One of the secrets to running a successful small business is to maintain control at all times. In formulating your business plan strategy, there are different aspects of control to consider.
The first is operational control. This refers to managing the processes used to produce, sell and deliver goods according to an operating plan. The main tools used here are setting targets and using key indicators of performance.
The second is financial control. This refers to the management of costs and expenses in relation to budgeted amounts. The main tools used her are the budget which sets out the desired results and an accounting / recording system that accurately reflects the actual results.
The third is self control. This is probably the most challenging of all. This refers to an owner’s ability to steer the business in the right direction and to meet the challenges along the way with a calm mind and optimistic outlook. This is difficult for many new owners because (a) they are untrained in business and (b) running a small business can be a lonely undertaking.
The fourth is not allowing any of the control systems above to be compromised. There are many ways to lose control, but here are 7 of the most common ways that business owners lose control.
- Lack of planning
- Not understanding the difference between profit, cash flow and debt
- Abrogating all personal interest in control of a business
- Paying no attention to risk management
- Working in the business instead of working on the business
- Inability to make clear reasoned decisions under pressure
- Placing little or no value on own time.
So business is not really about battling for sales, winning or losing bids, or competing with the person down the street. Opponents are an illusion. The harder you try to win, the prone you become to losing.
Engaging in contests of any kind only serves to narrow your focus to the point where you make yourself believe that the person in front of you is the problem and overcoming that person will somehow enhance your business.
It won’t. The solution you seek does not always appear by solving the problem you see. It is usually found by widening your focus.
Although it will serve you well to be aware of other market participants and influences, competing with them or attempting to control them is not really something that you should burn your resources on.
There is no such thing as business failure when you are in control. The only things that you are able to control are your processes, your finances, and yourself.
So when you are thinking about your business plan strategies, your focus should be on controlling what lies within your control. For everything else, think carefully about the appropriate response.
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Until next time