As business owners, we all want to be successful on purpose -- achieving tremendous results by design instead of stumbling toward them. With that in mind, here's a roadmap to help you bridge the gap between where you are today and where you want to be down the road.
This map comes courtesy of Verne Harnish, who has helped entrepreneurial teams achieve greatness for more than three decades. The Venture columnist for Fortune magazine, Harnish is author of Scaling Up: How a Few Companies Make It...and Why the Rest Don't (Rockefeller Habits 2.0). He also founded two world-renowned entrepreneurship organizations -- the Entrepreneurs' Organization (EO) and the Association of Collegiate Entrepreneurs (ACE) -- as well as Gazelles, a global executive education and coaching company.
To truly scale up and take your success to the next level, Harnish says you need to make the right decisions in four key areas of your business:
1. People. To scale up, you've got to "get the right butts in the right seats" by finding great people and putting them where they can do the most good. Of course, there may be just one butt in the company today -- yours! But as you grow, list all the functions that need to be taken care of on a daily, weekly and monthly basis, and ask yourself to whom you can delegate these roles. This can be as simple a task as outsourcing your bookkeeping to a neighbor (as Harnish did when he founded Gazelles) to as complicated as hunting for an experienced CTO.
Another people-related task you must do is make a list of the top 25 relationships that you need to nurture in order to really ramp up -- and start nurturing them. These "influencers" are the movers and shakers who can help you leapfrog to big results. They often include other highly successful entrepreneurs, editors at influential media outlets and thought leaders among your target audience. "When we built ACE, we put that list together and then all we did was figure out how to network our way to one key influencer every single week and get them behind us."
2. Strategy. The first key step in creating an industry-dominating, competitor-crushing strategy is to answer this question: What are the one or two words that you can own in the mind of your market? For example, when you think of Volvo, you think "safe." When you think of Google, you think "search." Likewise, your firm's name can convey these words. One of Harnish's clients wanted to convey its ability to help contractors and utilities work safer and more productively. So they named the firm Trench Safety. "A lot of entrepreneurs are so general that they never accomplish the very simple task of owning a word or two that resonates with their customers," he says.
3. Execution. Our to-do lists are never-ending, of course. So Harnish recommends that we find our "front domino" -- the one big task that, if accomplished, will knock down most or all of the remaining dominoes behind it. It might be boosting your gross margin by 5 percent or tripling your number of leads from existing clients.
Regardless, once you identify that number-one task, here's the key: You have to carve out at least three ninety-minute periods a week to devote to making it happen. If you can focus four to five hours a week on the number-one thing that's going to move your business forward, you'll generate tremendous results. "It takes a dedicated routine of spending time every day on that one thing for success to happen," notes Harnish.
4. Cash. Simply put: Don't run out of it! Get serious about keeping a pile of cash on hand to weather the inevitable storms. That's exactly what top business owners do. From the day he started Microsoft, Bill Gates aimed to have a year's worth of payroll expenses in the bank. In his book Great by Choice, Jim Collins found that the companies that were able to really sustain their success through bad times had three to 10 times the ratio of cash to assets relative to other firms.
Raising cash these days is easier than you might assume, thanks to crowdsourcing options like Kickstarter and Indiegogo. "We don't need to go out and beg for money from large investors anymore. The best money to get is from your customers and future customers," says Harnish. "Crowdsourcing essentially lets you pre-sell your product to those first dozen or hundreds of customers that you need to gain some traction."
Indeed, Harnish himself tapped his existing base of business to help jump start his latest venture, Gazelles. "I went back to about a dozen of my existing customers and said, "Look, why don't you prepay what you're going to buy from us in the coming year, and we'll give you a nice discount for that," he says. "That got me an entire year's worth of payroll in the bank, and we've done that approach ever since. We have funded our growth purely from customers."
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