Starting and Running Your Business: 5 Things To Know As An Entrepreneur

Here are five things that you need to start and run a successful business:

1. When Starting and Running and Running Your Business You Must Having a Clear Financial Plan

Putting together a financial plan for the next three years is the foundation for running a successful business. You may have a hard time imagining your business beyond three hours much less three years, but creating a financial plan for the future can help you set the goals you need to achieve and ensure your buisness doesn’t fail. Your plan should be monthly for the first year and can be quarterly for years two and three. This financial plan should be your income statement (sometimes called a Profit and Loss Statement, or P&L) which shows all of your income and all of your expenses (for example, your Business Gas and electric expenses and any other montly expenses your business might require). Side by side with that is your cash flow statement which shows all the cash coming in and all the cash going out. Your job is to manage the business to this financial plan to ensure success.

2. When Starting and Running Your Business You Must Set Business Goals

Now that you have your financial plan, you need to set goals for your business. Of course one of your goals is to meet your financial plan. But the goals you set are the ones that drive your financial plan. Examples of business goals are:

• Have 95 percent customer satisfaction
• Raise $1 million dollars by June 1
• Launch our new product by March 1

These goals are the drivers that help you meet your financial plan. These goals act as a north star – keeping you focused on these items. And for all of the things that you set as goals, there are a whole bunch of other things that you do not set as goals. Once you have the debate and finalize the goals you set, you can then align your effort and resources to those business goals .

3. When Starting and Running Your Business You Must Focus on a Customer Type

When we just start running our business, it is natural for us to chase every customer. After all, when we have no revenue, we will go after revenue anywhere we can find it. If someone told us that there was revenue on Saturn, we would start looking for a cheap ticket on a rocket to get there. It is natural for us to chase every customer, especially when starting a business.

Unfortunately, this doesn’t work. Each and every one of us believe that what we are doing is a little unique. And because it is unique, it has not been done before. As a result, each type of customer you go after will likely not be a perfect fit. Whether it is a business or a consumer, they are likely to want a different price, a different package or a different set of features or functionalities to your product or service. This is natural – they may not have seen what you are offering before.

Most entrepreneurs tend to pivot when they hear these natural objections and go after a different type of customer. This is problematic for many reasons. First, it is likely that every customer type will have some sort of objection – after all what you are doing is new. Next, when you jump from customer to customer, you never learn the real reasons why a customer buys.

Think of it this way – if you commute to work the same way every day, you get to understand how the traffic works, how the weather affects your timing and how your timing dictates your journey. If you went to work a different way every time, you would have a hard time determining the best time, route and weather. It would be like you were figuring it out for the first time every day.

When we stick to one customer, we learn. We get to know the ins and outs of a market segment and can tailor our product, service and selling process accordingly. In addition, we create efficiency when we stick to one customer type. We understand their drivers. We can use the same sales and marketing materials. We use the same messages. So when we are writing a business plan, we need to pick a type of customer and stick to it.

4. When Starting and Running Your Business You Must Build Process to Manage the Company

It is all fine and good to create a financial plan, to set business goals and to stick to a customer, but in the chaos of the entrepreneurial day, how do we make sure we are aligning our effort to our plans and goals. This is where you need a process – or more accurately a set of processes – to manage the company. For a company with more than a few employees, this business plan should consists of the following:

• Weekly management meeting: weekly meeting where the senior team gets together and goes over performance against the financial plan and the goals that support the plan (and any other important initiative).
• Weekly Department Meetings: the CEO should have a weekly meeting with each department head.
• Initiative Meetings: other regular (weekly or bi-weekly) meetings on important or recurring initiatives. These might be customer satisfaction, or pricing, or product launch initiatives.

Even if it is just you, you will benefit by setting aside separate time for you to work on these items. You may not have as many formal meetings as part of your process, but even if you conduct regular meetings with yourself at set times during the week, you will create an efficient way to address the daily issues that come across your desk.

Many entrepreneurs think that process is a dirty word. To the contrary – a business plan is the mechanism that allows us to move faster.

5. When Starting and Running Your Business You Must Communicate Efficiently

When you are first running your business, you often have a series of constituents that you need to keep informed. They might be employees, interns, board members, advisors, investors and the list goes on. In many cases, these folks are rarely in the same physical location. We as entrepreneurs have a tendency to communicate on an ongoing basis throughout the day. This is incredibly inefficient. Create a one page sheet that has a table with two columns – the first had the department or initiative (e.g., marketing, customers) and the second has three bullets that give some information about what is going on in that area. Distribute this communication sheet once per week and use this as the main way to keep people informed about what is going on.

Starting a business and running it is a skill. And in most cases the skill of running a business is very different than starting one. Using these top five steps to run your business can create the type of environment that breeds success. These tools are not nearly as sexy as your entrepreneur “idea” – but they are the tools that take an idea and integrate it into a business plan that created processes, improving your chances for success.