Part 1. Learn the Foundations for Building a Thriving, Profitable Business
To build a thriving, profitable business you have to get out of the day-to-day grind of little tasks and start focusing on what matters. So what matters? There are 4 Pillars to successful business management: Marketing/Sales, Management, Financials, and Planning. Let’s review each.
Marketing/ Sales: Cash flow is King so business owners need to ensure that the marketing is bringing in a steady flow of customers/clients/patients who are ready to buy. Then you need to make sure there is a good system for making sure each “Sale” reaches completion (i.e. the person is now paying you money, not just promising someday to pay). This category means getting clear on how much you need to sell to hit your goals and then build a marketing plan that works for those goals and to truly connect with the audience you want to connect with.
Management: To run a successful business and free yourself from the daily grind, you need to build a support system through team and technology. Software and other tech can be instrumental in streamlining processes and workload, but most often you still need a team to run the systems. This means building a plan for surrounding yourself with a great team both internally and externally through vendors and outside consultants. For many people, the “staffing” is difficult because they don’t know who to hire the right people, train them and build up the culture in the firm so the team thrives. (no judgment zone: when I got out of law school I didn’t know how to do any of this either. I went through 23 hires and fires while building my business but when I sold my interest I had an incredible A+Team!) This category also includes managing the office space, computers, and phones.
Financials: Let’s face it, the money will flow out the door just as fast as in the door if you don’t pay attention to your numbers! Bottom line: Profitable Owners are Good Money Managers! It’s true. Profitable Owners Know their Numbers. They know what money is coming in and where their hard-earned money is going out the door. It is important to use a variety of metrics to tell the objective story of what is going on in your firm by the use of both lag metrics (metrics that tell you what has happened in the past, such as sales numbers, P&L, etc.), and lead metrics (projected numbers based on marketing plan with hypothesis on estimated conversion rates). Often, financials can be intimidating, which is why it is so crucial to surround yourself with successful people who have been there.
Planning: For most entrepreneurs, the short-term goal is all about cash flow and creating some stability, so you can breathe. It is exhausting to be doing everything, and yet there never seems to be enough time or money to do what you need to do. It is important to create a game plan that will help you with that short term need while also staying cognizant of the longer-term desire for profitability and more time for yourself/your family. Finally, one must consider the end goal so that what you are building is consistent with your long, long-term goals. Do you wish to grow and scale? What is your exit plan? Do you want to build and sell? These long-term goals are important because the way you build the business today can directly impact those opportunities for the future.
In the next post, we will dive into Part 2: Finding Your Balance and tools to get you there!
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