Doomed from the start. If you’re an entrepreneur or an entrepreneur-hopeful, it’s probably difficult to keep those four words from causing you to second guess your every move as you plan and run your business. They become especially hard to ignore when you consider the fact that less than 30% of businesses last more than 10 years, and most failures happen within the first few years of operation. The truth is, many things could go wrong: an ill-conceived business idea, poor planning, lack of capital, ineffective leadership, and more. In the high-stakes world of running a business, those are the facts.
But there are other important facts about business ownership. They are facts that could help you avoid the mistakes and pitfalls that trip up so many others, and go on to achieve the success you’ve dreamed of. I call them the “Facts of Business Life.” I discuss these in a book by the same name.
Best of all, the Facts of Business Life make it clear when each fact should be implemented and how each should be implemented on each level. (Make no mistake—while the facts will always remain the same, their application will change as your business grows and matures!)
If you’re ready to build a strong, lasting foundation for your business, read on for an overview of my tried-and-true seven Facts of Business Life:
Fact 1: If you don’t lead, no one will follow. At first, this statement seems mind-numbingly obvious. But often, “leadership” is one of those words that is thrown around by people who haven’t given much thought to what it looks like in action. Good business leadership begins with defining the destination and direction of your company and deciding how the business should look and operate when it arrives; but it doesn’t stop there. It also involves developing and continuously improving on a set of skills in order to move your business from where it is today to where you want it to be tomorrow.
Fact 2: If you don’t control it, you don’t own it. Control is the owner’s management reality. If you don’t control your company by defining key tasks and dictating how they must be handled, and “inspect what you expect,” then you don’t truly “own” the business because all you are is a spectator watching others play with your money.
Fact 3: Protecting your company’s assets should be your first priority. Were you surprised because this fact didn’t instruct you to first protect your company’s sales, profits, and growth? If so, you’re not alone. But the truth is, assets—which include both tangible and intangible assets—are what power sales, profits, and growth.
Ignore this business fact and your company will underperform—if it can even survive the continual asset write-offs and write-downs, customer abandonment, and employee indifference. I believe protecting both tangible and intangible assets to be one of the most underrated and underappreciated ownership issues today, and, if mismanaged, can be one of the most damaging. The key is to understand what all of your company’s assets are, and then guard them closely and work to maximize the profits they represent. Because if you don’t, they will haunt your business and cause financial pain when you least expect it, or want it.
Fact 4: Planning is about preparing for the future, not predicting it. Nobody knows what tomorrow, next week, or next year will bring for your business. However, you can make educated guesses based on the most current, accurate information available as well as your own past experiences, and this should be an ongoing process. Effective planning is a mix of science (gathering pertinent information) and art (taking that information and turning it into a plan that will move your business from “here” to “there” over a specific time period).
Fact 5: If you don’t market your business, you won’t have one. Maybe working to market and advertise your product isn’t your cup of tea. Or maybe you believe your product is so great that it should speak for itself. If so, too bad—you’re going to have to do it anyway. The bottom line is, if people don’t know about your product, you won’t be successful.
Fact 6:: The marketplace is a war zone. Every company has competitors, and if it doesn’t and it’s successful, it soon will. Successful owners know they have to fight not only to win market share but to retain it as well. That’s why I insist that you must develop a warrior mentality and maintain it for as long as you’re at the head of your business.
Selling and sales in any industry is serious business. It’s take or be taken from. In other words, in order to be successful and remain that way, you have to continually focus on the market, react to it, and fight for what you believe should be yours.
Fact 7: You don’t just have to know the business you’re in; you have to know business. Yes, of course you need to know the inner workings and nuances of your particular industry if you want to be successful; but you also need to understand the various aspects of business as it is more broadly defined, such as accounting, finance, business law, personnel issues, and more, and how all of these impact each other and the decisions you make.
Ultimately, I don’t believe that any entrepreneur can succeed—or at least reach his or her full potential—without knowing, understanding, and applying these seven Facts of Business Life. It’s equally important to understand how these facts are interrelated.
For instance, being able to develop strategic plans or market your product will mean little if you don’t have a good grasp of business in general. But I promise, if you commit yourself to understanding these facts while being prepared for their implementation to change as your business goes through its inevitable life cycle, you’ll be creating a best-odds scenario for success.