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When you begin a business it can be easy to be enamored of the idea of running a business. Most people who begin their own business are passionate about what they are in business to do. That is true whether or not the business in question is a bookstore, a tech start-up, a restaurant, a store or the any other type of business. That passion for the object of your business is great. It is what motivates you to go into business for yourself. Well, that and the desire to be your own boss! However, that passion alone isn’t enough to make your business a successful one. What is enough?
Succeeding in business requires constant attention to a myriad of boring and/or difficult details. A truly great business person doesn’t avoid the aspects of the business that they don’t like. They can handle the tough problems that are sure to occur. It is outcome that you can influence, just like profitability. Highly disciplined leadership is an important factor in a successful business. That disciplined leadership allows a business to stand out among all of their competitors. Below we will cover the ten most important characteristics that create a culture at your company that will lead to success.
Characteristic Number 1 – Leadership:
It probably will not come as a surprise to you when I say that success starts at the top. Harry Truman faced a daunting job when he became president after the death of Franklin Roosevelt. He had to decide whether to use nuclear weapons (he wasn’t even aware the bomb existed) and lead the United States as World War II ended. The country had to transition from war to peace. President Truman famously had a sign on his desk that was inscribed with, “The buck stops here!”. He knew that the country’s success depended on his leadership. All great business leaders know that is a motto that applies to them as well.
First and foremost, the owner of a successful business functions as a businessperson. That means that the owner of the business is engaged at all levels of the business and making sure that things are running smoothly. He or she sets the example and demonstrates the kind of work ethic needed for success. Their performance serves a driving force for everyone else’s performance. It is easy to identify business owners who are so engrossed in non-business activities and work that they simply are not paying enough attention to the details of the business. That leads to a business that is free-floating and rudderless. The business lacks direction and structure. A business simply can’t run on automatic pilot. There must be a firm hand at the wheel to steer things.
Characteristic Number 2 – Business Culture:
You must consciously create the culture of your business. You can’t just leave things up in the air and hope for the best. Culture permeates a company from the top down. As we covered in characteristic number 1, it begins with the leadership. The leaders of a company set the tone. They set the tone in terms of work ethic, organizational structure, accountability, ethics and the company’s personality. That tone is clear at every level of the organization.
Businesses that possess well-defined cultures stand out from the crowd because they’re a joy to interact with. The culture is one of customer service. Customer points of contact at the front desk, retail areas, and service departments – everything throughout the business feels natural yet orchestrated. You don’t see employees that are indifferent and disengaged. Great business cultures require leadership, systems, training, coaching, accountability and commitment.
Characteristic Number 3 – Financial Literacy:
It may seem obvious but financial literacy is absolutely key. You can have a ton of knowledge in your field. You can be a genius in your field. You can come up with a great invention. You can be a people person through and through. None of that can take the place of financial literacy if you want your business to succeed. It doesn’t mean that you need to be an accountant or a trained bookkeeper to own a business. You can always hire people for those jobs. It does mean that you need certain financial skills. What are those skills?
Here are some basic skills you need. The owner of a business needs to know how to read and understand the business’ financial reports. Moreover, the owner should be able to use those reports to make sound decisions. Another important skill is to be capable of building a cash-flow plan to project service and retail sales goals; complete with a budget to manage expenses. Being able to obtain results in a business that is fiscally solid and has the cash and creating resources to fund growth is a vital skill. What a business can’t handle is an owner who is in a perpetual state of financial stress. When a business has trouble paying the bills and retail shelves have more room for dust than they do for product you are in trouble. Cash provides the fuel for a successful business. That is why you need to master these skills in order to be financially responsible and ensure that your business has the cash necessary to achieve your goals and grow your business.
Characteristic Number 4 – Structure and Systems:
Structure provides a skeleton for your business. It is a support on which you can flesh out your business. Imagine for a moment that you do not have a rational and organized system in place for doing business. The result is uncertainty and chaos. It means that your employees and (even worse) your clients don’t have a sense of security and confidence. That is bad for business. Businesses need structure to keep generating capital and growing.
