Working In and On the Business, the Equation of Success

Contrary to popular opinion, it isn’t the product or service a company creates or delivers that makes the difference in the success or failure of a business.   It isn’t the most exciting, newest, or most innovative concept – even a revolutionary one – that generates the largest bottom-line.  In most instances, it is the determination and work ethic – the effort the founders, owners, and employees put into the business – that makes a business stand out from the rest and generate substantial bottom-line results.

In the concept stage of the business, before the doors open and substantial money is invested in setting up the actual operations (or before any operations are begun), this translates into developing  a robust plan to get the business going.  It means making the business the top priority ahead of other things for the immediate and near term.  Often it means making sacrifices of things that would normally be given top priority – vacations, home improvements, community service, etc.

If as a person considering starting a business, you aren’t prepared to put on hold the other activities in your life during the initialization and start-up phase, then this may not be the time to start your business.  Alternatively, if you are starting a business and have “deep pockets”, meaning money to invest in getting other people to work for you and do the necessary tasks and accomplish the priorities, you may still want to take on a new business.

Starting a business is somewhat of an equation where the factors include: time (calendar and sweat equity), money, experience, expertise, concept, and market demand.  How quickly you can get a business up and running is a function of time and money.  If you are short on money, it will take an investment of more time in both days and in sweat equity – primarily your time, because without money, you will have a limited ability to get other people to work in or on your business.

One of the factors for getting loans and other financing is often how much business experience and expertise you or members of your team bring to the process of running the business.  The business expertise they look for is broad based – not just one functional area, say sales or marketing or product development.  When determining your timeline for getting the business going and evaluating possible funding sources, remember that a demonstrated successful track record in getting businesses started and generating revenues and profit are going to be factors to the equation of accessing money beyond what you can provide.

So many times businesses are built around exciting concepts and innovations.  Those “products” are fantastic differentiators from other offerings.  However, they need to be backed up by sound business processes, systems, and proof of concept and longevity.  You may be successful in getting early adopters or entities (people or companies) that are willing to gamble on the “new” aspect just to be first to do something.  Most of the time the long term success of the business is to prove the “product” and mainstream it with the larger markets.  Mainstreaming your business, proving the larger commercial appeal, requires that the stability and reliability of the business be demonstrated – quality, service, delivery, etc. – the after-the-sale items are as critical, if not more critical, to the broader market.

There are two plans that are essential to a new business, especially if the proposed business is complex and/or based on new technology or innovations:
1.    the plan for how you will work on the business
2.    the plan for what the business is, does, operates, and the financial results expected.

The first plan lays out the “what” that you will be doing, contributing, and your priorities as a person.  The second defines the business, what it will take, and what will result from operations.

The plans may be formal or informal, written or unwritten.  The point is to KNOW what it is going to take and decide if the sacrifices and changes that you need to make are ones that you are willing to make.  Starting a business is relatively easy – some paperwork, etc.  Working in and on a business from beginning to financial success isn’t easy – it takes dedication, resources, and a willingness to infuse the business with time, money, and sweat equity.

So, are you ready to work in and on a business of your own?

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