Think about what it means to do something on purpose.
You put some thought in, make a plan to achieve a particular goal, and, if you stick with it, likely make progress and/or achieve success. As such, there are things that you should do on purpose to make progress as a business owner.
1. Write down the why of your business.
Write it down. It’s not enough to “know it” in your mind. You need to commit to it and make sure it is clear and succinct. (I’d even say post it on a wall for a period of time so that you are reminded daily.) The why is the purpose of your business. There are so many ebbs and flows during a typical business journey, and there will be times when it will be uber challenging. Don’t lose focus; during these times, you want to get back to your why.
2. Have a conversation with those around you.
It’s not enough to simply make the decision to go into business for yourself. You need to have the blessings of your children, partner, spouse, or any other family members or friends who are living with and around you. Challenging times will inevitably arise, and if you’ll want their support when they do, ensure they are willing to take this risk with you.
At the very least, they’ll be forewarned as to why your time is being spent the way it is, why resources are being re-directed, and why your energy level will vary, sometimes dramatically.
3. Consider the end goal.
From the beginning, business owners need to clearly determine and understand their end goal. How are you envisioning the future of your business? Do you intend for your social enterprise to persist once you’re no longer operating it? Is it something you want to grow until you can sell it?
There are several exit strategies for a business; you need to know which you’re planning on up front so you can mitigate barriers down the road.
For example, you’ll need to scale the business in a certain way if you intend to sell it, and you’ll manage cash differently if equity will be offered rather than the business remaining a lifestyle business (individually owned and operated, and when you’re done, it’ll be done too).
4. Have a strategy.
Many times failure is due to a lack of strategy. Strategy allows one to generate insights to create an innovative business model that will bring value to customers.
First, goals are determined and then objectives are created to meet the goals; strategy explains how the goals and objectives will be met and tactics are listed to execute on the strategy.
Many business owners live in the Land of Tactics, creating exhaustive to-do lists and ticking off tasks as they are completed. This is one of the primary reasons businesses don’t progress the way they intend. If you are like me and only dream in detail (i.e. can’t see the big picture), consider enlisting professional help — a business consultant or mentor.
5. Measure and manage your money.
Purposeful financial management of a business means planning and managing in such a way as to consider everything that factors into profitability. We tend to think that profit is that simple formula income minus expense. This is misleading as it doesn’t reflect true profit.
A profitable business starts with an owner who has not only covered all business expenses but also their personal living expenses (taking a reasonable salary). They pay all taxes on time, don’t carry a lot of debt, and have proper insurances in place. In addition, they invest consistently in a retirement plan.
A truly profitable business covers all this, and when there’s at least one penny left over, the business is indeed profitable. To achieve this, the business owner must measure and manage cash flow regularly.
Tough and deliberate decisions need to be made around spending, including timing and allocations. Then, if managed right, the business will be positioned to leverage future opportunities and ultimately execute its exit strategy.
Remember: purpose determines progress. If you purposefully consider and aim to accomplish these five actions, you’ll undoubtedly move toward success as a business owner.
Photo by Gaelle Marcel on Unsplash