Long-term business success is a product of strategic planning and implementation. Without these essential building blocks, the foundation of any business will be weak.
Creating a successful business is a lot like building a house. Just like with homes, the foundation of your business can determine its long-term stability and profitability. If the foundation of your business is not properly laid, then the whole structure may not hold for long.
The lack of a well-outlined structure is a significant reason businesses fail. According to data from the Labor Statistics, about 20 percent of Startup Businesses fail in the first year. Thirty percent fail in the second year, while about 50% fail in the fifth year.
Startup Business typically enjoys a boom within the first few years. However, without the proper structures, the business will eventually develop cracks, which will expand into more significant issues that may affect your marketing efforts, cash flow, and subsequently lead to a breakdown.
What’s the Way Forward?
Just like with houses, it’s critical to lay the right foundations at the startup phase of business. You will need to create a business plan, which is the foundation on which all other business efforts are built. A business plan allows you to lay down the basic structure for your business and acts as a road map towards your goals.
As Silicon Valley pioneer and venture capitalist Eugene Kleiner once said, “having a business plan forces you into disciplined thinking.” It allows you to identify pitfalls in your plans. An idea may sound so good in your head, but when you put it down and punch in the numbers, you’ll realize it’s not so great after all. A business plan will assist you to plan your growth, market strategies, operation, financing, and competition. Without a business plan, your foundation will be weak, and your business can struggle and be unstable for a long time.
However, the good news is that you can build your business foundation anytime without necessarily bringing down the whole structure. You can develop and implement the ideal plan to grow your business with certainty and control.
The Other Components to Make Your Business Tick
Asides having a business plan, other essential components of a good business foundation include;
Identifying your niche market – Not everyone is interested in your product or services. Narrowing down your target market to a selected few allows you to serve your customers better and optimize profit.
Financial structure – Long-term business profitability and growth can only happen with detailed planning. It’s critical to have a laid down roadmap to track key financial and non-financial drivers.
Good Team – A business is just as good as those who run it. Implementing a system that allows you to hire, train, and empower good hands to run your business is essential to business success.
It’s essential to also have an excellent customer service strategy, as well as sales and marketing/branding strategy.
Conclusively, as Jim Evans said, “to really maximize your potential as an umpire, you need to get a solid foundation as soon as you can.” We should always keep in mind that it is the ‘behind the scene’ things in a business that can make a significant difference in our success.