The great businesses of the world all started with an idea and they all were small in the beginning. How did these companies succeed? What are the most important factors for small business success? There certainly has to be an idea, a vision, and the will to carry that vision to reality. And, there needs to be flexibility because no battle plan outlives the first contact with the enemy. Other factors along the way are leadership and team building, investment capital, and a focused but flexible business plan. Marketing, timing, and the ability to scale up when the opportunity arises are also important. But, what are the essential and most important factors for small business success?
Your idea for a small business may be to serve the best waffles and make the best coffee. You want to start a restaurant focusing on a few exceptional items, excellent service, and a prime location. This is not a new idea and it does not have to be. Or, you may work in the high tech world of computers and decide that you can use the parts and technology already available to create a product that no one has thought of. Steve Jobs and Steve Wozniak created the Apple personal computer this way and went way beyond the dreams of a small business.
The point is that the first and most important factor for small business success may just be an idea that you can put to use to make money.
Writing a business plan is not just about getting a business loan from the bank. Writing a business plan helps you convert your great idea into a workable business. The three reasons why you need a business plan are to set priorities, maintain control as you progress, and get financing. Please notice that getting financing is number three after thinking through your idea and setting priorities for how to proceed. And, it is also after using the business plan to keep control of your business as you progress.
Another aspect of maintaining control is effective budgeting and reducing unnecessary expenses. Part of an effective business plan could well include the use of the Profit First method of accounting. Leadership skills are important for any business but the leader needs to have developed a plan to start from, follow, and modify as needed. The team needs to know the goals of the business and the game plan for accomplishing those goals. One of the most important factors for small business success, after the idea, is a business plan.
A business plan that is carved in stone is not only useless but dangerous when conditions change unexpectedly. There are many times when a leader needs to be able to “think on the fly” and modify a business plan or scrap it in favor of a fresh approach. The point is not that the first plan was defective but that the world changes and successful businesses change with it.
All small businesses need an idea and a plan. Everything else that the business needs boils down to hard work and persistence. Elegant execution on your business plan may go off very smoothly or it may fall on its face. Murphy’s Law does not just apply to rocket science (where it began) but to every endeavor of life. A small business requires hard work to put a business plan into operation in order to make the idea of the business come true. And, when things do not work out as we expected, tenacity is often more important than brains, money, or luck. Hard work and persistence are the most important factors for small business success!
So, things are not working out as expected. You are not going to give up. You will work harder and succeed. But, hitting your head against the figurative brick wall is not the answer. Many times the original idea behind a business needs to be tweaked a bit before things start to jell. Or, there may be issues in the business plan that need to be fixed. Persistence may have to do with going back again and again to rethink the original business idea, modify the business plan to fit, and then rolling up the sleeves and going at it as many times as needed.
In regard to the Profit First method, we have written about Parkinson’s Law and how jobs expand to fill the time allotted to them and projects go on until they eat up all of the available budget. There are simply times when a business owner needs a clearer idea of what is going on in the financial side of the business. Using QuickBooks, the best small business bookkeeping software, is important, and generating QuickBooks Custom Reports helps the business owner see not only the financial details but also gain actionable insights that will get the business back on track.
An addendum to all of this is that good advice may be hard to come by, but when you find some, it can be invaluable. At Exigo Business Solutions in the Kansas City area, your profit is our passion. We can certainly do your accounting, but we help our clients with a lot more. Because of our unique experience in working with many businesses, we can offer insights that will not only make your business more successful but also make the job of attaining that success a bit easier.
For help with business plan development, applying the Profit First method to your business, or deciding on which QuickBooks version is right for you, contact us at Exigo Business Solutions today.