As business owners it is incredibly easy for us to get bogged down in the day-to-day of running a business. However, this short-term view leaves us fire-fighting, instead of growing a business.
Great entrepreneurs should focus on four main areas when it comes to approaching and developing businesses. These focus points will pull you out of the day-to-day and enable you to start building a truly great company.
Focus #1: Vision
It is your primary job as the business owner to set the vision and direction of the company. Many business owners shy away from setting a clear vision for the business by using this excuse: “I’d just be guessing, I don’t know what’s going to happen in the future.”
In my experience, the bigger the vision you have for the business, the harder people will work for you and work with you, be it staff, partners, investors or board members.
Set a 1-year, 2-year and 5-year vision for your business. Make it compelling. Make it bold. Then make sure you talk about it every day.
Focus #2: Sales Target
Your vision may include both financial goals and non-financial goals. However once the financial goal has been set, break that Year 1 goal down into how many sales need to be made for that year, each quarter, each month, each week and each day.
This ensures you, your staff and anyone else involved in the business know exactly what needs to be achieved on a daily basis in order to achieve your Year 1 Vision.
Focus #3: Business Operations
Once you’ve set the sales targets in place, what does the organisation need to look like in order to make these sales and deliver?
Examine these three things:
- Your organisational chart
How is the organisation set up? Do you need to bring on extra business development, operations or admin staff in order to hit and deliver your sales targets?
- Position descriptions
Everyone in the organisation needs a very clear and detailed job description that communicates to them and everyone else in the organisation, what role they play on the team.
What sort of systems need to be in place in order to deliver this volume of sales?
Focus #4: Finance
Once you have set the vision, determined the sales that need to be achieved, and worked out what staff base you need to deliver on these objectives, all of that information needs to go into a 12-month budget. Most early stage businesses don’t need a full-time CFO, therefore you can engage one on a casual basis for an hourly rate.
This 12-month forecast will include all projected revenues, cost of goods and the expenses of running the business (including any additions to the staff base), and will provide you with a financial scoreboard that needs to accompany any business decision going forward. The budgeted numbers also need to be consistent with the financial goals you’ve outlined in your vision. If they don’t, then something’s got to give.
If you, as the captain of your ship, can commit to all of the above, not only does it make you a more effective entrepreneur, it will make you an incredibly effective leader for everyone who comes into contact with your business.
This article was written by, Jack Delosa the founder of The Entourage, Australia’s largest educator and community of entrepreneurs under 40.