How to be successful in Business
Bruce Coudrey • August 17, 2021
Everything you need to know about success as a Business Owner or Entrepreneur
What makes a business owner or entrepreneur successful? Is it:
- Hard work?
- Good luck?
- Being in the right place at the right time?
- Being clever?
- Genius?
- Teamwork?
- Belief?
- Persistence?
Business success could be due to all of these things, one of these things, or none… In years gone by business owners have been successful for as variety of reasons, but in the future business ownership will not be as simple or easy as it has been in the past, and therefore business owners need to eliminate a reliance upon luck, and rely upon “science” to find success.
In the past many people have approached business ownership like gambling, or the same way that gold prospectors did in the 1800’s around the world…. And while some people were successful, like gold prospectors, many people were unsuccessful.
At Benchmark Business Sales we see many business owners every week who operate their business on the “luck” principle, rather than planning the way that the business will operate. If you rely upon good luck for survival, you will eventually be disappointed. Good luck cannot last forever.
How do you turn your business success to a science?… and eliminate the reliance upon hard work and good luck?
The answer is to take these steps.
- The first step is to apply research.
- The second step is to produce a thesis, or a hypothesis
- The third step is to test the thesis
- The next step is to implement the plan
- The last step is to continually measure and test results.
Research is the first step in applying a scientific approach to business. Research the market (who are the potential customers and clients), research their habits, their likes and dislikes, produce a “profile” of the type of client or customer that the business will serve. Research competitors, barriers to entry, financial metrics (profit margins, KPI’s, typical operational costs), the future of the venture, ability to recruit and retain staff, .. there is a lot to learn from researching.
Once the research is completed and collated it is time to produce a business plan. A Business Plan is like a thesis on how the business should operate. The plan is based upon the facts uncovered in the research phase, and it covers the way the business will operate financially, operationally, and how marketing and advertising will operate. It also provides a clear plan for how the business is to be operated. A plan which could be handed over to anyone, who could implement that plan and run the business.
With the plan completed it can be tested.
Once the plan is implemented and tested the results can be measured and tested against the research, and the thesis. If the actual operation of the plan produces unexpected results the plan can be altered and tested again…. This is the scientific approach to business ownership and management, and this is the best way to take the risk out of business ownership and operation.
Don’t rely upon “luck” for business success. Turn to ‘science’ and make sure that your business isn’t just successful, but your success is sustainable.
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The Business Lifecycle comprises: Start Up Operation and Improvement Wealth Management Exit. Business Purchase or Start Up Whether starting a new, or buying an existing, business, the following should be considered to ensure you make an educated decision before proceeding: Pro's and Cons of the industry Business Planning Marketing strategy Registration and licence requirements Name registrations (including ASIC and Domains) Tax Structures and Asset Protection Workplace Health and Safety Tax Office Compliance Intellectual Property / Trade Marks Insurances – Prof Indemnity, Contents/Building, Public Liab, Workcover, Life, Income protection, Key Man Finance & cash flow requirements Staff and employment requirements and obligations Fixed and Variable expenses, break even analysis Management and reporting systems. Operations and Improvement Sound business operations require the right foundations. This means access to accurate numbers and key measurements in a timely manner so you know what is happening in the business at any point in time. Business owners must be able to regularly review and monitor performance, and make changes quickly. Three main areas for business improvement are: Increasing Gross Profit margins Reducing overheads, and Growing sales. Regular meetings, monitoring and implementation of your strategies enable you to quickly see improvements to your profits. Many businesses fail because of a lack of planning. It is imperative that business owners manage, monitor and measure business performance to know where changes can be made, and to see that business plans are working. Wealth Management What is wealth? To be wealthy simply means you can afford your lifestyle, now, and into the future. Business owners should manage their affairs to grow and build wealth. They should also aim at reducing their input into the business and ultimately retiring. Exit There are many ways that this can be achieved. A succession plan or exit strategy will help your business transition smoothly to the new owner – and derive more value. It clearly outlines your timeframe, expected sales value and who your targeted purchaser is. It is highly recommended to plan your exit early, the sooner the better. That way, you have time on your side to maximise the value of your business for sale. Once your timeline is set you can then clearly set measurable targets to reach your business’s full sale potential. It’s also important to know who your targeted purchaser is, being your family, an investor, a new working owner or your business team. There are many different strategies and planning solutions depending on your ideal purchaser… So start planning your exit strategy now! If you’re thinking of selling your business, send an enquiry to admin@benchmarkbusiness.com.au. One of our brokers will be happy to assist you. If you would like more information, please see tips and advice from the ATO here: https://www.ato.gov.au/Business/Privately-owned-and-wealthy-groups/Tax-governance/Tax-governance-guide-for-privately-owned-groups/Starting-your-business/