It is structure that allows you to grow a dynamic, efficient, quality-driven business. It ensures efficiency, productivity, consistency and predictability. Predictable results attract investors. They also foster consistency in how work is done, compatible agendas, and cooperation. You might hear this structure referred to as leadership, accountability, systems, standards of performance or policies and procedures. All of those things provides the structure that supports your business’ success. Without that structure your business will become mediocre. Mediocrity never wins in business so you need a deliberate and structured approach to your business.
Characteristic Number 5 – Skill development:
What is the best investment you can make? It is an investment in knowledge. Continuing education is crucial in every professional field. You wouldn’t want to be treated by a doctor who didn’t continually update themselves on the latest medical techniques. You wouldn’t want to be represented by a lawyer who didn’t continually update themselves on the latest court cases. Likewise, you need to update your own skills. Those skills include both the technical skills you need for your field and non-technical business skills. Success is the result of acquiring knowledge and mastering the skills to use that knowledge to the best of your ability.
That commitment to training and education should also extend to your employees. You must invest in your employees. You want highly trained and skilled people working for your company. That kind of skill development is something clients notice and value. It leads to a better first-time retention rate. That is the percentage of first-time clients that return for a second visit within 90 days. In that way, skill development becomes an investment in your brand and in quality assurance. Make sure that skill development is an ingrained company value.
Characteristic Number 6 – Everyone sells:
Why are you in business? You may have a lot of answers to that question. Depending on what led you to your business it may a passion for helping people, it may be to work on cutting edge development in engineering, it may be a love of building things. It can be a lot of things. Let me make one thing clear. The real reason you are business is to make money. Whatever your passion is you can’t follow it without the money you need to provide a living for yourself and for your employees. That means one thing. You must be a skilled salesperson and so must everyone working for you.
Selling an emotionally fraught topic. A lot of people who are engaging and intelligent are not comfortable selling. Even if they love the business and can articulate why it is important they still might be uncomfortable selling the business. People, therefore, have a love/hate relationship with selling. Some people are natural at selling while others feel their gut twisting when in close proximity to a sales situation. You need for your employees to have training in selling and they should get comfortable selling.
The process of selling is just like producing a hit Broadway show. There are writers, choreographers, set designers, lighting and sound technicians, an orchestra … and the actors. The applause and success is earned by the collective efforts of all. It doesn’t matter what an individual’s role is in a company … his or her paycheck depends on the company’s collective ability to sell. Remember that everyone in the company, in different ways, sells your company every day.
Characteristic Number 7 – Work environment:
Nothing succeeds like success. That is a popular saying but it bears repeating. People have long been told that they should dress for the job that they want and not the job they have. That is one example of how that works. You might also say that you should have a business that looks like the business you want to have. Look around at your physical space and evaluate it through the eyes of potential clients.
Success has a “look.” It’s common for business owners to ask me, “What’s the first and most important thing I can do to turn my business around?” More often than not, my response is, “Clean it, paint it and refurbish it.” Front door to back door, everything about the facility should communicate success and support its brand identity. Every piece of equipment should work. Lighting fixtures should be functioning. Walls, décor, posters, pictures, bathrooms and dressing rooms should be spotless. Reception areas should look organized and professional. Dress for success applies to your work environment just as much as it applies to you.
Remember that your clients want to have confidence in you. Having a place of business that reflects competence, professionalism and success helps to build that confidence
Characteristic Number 8 – Compensation:
Pay is a delicate subject. Everyone is curious about how much other people make but most people are reluctant to talk about their pay. Many companies have rules against their employees discussing their pay with other. Oddly, for a such a delicate subject, pay is a crucial component in the success of your business. Why is that?
The basic answer to why compensation is so important to the success of your business can be summed up in one word: motivation. Pay is one of the most important motivating factors for your employees both because of the basic need for money to live and because of what their pay says about their value to the company. So, how should you approach compensation for your employees?
Compensation is one of the most hotly debated topics for owners and leaders. Commission, Team-Based Pay, fixed rate, sliding scales, product/service charges, or independent contractor – there is no one right way that will serve the needs of all. Different forms of compensation may work better for different companies. But when all the debating is done, a compensation program must achieve three goals:
Inspire and reward the right performance and behaviors: If you keep rewarding performance and behavior you don’t want to encourage then you continue to enable that behavior. Commission-based pay is notorious for rewarding individual sales while paying for performance and behaviors you don’t want.
