It’s Your Business
- Subject: Facts of business that affect entrepreneurs
- Essential Reading: Shop Owner, Center Manager
- Author: Terry Greenhut, Transmission Digest Business Editor
Just as there are facts of life that affect us personally, there are facts of business that affect us as entrepreneurs. Learning to avoid common mistakes that so many others have made can help you steer your company in the direction you want it to go and keep it viable no matter what changes there may be to economic conditions.
If you’re an entrepreneur who now owns an automotive business or you have plans to be one, it’s probably difficult to keep from second-guessing your every move as you plan and run your business. There is always the fear looming in the background that yours could be one of the 70% that don’t make it through the first 10 years of their existence. Most failures, however, happen within the first few years of operation. The truth is, many things could go wrong: an ill-conceived business idea, poor planning, lack of capital, ineffective leadership, a lack of understanding of the type of business you’re in and what it requires of you on a daily basis, failure to conceive and carry out a strong and ongoing marketing plan, failure to learn and employ good sales techniques, downright laziness and lots more. In the high-stakes world of running a business, those are some of the more-common pitfalls.
There are, fortunately, seven facts that you can learn and use continually. These facts could help you avoid the mistakes that trip up so many others and go on to achieve your ultimate success.
Of course, there are a variety of skills owners need to know to make a business work – skills such as dealing effectively with customers, suppliers and employees; basic accounting; marketing; and, at the top of the list, selling, because it’s something you do every day, in one way or another, and if you can’t do it well you shouldn’t expect to succeed in any business.
We realize that there are no guarantees for entrepreneurs, and to add to the challenge, each business – even if it provides similar services – is one of a kind in terms of how it competes, what its constraints are and how it operates. But what you can do is tilt the odds of long-term growth and prosperity in your favor.
If you’re ready to build a strong, lasting foundation for your business, then check out the following seven facts:
Fact 1
If you don’t lead, no one will follow. At first, this statement seems mind-numbingly obvious, but often “leadership” is one of those words that is thrown around by people who haven’t given much thought to what it looks like in action. Good business leadership begins with defining the destination and direction of your company and deciding how the business should look and operate when it arrives. But it doesn’t stop there. It also involves developing and continuously improving on a set of skills to move your business from where it is today to where you want it to be tomorrow.
What’s important to understand is that without effective leadership your managers or employees have no idea what is important to the owner, what to manage or what success and failure look like. In other words, to have effective employees, your business first has to have effective leadership, which has to include defining success and failure on the basis of the eventual destination. Another important aspect of being a good leader is developing a company culture that’s expectations-based and rewards those who meet and exceed those expectations. Although it’s a major and long-term commitment, the good news about leadership is that the most-important aspects can be learned, and it’s essential that owners do so.
Fact 2
If you don’t control it, you don’t own it. Control is the owner’s management reality. If you don’t control your company by defining key tasks and dictating how they must be handled – and “inspect what you expect” – then you don’t truly “own” the business because all you are is a spectator watching others play with your money.
There are two overriding concepts that successful owners understand over their unsuccessful competitors: First, great procedures and processes need controls, and these in turn create great employees. This happens because procedures and processes operate the business, and employees operate the processes. So your responsibility is to create and oversee them while your employees carry them out. Second, don’t stop at pointing out what should be done and how. Also clearly state and emphasize that there will be rewards or consequences when standard operating procedures and processes are or are not followed. If you don’t do this, you’ll be leading a group of individuals who follow their own rules and judgment rather than a cohesive company working toward a common goal. Once more, this is one of those business basics owners can’t ignore.
Fact 3
Protecting your company’s assets should be your first priority. Were you surprised that this fact didn’t instruct you to first protect your company’s sales, profits and growth? If so, you’re not alone. But the truth is, assets – which include both tangible and intangible assets –are what power sales, profits and growth.
Usually, owners and soon-to-be owners understand the need for insurance on assets like their buildings and equipment. In fact, bankers insist on insuring specific assets on which they lend money, such as facilities and equipment, and sometimes even insurance on an owner’s life. However, successful owners don’t stop at protecting obvious assets. They understand the importance of every asset, because assets represent invested cash, which should be managed to produce exceptional and maximized profits. The key is to understand what all of your company’s assets are. The tangible ones you can see, touch and insure. The intangible ones like your customers and employees need to be continually cared for and developed so they can maximize the profits they represent.
Fact 4
Planning is about preparing for the future, not predicting it. Nobody knows what tomorrow, next week or next year will bring for your business. But you can make educated guesses based on the most-current, accurate information available as well as your own experiences, and this should be an ongoing process.
Being able to plan better than your competitors can give you a significant competitive edge in the market. Ford Motor Co. is a great example. In 2008 and 2009, its competitors, GM and Chrysler, ran out of cash and needed taxpayer bailouts to avoid bankruptcy, but not Ford. Years prior to the credit crunch, Ford began to restructure its debt and raised billions as it continually added to cash reserves. Was this luck or good planning? Industry insiders will say good planning. The point is Ford knew, as you should, that planning is important because it focuses owners on what’s important and prepares them for what lies ahead.
Fact 5
If you don’t market your business, you won’t have one. Maybe working to market and advertise your service isn’t your cup of tea. Or maybe you believe it’s so great that it should speak for itself. If so, too bad – you’re going to have to do it anyway. The bottom line is, if people don’t know about your service, no matter how good it is, you won’t be successful.
New business owners especially are nervous about marketing because money is already so tight at this stage. But again, if marketing isn’t done, very little good will happen. You have to make the necessary effort to connect consumers to your company, and when you do you’ll begin to see marketing as the investment it actually is, rather than the expense that less-successful competitors think it is.
Fact 6
The marketplace is a war zone. Every company has competitors, and if it doesn’t and it’s successful, it soon will. Successful owners know they have to fight not only to win market share but also to retain it. You must develop a warrior mentality and maintain it for as long as you’re running your business. The downfall of so many formerly successful businesses, especially in the automotive trades, is that at some point they slowed down or stopped doing the marketing that got them there in the first place. They decided it was no longer necessary to spend all that time, money and effort. Then the marketplace decided that their business no longer needed to exist.
Fact 7
If you don’t learn how to sell it, there’s no point in producing it. Marketing can only get customers to your door. It can’t get them inside and it can’t sell the work for you. If you want success now and for as long as you want to be in business, you and your employees need to sell your little hearts out whenever you are given the opportunity. That means all day, every day. You have to be able to talk them into the shop without quoting “take it or leave it” prices and sell them what they need profitably every time.
These seven facts are not nearly all you need to know, but it’s hard to believe that any entrepreneur can reach his or her full potential without knowing, understanding and applying them.
Terry Greenhut, Transmission Digest Business Editor. Visit www.TerryGreenhut.com.
