How to Succeed in Business and Make Money
As a business owner, your personal qualities are crucially important if you want to drive your business forward. Most businesses fail because their owners don’t have the personal qualities to make their business succeed. It takes motivation, persistence and many other entrepreneurial qualities and we will cover these as we go along. For this month, I want you to consider exactly what it is you want from your business and exactly what you want it to achieve.
What do you really want from your business?
It is important to analyse exactly what it is you want your business to achieve and consider how best to take things forward. You could be at a crossroads where you decide which way to develop your business — and this course will help you to make the right decision.
Business: marketing products and services or ideas
Real estate: owning or developing property
Investments: making money from stocks and shares, bonds and commodities
Internet: Internet-based opportunities
Ideally, you should be focusing on where your knowledge, skills and interests lie. One of these wealth creating models should be your primary area of interest, but there’s no reason why you can’t develop other methods of making money in time. A balanced portfolio is always a good idea.
Think about your business as it currently stands. How does it fall into one of these four wealth creating models? Is this the right route to wealth for you? For example, you may currently own real estate but your heart, skills and enthusiasm are for business. You may be able to guide your current wealth creation model towards something more appropriate for you. Let me give you an example.
Imagine you inherited an old, rundown house from an aunt and you got into property development almost by accident. You may not be particularly interested in getting your hands dirty doing up this old property, but the opportunity presented itself to you. Your real interests lie in business. Just think of the possibilities for directing your property developing towards your real interests in business. You could write a course on property developing that you can sell — film the whole process as you are developing your property and write about each stage. Take lots of photographs and get the advice of experts in the field. Once you have completed your project, you can start selling your course and produce instructional DVDs from your film footage.
You could set up a consultancy where you advise people how to go about property developing, or you could employ project managers to oversee property development for your clients. Alternatively, you could just sell the property and use the money to set up a business. Either way, you could transform your property ownership model into a business model and end up with a business more appropriate to your goals and aspirations.
Similarly, if you are running a bricks and mortar business, it’s relatively straightforward to transform your business into an Internet-based business. You could start selling from a website, if you’re products and services are suitable — and if they’re not, you can start to diversify so that you are able to sell more via the Internet. In fact, most businesses can be developed so that they are more Internet-based.
By the way, for the purposes of this course, I am assuming that your wealth creation model is in business or the Internet — we won’t be covering investments or property in this course, although some of the general information may be useful in these areas.
Are you doing something you love?
If your business is going to have longevity, it’s important to be involved in something you are motivated to continue with. If you have to drag yourself out of bed in the morning to work on your business, you might just as well work for somebody else in a job you hate!
If you enjoy what you are doing, you will have the enthusiasm and commitment that’s needed to develop your business. Not only this, but you will have the right knowledge and skills and you will have the potential to become a real expert in your field. This aspect is becoming more and more important these days and is all part of creating credibility which can lead to more success and more profitability. People will pay a premium for an expert — think about how top professionals such as medical experts, accountants, lawyers and so on command much higher fees than their less qualified or talented competitors.
It actually pays more to enjoy what you are doing and to be committed and enthusiastic, than it does to scrape along in a business if your heart is not really in it.
Do you feel you have balance in your life between work and leisure time? Even if you are doing something you love, you need to ensure that you take enough time out to enjoy life and recharge your batteries. Too much work and not enough time to relax and enjoy time with your family, friends and your other interests is not healthy and can be detrimental to your success.
Do you feel under pressure to make your business a success for financial reasons, or because other people have high expectations of you? If you do, your work-life balance is likely to be skewed towards too much work.
If you are working too hard, try to find ways to delegate some of the routine tasks in your business and try to get some balance into your lifestyle — you will find that you will start to be much more creative and ideas will flow much more easily when you get adequate rest and an occasional change of scenery.
On the other hand, if you are not working hard enough at your business, you need to reassess where you stand with things. Perhaps you are not doing something you love and your business is becoming a chore? If so this module will help you to decide which direction to take your business in the future.
Consider how your business currently fits in with your lifestyle and make any adjustments necessary to create a healthier work-life balance.
Businesses are more successful when families work together to make it happen. How much family involvement do you want in your business? Do you work better alone or as part of a team. All these things can make a difference to the success of your business as well as the level of enjoyment you get from it and the commitment you are willing to give.
Do you get the level of support from your family and friends that you need? Many business owners soldier on single-handedly and risk burning out because they don’t ask for help. It is surprisingly important to have the support of your family and friends because if you don’t have this, it can become an uphill struggle. It’s stressful and de-motivating to have to constantly defend your ideas and justify what you’re doing.
It’s worth sitting down with your family and talking to them about your business plans — if you can find a way to get their support (or more of it if they are already supportive) then you dramatically increase your chances of success. Remember that ‘a boat with a hole in it is sunk’ — don’t allow your family, or anyone else for that matter, to be the hole that sinks your boat!
