Is Your Small Business Heading in the Right Direction?
In my previous article (CLICK HERE) I mentioned the statistics regarding Small Businesses worldwide. 80% of Small Businesses worldwide does not make it through the first two years of existence. And of the 20% remaining, statistics prove that a further 80% of the remaining 20% will not pass the four-year anniversary mark.
This prompts the questions ‘why do some Small Businesses achieve success, and most Small Businesses fail?’
One of the biggest factors that leads to business failure is a lack of clear direction. Like we learn in the fairy tale ‘Alice in Wonderland’, “If you don’t know where you’re going, any road will take you there.”
Clear direction is a direct result of a clear vision, and vice versa, a lack of direction is due to a lack of vision. A relevant, practical, and clear vision is vital for a business owner to build a successful business. A vision is the equivalent to a blueprint drawn up by architects to build a building. And without this blueprint, the builders will not be able to build the building. Business is more or less the same, without a blueprint it becomes very difficult to progress and build your business. And without a vision for your Business, it is impossible to know if you are heading in the right direction.
What is a Successful Business?
Firstly, I want to address the perception of success. What does it mean to be successful or how does a successful business look like? If you do not understand what success means for you, you will never truly know if you are successful or not. And of all the various definitions of success, I find John Maxwell’s definition the most relevant. He defines success as “knowing your purpose in life, growing to reach your maximum potential, and sowing seeds that benefit others.”
The success test (if you can answer 3/3 you are living a successful life):
- Have you identified your purpose in life, and are you pursuing your purpose daily?
- Are you growing consistently?
- Are you sowing positive seeds in other people’s lives?
With this concept of success, no one can really judge whether you are successful or not. For people do not know how far along you are with these three aspects in your life.
If we apply this definition of success on your Business, you should be able to pinpoint if your Business is successful or not (regardless of your monthly and annual turnover). Don’t get me wrong, money in business is very important, cash is king! However, cash in the bank is only a result of the value your Business offers to the target market, backed up with excellent service.
The important thing about money is that it cannot be forced unless you are corrupt or rob a bank for instant wealth. For the rest of us, we need to focus on adding value to other people’s lives, and in return we will be paid exactly according to the value we offer the target market. Money is also a great indicator of the health of your Business. If you have cash in the bank, you have a healthy business, however if you continually struggle to stay afloat, it might be an indication that something in your Business is sick.
How to move in the Right Direction?
To fix the direction of your Business, you need to re-evaluate and setup a clear vision for your Business. A vision for your Business is critical, it will act as the blueprint which shows a clear method of how your business needs to be built.
Having a clear vision for your Business is not enough though, you need to make a conscious decision to commit to the vision of your Business. The word “decide” comes from the Latin word decidere, which is a combination of two words: de = ‘OFF’ + caedere = ‘CUT’. The word decision or decide literally means “to cut off” in other words, to “kill” the other options.
The result of a clear vision which you have consciously committed yourself to, is discipline. Discipline simply defined is ‘self-imposed standards for the sake of a higher goal’. The wise King Solomon said, “where there is no vision, people cast off restrain” in other words, where there is no clear vision to accomplish a purpose worth working for, people throw off self-discipline. If you struggle with discipline, it might be a combination of not understanding the purpose of your Business, which results in a lack of a clear vision and a failure to commit to your Business.
A vision always consists of three vital parts:
Part #1: Business Purpose.
Part #2: Business Strategy.
Part #3: Business Tactics.
Part #1: Business Purpose
A key component to achieving success and setup the cornerstone of your Business vision is accurately identifying the purpose of your Organisation. Without going into too much detail, an easy way to get to your organisation’s purpose is to ask yourself and your team the following three questions:
- What are we as an organisation passionate about?
- What are our natural strengths?
- What is our value proposition that gets customers to pay?
Value Proposition Meaning: Value proposition refers to the value a business promises to deliver to customers should they choose to buy their product or service. It also refers to the reason why a customer will pay for the value you are offering. Ask yourself, ‘am I selling a nice or a necessity?’
By combining these three questions, you can identify the idea or the purpose behind your Business. And it should be an idea or purpose worth working for.
After you have simplified and clarified your Business purpose, I suggest the following layout to give structure to your purpose:
- Business Idea: In one sentence state the idea of your Business.
- Mission Statement: In one sentence state the mission of your Business.
- End Goal: In one sentence state the end goal of your Business.
- Growth Stages: Divide your Business into three growth stages to break down the elephant into bite size chunks. See my suggestion below:
Stage #1: Launch.
Stage #2: Establish.
Stage #3: Expand.
Part #2: Business Strategy
When the purpose is clear, the second part of your Business vision is the strategy. How will you bring the purpose of your Business to life?
Your Business strategy needs to consist of three building blocks.
- Market Gap / Market Position: What gap have you spotted in the market? And when you target this gap in the market, what do you want your market position to be?
- Unique Selling Proposition: What is your uniqueness when generating leads, converting them into sales and delivering your products / services?
- Value Proposition and Competitive Advantage: Why is the product / service offering a need for your target market and what makes you more competitive than the competition?
Part #3: Business Tactics
The tactical component maps out the step-by-step action, with deadlines you need to implement to roll out the strategy that will establish the purpose of your business in tangible form.
Stage #1: Launch.
Stage #2: Establish.
Stage #3: Expand.
In 2020 we assisted Helen Shongwe Phillips from Pinocchio Creche with her organisation’s vision and direction. Helen’s problem was a lack of vision, which resulted in a blurry direction. Basically, she was stuck in her business. We guided Helen in the direction of a clear vision and how to replace herself with systems for each of her departments. This concept brought a massive shift in her mind, as she freed up her time for more important tasks, such as growing the organisation.
CLICK HERE to see Helen’s testimony on the process of creating a strong foundation for her business.