I am going to show you the three main points and prerequisites you need in order to start or revitalize any type of business.
Success in business doesn’t solely rely on the idea, the product you’re selling, or even your skills. It all boils down to three crucial factors.
These insights come from 17 years of trial and error, and I am still on this journey.
I have learned the following main principles when it comes to starting something, grabbing attention, and achieving success:
Before anything else, you must focus on these first three steps:
- Ensure cash flow
- Establish good management
- Operate your business like a franchise, making it easy to replicate and allowing it to function well without you
Let’s explain each point.
Cash Flow
Cash flow can be divided into two categories:
- The funds you need for personal survival
- The funds your business needs to operate
If you don’t have enough money to survive, you won’t be able to plan, build, and focus on your business. You will lack the clarity and peace of mind necessary for proper operation.
For example, if you’re constantly worrying about meeting your basic needs, you won’t be able to concentrate on your goals. You’ll remain stuck in a loop of trying to cover your expenses, making it extremely difficult to achieve your ultimate objectives.
Operating Costs
In the beginning, a business requires significant time, effort, and money to run effectively.
- Time: Be patient and understand that building a sustainable business takes time. It might take longer than expected to become profitable.
- Effort: Invest considerable effort into business development and creating systems to run it smoothly (even as a solopreneur).
- Money: Your time, effort, and operating costs are all investments. A steady flow of money is essential for you to have the peace of mind necessary to grow your business.
TIP: Your personal survival expenses and bill payments can be part of the operating cost. If you are actively involved in running your business, you should receive a salary for your work. As a shareholder of the company, you can hire yourself to manage the business.
Good Management
Three key personality types are essential when launching a business:
- Entrepreneur: A visionary who is not bogged down by details, focuses on the big picture, and looks to the future.
- Manager: Ensures the smooth operation of the company, manages technicians, is detail-oriented, and continuously seeks to improve company operations.
- Technician: The employee who performs the work, understands their responsibilities, and knows the expectations and reasons behind their tasks.
Many businesses start with a technician who believes they can establish a business. However, they often discover that they’ve merely created another job for themselves and lack the skills to manage a business.
Ironically, someone with a technician mindset should start a business in an unfamiliar field to learn how to run a business effectively.
To operate a successful business, you need these three personality types or must develop them within yourself to manage and grow your business.
The Franchise Model
Your business should be structured in a way that allows it to be easily replicated and function without your involvement.
This means being organized, having a deep understanding of your brand, and maintaining consistency.
Consider the consistency of McDonald’s: you know what to expect, what you’ll get, who will serve you, and how they will appear.
Your business should strive for the same level of consistency.
Have you ever visited a small chain of restaurants with inconsistent experiences or a barber who delivers different results each time?
You want to avoid this inconsistency.
Strive for uniformity.
Even if you don’t plan to license or sell franchise locations, aim to have your business operate like a franchise.
In summary, to launch a successful business, focus on three main aspects: ensuring proper cash flow, establishing good management, and adopting a franchise-like model. By following these guidelines, you can create a strong foundation for your business and be better prepared to achieve long-term success. Remember to stay consistent, be patient, and invest in your business’s growth. With the right approach and mindset, you can turn your business idea into a thriving, sustainable venture.