It’s easy! Understanding how to run a business successfully really boils down to using your common sense. The trouble is that the pressures & strains of running a business venture make you run business operations ineffectively.
The strategic leadership skills needed to run the business fall into a couple of key areas, as I’ll show you…
Do your market research
You wouldn’t buy a house without checking out the neighborhood, would you? Similarly you shouldn’t sell products without knowing your market.
You need to do your research into where the customers are, what benefits they are looking for and how your product is going to satisfy these benefits. And then understand how to combine strategy and innovation to deliver products with benefits your clients/customers truly need.
The Golden Rules are:
- Check out the competition. Research their websites, product range, markets, price points. Establish how you’ll compete.
- Use beta releases of products to test the waters.
- Try selling products on eBay/auction sites first. It helps establish a price point and customer demand.
- Use whatever means possible to promote your products/web-sites (e.g. podcasts, free newsletters and videos on YouTube, etc.). See also our post on simple ways to advertise your business.
- Establish markets using Google Adwords to research keywords relating to your product. This also helps establish the amount of potential traffic you could expect to websites promoting your products and therefore the number of potential sales.
- Retain existing customers. If your company is a going concern (in business for a number of years) then use customer loyalty research & surveys to establish how to hang onto your existing customer base.
Simplify your expenses
If you want to know how to run a business badly then look out for those companies who blow their budgets on fancy advertising campaigns, company cars and hugely inflated workforces. Having a high turnover and huge customer base means zilch if your outgoing expenses are eating into all your profits.
The Golden Rules are:
- Only increase your work-force size when absolutely necessary. Consider outsourcing certain elements of work (e.g. payroll) in SMEs. Don’t hire outside consultants unless you absolutely have to.
- If you’re running a business from home then why not do most of the work yourself. Get free legal advice where possible or free legal documents online.
- Use as much free or cheap advertising as possible (e.g. website promotion, community newspapers, radio, etc.).
- Learn to do your own financial statements and expenses. This may already be the case if you’re running a business from home.
Be a proper leader
All great leaders have the skills needed to run a business successfully no matter what the economic climate is. They can motivate and encourage staff to strive for greater success in the company. After all, no one person can do all the tasks required to build an organization. Yet, by having loyal motivated employees working for you then it’s possible to rapidly grow a productive and well run business.
The Golden Rules are:
- Encourage open feedback within the company. All employees should feel free to criticize, advise and express opinions regarding all elements relating to your business. It facilitates better decisions from top-level management.
- Take calculated risks. A risk could be a threat or an opportunity. Do your research and make the right decision.
- Delegate power where possible but don’t lose sight of day-to-day operations. Delegation frees you up to work on other things, such as long-term plans. You should however still be running day-to-day business operations and understanding the daily issues that staff are experiencing. As your company grows, delegate financial responsibility and power to those individuals who are actually bringing profits for the company (e.g. specific salesman, product architects, etc.). This also feeds into your best practices for succession planning by mentoring and training the next wave of managers/executives who will need to take the reins of various parts of your business.
- Foster a good working environment. This means ensuring there is a good work-life balance for all employees. Overworked or workaholic employees will eventually burn out causing productivity setbacks and inconsistency in your business.
- Recruit the right people from the start. It only takes one bad apple in any team/group/company to sow the seeds of disgruntlement. Your direct reports should be critical hires which you pick carefully. If you want to know how to run a business successfully then do as Google do and stringently interview candidates to make sure only the very best individuals with the right attitudes are hired.
- Be flexible in your strategies. No two companies are the same and the economic context within which you work is constantly altering. As a result, you should run business operations and strategies in a dynamic way and constantly be on the lookout for the next opportunity or threat your company. This is especially important when running a business from home.
- Don’t hesitate! Richard Branson famously said that if you want to know how to run a business successfully, then just go do it! Don’t hesitate! Some people are talkers, and some people are doers. Learn the skills needed to run the business as you go along. In business, you need to be actively making decisions and applying strategies on an ongoing basis. Any hesitations result in your competition taking over.