We’ve really enjoyed both of the recent Sherlock Holmes movies and Laddie has read The Adventures of Sherlock Holmes on his Kindle. The fictitious Holmes is a genius at solving mysteries, seemingly with ease. A famous quote attributed to him is “Elementary, my dear Watson,” but it turns out his character apparently never said that. The actual quote from a short story is “It’s elementary.”
Certain things in business are elementary, or fundamental, and are the basic principles or building blocks. We call these “Business Truths” and mastering them will help you create and maintain a successful company. New tools and techniques come and go all the time, and it’s important to keep abreast of changing trends and technologies in business. But in our experience, the companies that thrive are ones built on a firm foundation.
We believe these are some of the most important elements of a strong business foundation:
Understanding why you own your business. The obvious answer may be “making money” but it should go deeper than that. In fact, having asked this question to hundreds of business owners, we’ve only once received the answer “to make money.” If you want to be successful in business (and you get to define what success is), it boils down to understanding your personal goals and what you expect your business to do for you.
Is it supposed to give you a certain lifestyle? Do you want the freedom to attend all of your kids’ games, plays and other events, which you wouldn’t have with a job? Do you want to create something that will go beyond you — maybe to your children or employees? Do you plan to grow the business to the point where you can sell it and fund your retirement?
Why you own you business is one of the most important questions you can ask yourself. Once you are clear on the “why,” the “how” you will run your company becomes much easier, now and in the future.
Building a solid team of advisors. Few people make it through life without needing outside advice and the same is true of business owners. Surrounding yourself with great advisers is one of the fundamental keys to success.
Your team of advisers might include paid professionals, such as your attorney, accountant or business consultant. Other options are professionals you respect, other successful business owners who might be willing to mentor you, or perhaps successful people in your own industry in a non-competing location.
Even professional business consultants like Laddie, who analyzes businesses on a daily basis, need trusted advisers. One of his is a retired businessman named Bruce. We think so much of Bruce that we modeled the main character in our book after him.
Understanding your cash flow. You can’t operate your company without cash and you need to understand how it flows in and out of the business. Unless you you’re fortunate enough to have so much cash you don’t know what to do with it all, you need to monitor and manage its flow through your company. A common expression in business is “cash is king,” but many business owners don’t take the time to master this fundamental part of their company.
Cash flow is one of the top reasons business owners lie awake at night. If it’s a concern for your business, mastering the fundamentals includes preparing projections, learning how to speed up collections, slowing down outflow, and working with banks to assure that your financing is correct. And if you have a multi-layered business with different locations, divisions, or product lines, you need to understand the effect each has on your cash flow.
Appreciating your customers and letting them know it. We’re always amazed at the companies that never thank us for our business. This fundamental should be a no-brainer but how often does it happen to you? Like many of you, we’ve made large purchases, such as cars, homes, electronics and appliances without receiving a simple thank you.
Do your customers know how much you appreciate their business? Have you told them lately? If you have employees, have you implemented company-wide customer service guidelines and trained everyone to say “thank you?” Remember, your competition would be happy to take your customers off your hands, and a simple thank-you could be all it takes for them to stay.
Every business owner, regardless of how long they’ve owned their company, should be acutely aware of these four fundamentals and take care of them. These are things you can never be lax about because they constitute the foundation that will determine whether you reach your goals and achieve the things you want from your business. To quote Sherlock Holmes, “It’s elementary.”
Laddie and Judy Blaskowski are partners in several businesses, including BusinessTruths Consulting. They are authors of The Step Dynamic: A Powerful Strategy for Successfully Growing Your Business. Judy@BusinessTruths.com.