Operations

Small Businesses Survive When Organized

Lexi Tucker
Posted on January 14, 2019

(L to R) Bill Faeth and John Bearden discussed how having a comprehensive business plan can enable steady growth. (Photo credit: Blake Russell)

(L to R) Bill Faeth and John Bearden discussed how having a comprehensive business plan can enable steady growth. (Photo credit: Blake Russell)

NASHVILLE, Tenn. — It’s vital for entrepreneurs to take an organized and holistic approach to owning, running, and leading a small business. John Bearden, an investor, business leader, and mentor to Bill Faeth, addressed his approach to success at Faeth’s LAB Live event in April 2018.

There’s one primary difference between large and small companies: They have a disciplined approach to business management, Bearden said. There is always a plan with a specific set of financial goals.

“It’s hard, but important businesses operate in a more disciplined format,” he said. “Many owners have a lot of activity on their agenda but take a chaotic approach to the business. It makes a tremendous difference in your performance when you operate with a strategic plan and a thoughtful approach to every aspect of the business.”

The Three Elements Of Success

The three elements of success are financial, human, and intellectual capital; in other words, money, talent, and knowledge.

“I think it’s important from a financial capital standpoint business owners spend a lot of time building the story of their company and taking that story either to investors or financial institutions or both to arrange for the money you need to build the company and have security as you go along,” Bearden said.

With talent, he’s seen many smaller company owners try to build their business on the backs of inferior people because they think going cheap is the best way to build a team. “Business is a team activity. You have to find the right people with the right characteristics who fit with your culture and hopefully have the experience or ability to learn, and [then] invest in those people. This is not a place to go cheap. Talent is critical to your ongoing success.”

Finally, you shouldn’t go into a business with little knowledge about the industry. “You need to invest the appropriate time to not only arrange the financial capital to bring in the best possible people to execute a plan, but also have a deep knowledge of your marketplace and business, and how your business should be able to compete successfully in that market.”

Creating A Business Plan

What's your business plan?

What's your business plan?

Eight factors contribute to perfecting a business plan.

Leadership: As the leader of the business, you are setting the long-term goals. You are then establishing the critical values of the business. What do you believe your business stands for? What should your team always know about its values? What’s the culture you want your business must have?

Financial resources and management: It’s up to you to make sure the company’s plan is compelling enough to justify the types of financial resources needed to build your business. “I think it’s critically important you bring in investment partners or have relationships with financial institutions where there is a tremendous amount of transparency.”

Marketing: You must understand the marketplace you’re serving. You have to know the addressable opportunity in your market and the status of your competitors. What are their strengths and weaknesses? How can you build a unique proposition that takes advantage of their weaknesses or where you will fit within the competitive marketplace you’re serving?

Sales and customer development: “It’s a sequential process. You’ve got to go about it with a great sense of energy and a genuine interest in building relationships and then make sure everyone in the organization is aware of its value proposition.”

Establishing process and operating systems, and a supportive organizational chart: “I think most humans want to know where they stand in a company’s structure. They want to know their responsibilities and what they are accountable to achieve. Creating clarity about who can make a decision and the magnitude of those decisions is important.”

Monitor, analyze, and adapt to the financial performance of the business: “So many of the companies I’ve worked with over time believe as owners there’s just not enough time. It’s hard to take the time to study financials, to analyze where the business is doing well, where focus needs to be put into place to improve performance, and to actually then adapt to the realities in the business.” Make time. Designate at least one day a month to do nothing but study the data the business generates. Constantly look at your balance sheet to make sure your assets and liabilities line up.

An HR management plan: Recruit, invest in, and develop good people. Give them clear definitions of their roles. As a business owner, be prepared to not only to reward those people, but recognize them so they are noticed by their peers.

Develop and sustain your relationships with your customer base: Look for opportunities to leverage those relationships into more sales opportunities. “Once we get a customer, it is not uncommon to assume they will always be there. I think we need to be able to invest in the time and resources necessary to continue to build and expand the customer relationship.”

Knowing When To Implement

How do you know when to focus on each of these eight components? “You’ve decided with a business plan you’re going to drive the company. As you look across the entire gamut of complex components that are your business, you have to make decisions based upon your capacity, time, financial resources, opportunities, and team, and execute it with those pieces in mind.”

At times, you may need to pursue an opportunity when you don’t necessarily have all your ducks in the right place. There are situations where you will have to take a risk in how you spend your time and money.

“You’ve got to force yourself to stop and think about the business,” Bearden said. “That’s what large companies do. They have the discipline to build a plan, constantly monitor it, and then adapt to the actual performance.”   

[email protected]

Related Topics: Bill Faeth, business growth, business management, LAB Live, Limo U

Lexi Tucker Senior Editor
Comments ( 0 )
More Stories
Determine your opportunities. How can you stand out among those who provide the same type of service? Where is there room for improvement, and what can you do to achieve it? Source: Square
Article

Make Your Rival Your Fuel

OCT. LCT DISRUPTIVE DISCOURSE: The time you spend worrying about what others are doing or might do is time better spent doing all it takes to become the MVP of your industry.