Regardless of the industry you may be in, the number of employees involved, or your annual revenue, there is a top 10 list of functions within your business. Always.
Now, not all of these functions are priorities in the beginning. Still, all of them will eventually become priorities, and if your business grows large enough, all ten functions can become simultaneous priorities. None of these functions stand alone, but every one of them fits into the larger puzzle of the organization and must be driven by and support the business owner's Vision. That Vision is defined as what the business and the owner's personal life must look like by a certain date.
As a small business owner for ten years, I found myself in this challenging role before I understood the business functions and how they are integrated into determining where my business would be in 1 year, 10 years, and 25 years down the road. That blind spot compromised not only the health and longevity of my business but also my own health and longevity as the owner and operator, the main engine sustaining and pushing the organization into the future. With that on our shoulders as owners and the fact that often a family's business is the sole source of income for the household, ignorance regarding business basics is not a sustainable option! Small businesses are the pillars on which healthy communities and a healthy nation are built, so there is a lot on the line when you are a small business owner. That is why I became a business coach and am writing this article.
#1 Leadership
John Maxwell, leadership guru, stated it best when he said, “Everything rises and falls with leadership.” As a business owner, you are the de facto 'leader' of the business. How well you understand the nine functions that follow will go a long way in determining your effectiveness and, most importantly, the success of your business.
Setting the Vision for your business, creating the Plan to implement, and staying the course during tough times is your primary responsibility. And for most small business owners, I understand that may not be within your comfort zone. If not, seek a partner who can assume that role or a key employee better equipped to handle it.
#2 Planning
Your Plan supports your Vision as the leader. Without a clear, solid plan, you cannot make decisions that support your Vision, build a team to help you achieve your Vision, ensure smooth sailing through good times and bad, nor can tell if you have veered off course from your Vision at some point in the journey. Examples of plans within a business are initial startup/business plans, growth plans, and succession plans.
#3 Financial
Your Vision as the leader of this business will require a financial model that drives an acceptable profit to support your current and future lifestyle. The reality in a free-market society is that no matter the Vision or Plan, some business models can't produce the profitability the owner desires. This reality can save the owner from years of business and personal turmoil. A profitable business model is the fuel that feeds the engine. Unless an owner is totally on top of their business's finances, they have no idea whether that business will exist a year or even a few months later. This function includes budgeting, raising capital, cash flow, and pricing.
#4 Work/Life Balance
As the 'engine' of your business, it is imperative that you are running smoothly (just like a car engine) and not turning into a 'clunker' that is barely backfiring along. A small business owner does not wear one or two hats within the business, but usually all ten hats at some point or another, and always several of them simultaneously. My clients' work/life balance is always a top priority, regardless of their size, number of years in business, revenue, or vision. The owner's personal life cannot be separated from the business, so how the personal life goes, so does the business.
#5 Operations
This refers to the administration of practices to create the highest efficiency possible. The more efficient and effective you operate, the less your expenses will be, thus driving additional profitability to your business. Creating efficient processes for all your vital operating functions is the key to most small and large businesses. You want to become a process-driven vs. a people-driven business. Software, scheduling, delivery of goods or services, and production of products all fall under the Operations function. Greater efficiency in even one process area can result in several percentage points of improved profits for a company.
#6 Infrastructure
Your operating model requires a supporting infrastructure to maximize effectiveness. Infrastructure can refer to space, equipment, and technology to create the efficiency your overall financial model requires for maximum profitability. Adequate infrastructure allows replicability in delivery and customer value, good repeatable processes across all functions, and scalability, and it sets the tone for whether or not a company can grow. If a business is already at capacity with no room for additional capacity, the infrastructure must be analyzed and reorganized for additional capacity, growth, and profitability.
#7 Human Resources
So often, clients say, "I just can't find and keep good employees." My first reaction is for them to look into the mirror for their answer. Once your process-driven operating model is in place, the next step is to find the right employee to perform the written job description. It doesn't have to be the most experienced, which usually carries a higher salary, but the best fit per the specific job they are to perform. It includes the hiring process, compensation and benefits, employee training, and management structures, to name a few. In my experience, it can also be the most challenging function of any business without an effective, process-driven structure.
#8 Marketing
Marketing is the function that finds qualified prospects that the Sales function can close and turn into customers/clients. It's the process of bringing the desired number of prospects into your sales funnel to convert the highest percentage of them into paying customers or clients. The process starts with you by defining who you enjoy working with the most, then identifying your ideal prospect and the messaging will respond to, creating strategies to surface them, and then putting it all together in an executable plan. And it does not need to eat up 10%of your overall business budget, as conventional marketing wisdom says. For the small business owner, your marketing plan must be a return on investment in an area where they can save much money over their competitors and get much more fruitful results.
#9 Sales
A distinct function of marketing is sales, which turns marketing prospects into paying customers or clients. Sales is a structured conversation with a qualified prospect determining if the business can solve the prospects' pains. If it is not a truthful and sincere conversation, the business owner could take on a less-than-ideal customer and make life miserable. Also, if the customer leaves because the solutions promised were not delivered, their departure could tarnish the business's reputation. Suppose a small business has chinks in their sales process armor. In that case, the money they spend on marketing, customer service, and human resources fails to deliver the necessary return on investment and can also take a small business down.
#10 Customer Service
All the work in the previous nine functions will evaporate quickly if your customers/clients are not turned into raving fans. The most efficient and cost-effective marketing plan will center around serving and incentivizing existing customers to seek referrals. It costs seven times more to acquire a new customer than to retain an existing one. The best customer service is a mindset that appears as a lost art in today's economy. Yet, other than a business loan or other funding, your customers patronizing and referring your business is THE reason you remain in business.
Once an overall vision for the business is determined during a coaching relationship, the road map for getting from point A to point B must include addressing each of these 10 areas with thorough, step-by-step processes based on best business practices. Otherwise, you will have a road map with holes in it that will steer you right off the safe path.
One reason for the Grow in Sahuarita program is to help our local businesses develop each of these areas so our businesses and their owners can thrive in our Town for decades to come. Part of the coaching relationship is systematically walking you through each of the ten functions with a view toward your Vision for your business and your life.
After all, the small business owner is the small business, so as we support the owners, we support our Sahuarita businesses and future generations! To book an appointment with one of our business coaches, click here!
Coach Hilary Porter