Starting a new business can be as exciting as it is overwhelming. The first years are essential to get right, especially for small businesses where the entrepreneurs provide the initial capital and take all the risk.
Like a fresh seed in a flower bed, your business must be carefully cultivated to bloom in full. With that in mind, we here at Lista Philippines present the following guideline from the seminal book on entrepreneurship entitled “Traction: Get a Grip on Your Business” by Gino Wickman.
1. Focus on growing. Enterprises usually expand in gradual bursts. Eventually, you will notice your organization reaching a particular ‘ceiling’. This term refers to the natural limit of your existing setup. For instance, you might notice your profits becoming fixed for several months. It is easier to recognize when you’ve hit your ceiling if you keep records of all your financial transactions. For example, using a bookkeeping app like Lista is a great way to keep track of these details.
However, the ceiling is not just about the limits of your existing resources but also exists on the personal and organizational levels. Often we have to adjust ourselves and the very structure of our organization before it can truly change for the better.
When you acknowledge your current limitations, it's important to ensure your business grows beyond them and climbs to new heights. After all, a business that isn’t growing is by definition stagnant. Focus on improving your system and its internal organization.
2. Simplify. Keep it simple. Use checklists, visual guides, and tables to make everything easier to understand for yourself and your employees. This will also help in the long run because when businesses expand they usually become more complex and harder to manage.
3. Delegate. Learn to share the workload and trust your employees. A good leader knows when to micromanage and when to focus on more important details.
Do you have to watch over your son as he handles sales at the counter, or is your time better served by doing inventory on your stocks? This ties into the first point we made about focusing on growth. Sometimes it becomes necessary to rise beyond your ceiling and tackle the bigger problems.
4. Predict. Every enterprise has to make predictions about its future earnings. However, it is more useful to distinguish between long-term predictions and short-term ones.
Long-term predictions are a forecast of three months or longer. Begin with the far future and work backward. What is your 10-year target? What is your 5-year picture? What is your 1-year plan?
Short-term predictions are for daily or weekly concerns. Generally, business owners are most frustrated with those short-term problems which arise daily. Avoid getting caught stuck in purely day-to-day thinking. Try to systemize your business’s workings so that solving these short-term issues becomes only another part of your usual operations. Only then can you put more time and effort into reaching your long-term predictions.
5. Systemize. Make a system that works for you. Identify the different processes within it (human resources process, sales process, accounting process, customer-retention process, etc). It’s also important to agree with your coworkers on what those processes are. Everyone has to be on the same page. Once the processes are systemized, your team will be able to run them more efficiently.
As a bonus, a responsible employee under you can use the system you’ve created together and run it without requiring you to micromanage over their shoulder.
For more on this guideline, please check out the book itself, which offers a wealth of useful advice for new business owners. Traction: Get a Grip on Your Business