In the past 30 years as a practicing CPA, I’ve been incredibly blessed to see the inner workings, processes, and people in many successful and varied small and mid-sized businesses. The personal relationships developed during that time, both with my clients and my team members, have been extremely valuable in cultivating a business framework, which I try to apply to our own CPA firm. I’ve been in a unique position to see businesses thrive and unfortunately have seen several not succeed or not reach their fullest potential. In each case, after the work is done and I have time for reflection, I’m able to connect the dots and find certain common traits in the most successful ones. Over the years, I’ve developed a higher level point of view and a keen interest in what makes a great business tick.
Running a business requires a high quality product or service, a willing market for that product or service, and some competitive advantage others can’t offer. It also requires the technological, industrial or mechanical means to produce the product or service. But there’s a lot more to it. Many businesses with all of the above still don’t succeed. I always find myself wondering….”what could the business owner have done better?”
The following are a few common denominators I’ve noticed thus far in my career, that set a business on a path to success. I’ve seen these traits work in most any type of business or industry or geographical market.
Spend the time to find the best team members
In most businesses I’ve been involved with, EVERYTHING begins with the right TEAM. Truthfully, this article could be entirely about assembling the proper team. Time and time again, I’ve seen businesses not achieve favorable results, because they didn’t have the right people on the bus. Sometimes, bad hiring decisions are made due to a bustling job market and low unemployment. Good team fits aren’t available in the market, and a less-than-perfect hire often seems unavoidable. However, I’ve found other factors are more often in play. These factors include attempting to save a few dollars by hiring less-than-qualified personnel. Or not taking the time necessary to make an important hiring decision that could mean the difference between success and failure. I’ve found those who succeed are deliberate and patient in hiring, and willing to wait for the right fit.
Challenge, and then EMPOWER, your team to perform advanced roles each year
Today’s team member doesn’t want to be stagnant. And why would you want them to be! You want a constant acceptance of advanced responsibilities throughout your business. A constant ascension of challenging job duties can create a contagious momentum that will become the engine to drive your organization. To clarify, you’re not asking your team to work harder, by layering on increased duties to an already-jammed schedule. You’re replacing duties that can be delegated to others, to hopefully achieve a highest-and-best-use platform for your team.
Develop the most pleasant, positive work culture possible
So you’ve been deliberate in hiring, and have patiently assembled a talented team to run your organization. This investment into your business has cost time and money. Further, you’ve empowered your team to grow into more advanced roles that challenge them and help take pressure off you as the business owner. This allows you to focus ON your business and its growth.
Now, the last thing you want is to lose them due to some factor you could’ve avoided. People change jobs all the time for a variety of reasons, many of which are unavoidable. This seems even more true in today’s tight labor market and with various generational changes in the workforce dynamic.
Time and time again, I’ve seen businesses thrive due to work culture and high retention rates. This has been true in a diverse array of industries. At the same time, I’ve seen others employ the “revolving door” mentality, and thus either fail, or not reach their fullest potential. That last group has made a decision that they’re okay with churning their team. But they are forever handcuffed as a business because of it.
Today’s workforce demands a positive and challenging environment, that fosters career growth and advancement. They need open, collaborative workplaces where their valuable input is heard and addressed. And they rightfully expect to be rewarded on a level commensurate with their contributions.
And here’s a secret…..this is all good for your business! It’s not a bad thing. Embrace a positive work culture by listening to everyone, keeping an open door and an open mind, and being flexible with parental and other life demands. Your business will thrive in return!
Annual business process evaluations, with end customer always in mind
Every business has processes. For a manufacturer, it could be the methods by which raw materials are developed into end products. For a brick mason, it might be the way a particular construction project is estimated and bid. For service industry personnel, it could be the method by which a new customer is brought into the business. Or perhaps it’s scheduling the wait staff at a restaurant.
In a rapidly changing and competitive landscape, it’s critical that all processes are evaluated constantly, with a keen eye on the end user….the customer! So many businesses get lost in the weeds of process development. They over-complicate everything, which costs time and money, drives today’s workforce bonkers, and worst of all, doesn’t consider the value to the end user customer. A great example is a medical practice with too much repetitive paperwork, which frustrates patients and requires expensive staff time to input. (Fresh on my mind, as I visited a doctor earlier this week!)
