A Key Element to Keep You Out of The Startup Failure Club
Whatever else you do, don’t leave this out of your business plan.
According to recent reports, there have been more than 500,000 applications for an employer identification number in the U.S. since mid-March 2020, and in the UK, new business startups were just short of 90,000 registrations in quarter 2.
Small businesses employ more than half of working-age Americans and create nearly two-thirds of new jobs in the U.S. each year, according to the Small Business Administration. (Maneet Ahuja in Forbes)
So despite all the bad news and negative stats about small business failure, and some of the worst conditions that most of us have ever experienced, entrepreneurship is alive and kicking, and refusing to lay down!
Which is great news!
Great news for everyone, because the small business will have more than a supporting role in the world’s economic recovery.
The European Investment Banks’, Allar Tankler, writes:
“…… they (SME’s) are the backbone of the European real economy. Just to give a few numbers, they account for roughly two-thirds of overall employment, and they contribute more than 55% of the overall value-added in the non-financial business economy. So clearly, supporting the survival of SMEs is crucial for mitigating the economic systemic impact, but also to sustain employment and to create the conditions needed for future growth, once the pandemic is over.”
Strong words, but let’s be honest, building a successful small business is not for the faint-hearted. It requires a healthy spirit of endeavour, massive helpings of determination, and shedloads of hard work.
Even then, it can result in crashed dreams, heartache and pain!
It’s tough, right?
But on the other hand, nothing can compare to the rewards we get when we are successful.
Most small businesses start as micro-businesses or solo entrepreneurship.
This incubator stage is a juggling nightmare for most, where one person needs the work equivalent of a board of directors. As if that isn’t hard enough, most entrepreneurs start without the benefit of specific training and knowledge in as much as 75%, or more, of the skills needed!
The cornerstones of every business plan are four fundamental elements: Marketing, Sales, Fulfilment and Finance. Short for; finding prospects, turning them into customers, delivering the product or service and collecting payment.
All this while balancing the daily machinations of the world around us!
It needs a lot of specialized knowledge right? Challenge is, not many of us have such a wide skill set or experience, or even the time to keep all those plates spinning.
It’s like a 3d puzzle with a mountain of pieces to fit together, and it’s no small challenge. So often, just as we begin to see the picture, the puzzle gets knocked over, and we have to start again!
So, it’s no small wonder that even when we correctly plan our businesses, something is always missing.
So, what is missing?
Like any puzzle, if we don’t have all the pieces, we never get to see the full picture.
As much as we may set out our strategies for the standard four elements, most of us miss the most powerful - the fifth element.
The fifth element is the most powerful! The link that holds the rest together and makes them work. It’s the answer to every challenge we ever face.
The fifth element is people!
Think about it! People are involved in every area of a business; as staff and employees, customers and clients, suppliers and contractors. Our ability to communicate with them, influence them and fully engage them, determines our success, absolutely!
Of course, you know how vitally important people are to the success of your business. After all, they take up a massive amount of your time, don't they?
But is that for the wrong reasons? For many business leaders, people are one of their biggest challenges and hindrances. Only a few really understand how to create powerful people strategies and leverage them for success
For example, many leaders have a constant fight to find and keep reliable and effective staff and attract and keep, quality, high-value customers. The two most vital business objectives and powerful elements of success.
So, here’s a question? Are people simply something that is part of your day to day business problems, or do you have an intentional, programmed strategy for maximising success with them?
A strategy that is constantly monitored, measured and fine-tuned.
A strategy that is in tune with this understanding;
You can buy people’s time, but you have to win their hearts and minds.
Because if not, it’s impossible to build and operate a business that reaches full potential!
A successful business is a combination of successful activities, completed by successful people.
Successful people take responsibility for their results and understand how they impact the success of the business.
A team of successful people takes responsibility for the success of the business and takes pride in its success.
With such a team, a business is a pleasure to lead and has the power for long term success. But such a team doesn’t simply arrive at your door. You have to find, build, and develop it!
As business leaders, this is our most important mission.
We need the correct people in the correct positions, motivated and engaged to get the best results. Then we need to measure their performance and results against agreed and understandable processes and targets, and we need to ensure they achieve success.
So, the first job is to recruit the correct people. We need to set out specific recruitment activities together with processes for maintaining staff engagement and efficiencies.
The process can be separated into a series of measurable stages, each a key performance indicator:
- Recruitment activity
- Response management
- Ongoing training
- Performance targets
- Retention levels
The information gained in each stage helps us to monitor success and improve areas that are falling short.
Each stage of the recruitment process will produce valuable information that can be fine-tuned to impact the overall result. When we fail to find and keep the best staff, we must look for the reasons within our people strategies.
It’s no good blaming your location, the competition, or any reason that we can’t influence and rectify.
Are we using the correct activity? How many responses do we generate?
How many responders are booked for interviews, and how many arrived?
What is the quality of people interviewed?
Analysing each stage will indicate points of failure which can be studied in detail and perfected.
Just one wrong ingredient will ruin a cake!
Imagine a chef trying to create a dish without following a recipe?
Without the recipe, the chef is flying blind! If the dish turns out bad he won't know why. Any changes he makes are hit and miss and unless measured, recorded and adjusted against a plan, he will be unable to perfect the dish.
Without a people strategy and results measurement (our recipe), we are also flying blind! We know that we are failing to get the results we need, but we don’t know why.
As Peter Drucker famously said, “What gets measured gets done.”
People are involved in every area of a business; as staff and employees, customers and clients, suppliers, and contractors. Our ability to communicate with them, to engage and influence them, absolutely determines our success!
Measuring the performance of our people gives us detailed knowledge and the opportunity to analyse the activities leading to the results.
Setting out guidelines and targets, agreeing on these with our people, and helping them achieve individual success will lead to the overall success of the business.
We cannot leave this most powerful strategy to chance.
We must set our people strategies to create a highly effective, dedicated team and exceedingly satisfied and loyal customers.
Highly effective people are the sure-fire way to create a successful business, one that is a pleasure to own and produces maximum profits.
“Look after your people and they will look after your business”.
Don’t forget, you can get my coaching help with Sales Leadership challenges with a FREE discovery call here; Call Will Free (subject to availability). (Be sure to ask about my subscriber discounts.)
Got any feedback or comments, I’d love to hear them. You can drop me a line; [email protected].
If you like reading about communication and people skills, catch my Medium.com publication; Youmeus
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