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9 fundamental elements of a real business

Business owners who have “grown into” their business over time can often overlook some very important steps. They have been so busy building their business and working in their business, the basic business principals are sometimes never addressed.

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Business owners who have “grown into” their business over time can often overlook some very important steps. They have been so busy building their business and working in their business, the basic business principals are sometimes never addressed.

Perhaps your business has evolved almost by accident. When you started out it was just you – self employed for the first time. Before you knew it there were other family members or friends working alongside you, employees, subcontractors etc. If your business has developed like this, you run the risk of not having all the things in place that make for a real business.

This by no means belittles where you’ve got to so far. Many businesses fail within the first 3 years, so if you’ve been in business longer than that – you’ve done a good job. All your hard work and sweat has paid off. If this sounds like you, perhaps it’s time to take stock and go back to the fundamentals of running a real business.

1. Have a Strategic Business Plan
A solid foundation for your business will include a business vision and a strategic business plan. This will provide the essence of everything you need for a sound business strategy. It will also mean you are able to make good strategic decisions, not just tactical knee-jerk decisions.

2. Establish clear goals & get team buy-in
You’ll also want your business to have specific goals and objectives. You’ll need to ensure you get buy-in from your team if your business is to be truly successful. So make sure your whole team knows about them and can align with them.

3. Make sure leadership is present
Every business needs a leader – someone who takes “ownership” of the business as a hole. A leader will “walk the talk”, recognise great effort and create a “team” out of a bunch of employees (which in turn will generate the buy-in we just talked about.)

4. Establish systems & procedures
Develop systems and procedures to both safeguard and improve your business, and document these. This ensures everything has a process that can be easily followed. It’s a valuable asset in any business, and will provide added value when the time comes to sell your business.

5. Get your cashflow sorted
Make sure you have a cash flow system that forecasts weeks in advance (ideally around 7 weeks in advance). In this way you can seem any bumps in the road before you reach them, and you’ll be able to address it in advance. This will go a long way to creating “cashflow certainty” and eliminating any nasty surprises.

6. Customers paying on time
Get tough about your customers paying on time. It can be easy to let emotions come into play when someone gives you their sad story. It’s important you have a clear policy or procedure to follow. Being a business owner sometimes means making hard decisions. Get your customers paying on time – every time, and clean up any long-standing debts.

7. Pay your bills
It’s hard to get tough with your debtors if you’re slack in this department as well. Make sure you pay your own bills on time. If you know you’re going to be late paying an invoice – let them know in advance and make sure you agree on a date by which you will pay them.

8. Hire advisors that enhance your business
Your professional advisors should add to what your business is up to, not confuse and detract. Persevere until you find advisors that fit with your business, that understand you and your business and can communicate in language that you understand.

9. Seek to be the top of your game
Always look for the edge and new ways to improve what your business does. Act with the utmost concentration, on purpose and not by happenstance.

If you can master, or at least be a student, of these 9 things, you’ll be well on the way to having a business that will not only provide you with the lifestyle needs you want, it will also create an asset for the future, so that you can reap the ultimate rewards of all your hard work

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