Skills and knowledge
Do you have the right skills and knowledge for your business? It can make things a million times harder when you don’t have the right attributes to run your particular business. You end up relentlessly playing catch up and it makes it very difficult to compete in the marketplace when you don’t really know what you’re doing.
If you are already in this situation, try to find ways to increase your knowledge and sharpen your skills by doing courses (such as this one) or outsourcing some of the specialist tasks that you’re not equipped for. As I mentioned earlier, credibility is important these days and you really need some level of expertise if you want your business to be a runaway success.
What are your motives?
Are you running your business purely to make more money — or do you have a deeper motive? For example, do you want to make a certain amount of money quickly so that you can invest in a different business or property for example? What you’re doing now may not be your ultimate goal but a stepping stone along the way. For example, an artist might paint portraits or wait on tables to earn enough money to set up his own art gallery, even though he’s not particularly enthusiastic about painting portraits or being a waiter — it’s a means to an end.
It’s a useful exercise to tease out what your true motives are for running your business as it may help you to develop your business in the right direction. You may already be running a business that you are enthusiastic about but if you can evaluate your true motives you can drive things forward even more effectively. Some motivations for running a business include:
• Making as much money as you can, as quickly as you can so you can retire or do something else
• Support your family, pay the bills and get the kids through college
• Get away from paid employment and having a boss telling you what to do
• Turn your favourite hobby into a business so that you can spend more time doing what you love
• Develop a business with equity value that will fund your retirement or leave something of value to your children
• Allow you to express your creativity
Maybe it is all of the above — or something else entirely! Take some time to think about your true motivations for running your business and how you would like to take things forward into the future. It’s easier to get on the right path in the beginning than change course later when you realise you should be doing things differently.
Do you have an exit strategy?
Ideally, you should plan your exit strategy before you even start a business. Is it a long-term enterprise or are you simply motivated to make some quick cash? Whatever your motivations for running your business, you will have a different exit strategy and it is a good idea to plan this now because it can help to maximize your profits and clarify your goals.
Your exit strategy is an important part of business planning — consider the purpose of your business from your personal and financial perspective. Consider whether you want to build a long-term business or create a business with a short-term exit strategy. Do you want to build a business quickly then sell it on? Do you want to expand your business to include franchising or creating a chain of businesses?
Perhaps you are investing in an existing business as a venture capitalist? This usually involves capitalizing on your investment in the shortest possible time — most investors stay involved with the business for 3 to 7 years and expect a good return on their investment.
Possible exit strategies include running your business into the ground and maximizing your income while the business is operating — when you’ve exhausted all possible markets and your products or services have gone way past their peak, you simply close the business.
Another exit strategy is to sell out to business partners, so that you take a marginal role in the business. You could also sell your business outright to a new owner — your business could be worth 1.5 to 2 times your adjusted net profit. Aim to sell while your business still has potential, as this is what will make it attractive to partners or buyers.
Another way to exit is to sell or merge with a competitor. This is usually a rival firm that would take over your market share, your clients and the goodwill of your business.
Alternatively, you may wish to continue running your business and leave it to your children and grandchildren. Whatever your exit strategy, the way you leave a business can be just as profitable as running the business itself and it is worth planning this now.
Another thing to consider is how involved you want to be with your business. Are you a sole trader, happy to do everything yourself, or would a partnership suit you better? Do you have employees or associates that run the business for you while you direct things from the background? Are you happy to stay on the sidelines as an investor? Do you want to develop an Internet business that is largely automated?
Whatever your level of involvement is now — think about how you want to be involved in your business as you take things forward. Remember that many of the day-to-day tasks can be outsourced and even sales and marketing can be outsourced or delegated to others — often on a commission basis.
Many business owners and entrepreneurs want to be fully involved with their business, while others prefer to manage their business remotely. Some love direct contact with their customers, while others prefer to reduce their contact with customers using auto responders or staff that look after the service aspects of their business.
The main thing for you to take away from this section of the course is to really think about what you want from your business, both on a personal and a business and financial level. If you are planning to develop your business over the long term, do it in a way that suits your lifestyle and your goals and aspirations — running a business takes up a huge chunk of your life!
Do you believe in your products and services?
A major aspect of whether or not you succeed in business is how much you believe in your products and services. Are you proud of what you are offering your customers? Do you believe wholeheartedly that you are offering something of value that is useful and offers genuine value for money? The thing is, if you don’t believe in your products and services, then you have no hope of persuading your potential customers to believe in them either.
Take a critical look at what you have to offer and to be honest with yourself about its quality and value. Scrutinise the benefits of your products and services — as we did in module one.
Is there room for improvement?
Do you need to improve or diversify?
Do you have an effective marketing funnel?
Now is the time to make any necessary changes if you do not fully believe in what you’re business has to offer