods or services sold to that customer, the greater your profit potential and return on investment. Later in this article under the title Niche I will introduce the five key marketing leverage points in your business that if managed properly will rapidly improve cash flow, revenue and profits. It is important that you correctly identify the marketing strategies/investments that will keep you ahead of the competition.

3. Test and Measure

The basic difference between successful businesses and poor performers is that they test and measure everything that they do. It is impossible to play a game or manage a business without keeping score. An iatrical part of any business is to test and measure everything of significance in your business. You can then build a set of Key Performance Indicators (KPI's) tailored specifically to be measure. This is the only way you, as the business owner, can continuously monitor all the key factors that determine growth and profitability for your particular business. Your KPI's and your Financial Plan constitute the Management Control Plan for your business. This is like a Control Panel on your desk that enables you to track your progress. It will tell you what is going on in every key area of your business and enable you to respond quickly to changes and new situations.