March 5, 2004

Speaking of Business: Start with seven pillars of success in business

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Q: I recently bought a company that went bankrupt. I am forming a team and am trying to rebuild the whole business. What do you do when you help a new or emerging business?

A: When consulting with a new business, I always start with a shared vision that has an exit strategy in mind. I also make sure both your personal and corporate goals are well-defined. Remember, two keys to your success are making sure you have a solid business mission and the discipline to implement necessary systems.

Make certain that planning and systematizing are integrated throughout your whole approach in running your business. Planning includes not only establishing a budget, but also building a system around results so you do not have to function as a person who has to do it all. You can do this by putting in place systems to measure and manage your desired outcomes.

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As a business owner, you need to understand your key environments and then react in each of seven business elements. These elements are: culture, systems, measures, people, cash flow, strategy and organizational design.

Ask yourself what your present state of business is in each of the following areas:

  • Culture: One area that most companies overlook is establishing and enforcing their core values — your employees and vendors all would like to know what your business actually stands for.

    One of the most important functions that you and your management team execute is to develop a clear corporate internal brand and set of values, a code of conduct that is truly enforced companywide.

  • Systems: This involves documentation, consistency and process improvement. Delegating work appropriately falls into this area. This frees up additional time for you to develop more-valuable aspects of your business.
  • Measures: It is important for you to have a clear plan for your business. This will guide you in charting and monitoring the course of action needed to bridge the gap between where the company is and where it wants to be. You can then take the necessary incremental steps to achieve those goals.
  • People: Look at yours and your team’s commitment, talent and behavior. You have the power to plan and choreograph the direction you want your business to take. Part of that is realizing you can systemize the 90 percent routine so you can humanize the 10 percent exceptions.

    Ultimately, you will learn how to profit by working on your business, rather than in your business.

  • Cash flow: You must have a well-managed cash flow and a solid source of funds when needed. It sounds like you have this one covered.
  • Strategy: This is a planned competitive advantage that will get you to your goals.

    All of your key elements need to be focused on serving the customer. There are basically four ways to create a better business. These four play a crucial role in the philosophy of your business planning process, and they are to increase the:

    1. Number of customers of the type you want to have.

    2. Number of times customers come back.

    3. Average value of each sale.

    4. Effectiveness of each process in the business.

    Incidentally, you can deliberately reduce the number of customers with whom you deal. This can simultaneously increase what I call “the quality” of those customers. This strategy is a combination of the last two factors. These four factors will give you critical focal points for your business. When combined, they also give you leverage. For instance, given that you could increase each one of these factors by just 10 percent, the total combined effect of that is an impressive 46.4 percent increase in your business. Is this possible? Yes!

    For example, creating better call guides for incoming phone calls (improving effectiveness) might have a profound effect on the number of new customers a business creates. Suppose you were in a business where the majority of your sales came from phone calls. Also, suppose that you wanted to double your sales. And, assume you knew that your conversion rate (the number of actual sales you get per 100 calls) was 16 percent. Then, given that you could not change the effectiveness of your advertising, all you need to do to double your sales is to double your conversion rate. You might do that by training or by having more effective call guides in place.

  • Organizational design: This involves clear and understood organizational design, lines of responsibility and authority. Simple concept here, but hard to maintain in an emerging business.

    Windsor resident Russell Disberger is a founding member of Aspen Business Group, a Northern Colorado-based specialty consulting and venture-capital firm. He can be reached at (970) 396-7009, or by e-mail at russell@aspenbusinessgroup.com.

    • Q: I recently bought a company that went bankrupt. I am forming a team and am trying to rebuild the whole business. What do you do when you help a new or emerging business?

    A: When consulting with a new business, I always start with a shared vision that has an exit strategy in mind. I also make sure both your personal and corporate goals are well-defined. Remember, two keys to your success are making sure you have a solid business mission and the discipline to implement necessary systems.

    Make certain that planning and systematizing are integrated throughout your…

    Russell Disberger
    Categories: Uncategorized
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