Or conversely, they are lax in process development, and miss critical steps that are important to the customer or business. For example, a commercial contractor may do work for a customer before getting a properly agreed-upon and signed work contract or change order in place. A manufacturer can miss a production step that severely hampers final product quality. The end results can simply kill the business.
Don’t waste time with ancillary processes that have no end-user benefit. And don’t skip critical steps that can detract from product or service quality and ultimately hold you back. In most cases, you can’t accomplish this result in a rapidly-changing technological and labor environment, without a timely and consistent evaluation of the overall business processes.
Be cognizant of revenue concentrations
Many wonderful local businesses have failed, even though they had the right team, product and process, at they had it at the right time. They’ve failed because they didn’t consider the possible impact of having all their business tied up with one or two customers, industries or product suppliers. Today’s businesses come and go. Diversity of customer and supplier is important, to provide shelter from an unexpected closing or sale of a business or market lapse. I’ve seen insurance brokers fail because they only sold policies from one company which eventually lost its rating. Probably thousands of construction companies have failed because they specialized only in certain box retail chains, which eventually went the way of online shopping. Similar stories exist for manufacturers and other industries.
Successful and lasting businesses are generally diversified in their customer base, and not dependent on the success of one or two customers or suppliers or other factors outside of their control.
No matter what, always take the necessary time to work ON your business, instead of in it
As owners and managers of businesses, we all get lost in the weeds much of the time. The day-to-day process of meeting a customer or client demand sucks 110% of our time, and before we know it, six months have gone by. Sometimes, we simply get complacent. After all, we’re making payroll and keeping the lights on. All is good! But we’ll never achieve our greatest potential if we don’t take time to step away, and take a higher level view of the entire business and customer experience.
Our competitors are doing that very thing. Shouldn’t we all?
When failure happens, and it will, learn from it
Running a business takes a certain amount of risk tolerance. You have to be decisive at times and make important decisions that could jeopardize particular relationships or cause short-term losses if not handled properly. As an owner, you have to ask yourself, “Am I willing to live with the consequences of my action?” Sometimes, things simply won’t go as planned, and you will find yourself forced to live with unexpected and undesirable results.
When picking up the pieces from a decision gone wrong, there is always an important takeaway. Learn from it! Don’t let it stop you from making other critical decisions, because another will be necessary just around the corner. But take what you learned, and apply it the next time. Each failure comes with an important lesson that can be applied in the future.
Always maintain your integrity
In the careers of business owners, there will come times where critical decisions need to be made that test one’s integrity. It may be letting certain products roll off the assembly line that, due to factors outside your control, had to be made with subpar raw materials to meet an order delivery date. It could be a construction project that cuts corners in such a way that the job will be over and collected before it’s discovered.
In times such as these that test your integrity, always take the course of maintaining it at the highest possible level. Your business and more importantly, your final legacy, will always be stronger because of it. The most successful businesses I’ve worked with, have learned this lesson long ago.
Do what you say you’re going to do
This could be the greatest common denominator of all in running a successful business. This mantra applies to business owners dealing with customers, suppliers and most of all, their team. If you promise a key team member an opportunity, stand behind it. If you promise your customer you’ll meet a time-sensitive deadline, then do what it takes to meet it. Otherwise, don’t say it in the first place! It sounds easy enough, but this simple philosophy gets lost in times of duress.
Give back to great causes. It will come back to you in spades
As I’ve advanced through my own career and developed close relationships with a variety of business owners, I’ve observed this common trait in most of them. Without being involved in the industry I’m in, I probably wouldn’t have necessarily expected or noticed it.
Most successful businesses I’ve come in contact with, have a mindset of giving back their time and treasure to worthy causes that are meaningful to them. The correlation of business success and giving back, is just uncanny to me! Simply supporting great causes never goes out of style, and it generally comes back to great businesses in terms of overall business reputation.
In order to succeed, every business has to have a quality product or service that meets today’s rigid customer demands. And every business has to have some sort of plan in place, that paints a picture of what it will mean to be a success. These must be in place as a business idea is first hatched. But to make it thrive, and to achieve its fullest potential, the common traits above have been proven many times over to exemplify long-term business stability.