Fit the financial reality of the business: There are only 100 pennies in a dollar. Whenever payroll exceeds a company’s financial reality, it instantly initiates a cash crisis that, if left unchecked, can be destructive and even kill the company. The key is that payroll is an important part of your budget and you manage it as such.
Provide income growth for employees: Here we are back to motivation. The best companies provide employees with growth paths for income and achieving their full potential. Raises and bonuses can help you retain your best employees, attract new talent and serve as one way to show how much you value your employees. You should work with your employees (and they need to work with you) in order to come to best solution for compensating them.
Remember: “A behavior that gets rewarded gets repeated.”
Characteristic Number 9 – Brand Identity:
If you doubt the importance of branding just ask yourself how often you buy things because of their brand. When you go to the supermarket you could buy generic versions of many popular brands such as Coke, Cheerios or Kleenex. Yet, you still often pay a little more because you associate the product with the brand. That is not an accident. It is the result of careful marketing and branding. Obviously you need to give careful consideration to the brand identity of your business.
When it comes to brand identity, businesses fall into one of three categories: 1. nondescript, 2. blends in, or 3. stands out from the competition. Nondescript businesses are just bland places. They are generic and not memorable. There is nothing unique about their facility, signage, logo, print materials, service or personality that makes the “wow” meter show signs of movement. There is not enough effort at branding and marketing with these companies. Companies that blend in make more an effort at marketing but their marketing still isn’t unique and polished enough to “pop”. Their branding is a bit too reminiscent of branding that other companies are doing. There is nothing overly special there. On the other hand, businesses that stand out from the competition do branding right. Businesses with strong brand identities send the “wow” meter flying into the success zone. It’s the complete package, from web site, print materials and phone experiences to its facility, décor, team personality, execution of work and all those special touches that radiate success.
It is important to note that each of the previous eight success characteristics that we discussed are a part of creating a brand. You need to use each of them as pieces of the puzzle. Leadership is crucial to setting the values that will be part of your brand. Your business culture will be reflected in your brand and how it is perceived by your clients and customers. Your financial literacy will give you the ability to spend money on your branding efforts. Sales and marketing should be part of everyone’s skill development. That translates to everyone selling your brand. Your employees are important ambassadors for your brand. Their skills play a role in that and so does their compensation. Finally, your work environment is a crucial part of developing a brand identity that is perceived as successful. First impressions do count.
Characteristic Number 10 – Community Service:
Community service is an important part of any successful business. Why is this? After all, as I already pointed out, the point of operating a successful business is to make money. If that is the case then why is giving away money, products and time good for business? How does it lead to success?
To begin with let’s go back to branding for a moment. Community service and charitable donations are a good thing for your brand because they generate good will among the public. The true character of a successful company is defined by how it gives back to the community. Community service also instills pride in your employees. It gives them something positive and important to point to when they are acting as your brand ambassadors.
Next let’s go on to consider the idea of success breeding success again. Community service comes in many forms, from fundraising to employees donating personal time to a worthy cause. If you and your company can afford to be generous with your time and money that makes you look like you have achieved financial success. That leads to more success because it makes more people want to do business with you.
Next let us consider skill building. Donating time and services allows you and your employees to continue to hone your particular craft and your sales ability.
Finally, from a strictly monetary standpoint, consider your taxes. Your business can get a tax break from charitable donations. That helps your bottom line which, as you know, also helps other aspects of your success such as branding and compensating your employees.
In the end it is also about heart. Business success simply does not appear complete if it’s all about making money and generating profit. A business, no matter how profitable or magnificent, is never truly successful without a warm heart and sincere compassion for the wellbeing of others.
These are the ten characteristics of a successful business.
Laying out the ten characteristics of a successful business provides you with a roadmap. You can look at them and hold them up against your business to see how you are doing. This helps you see areas where you can improve your business in order to ensure success. Do you need to improve your branding efforts? Could your employees benefit from extra training or the opportunity to take classes? Once you have asked yourself questions like those you can begin to improve. Collectively, these characteristics establish a world-class standard that forward-thinking and business-minded leaders can strive for.
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