E=mc²

Focus on the big picture ...

As an entrepreneur, one of the biggest questions for me was “what is important for ensuring the success of my business?” The Internet is full of articles and advice – “5 Essential Steps To Successful This”, “8 Must-Do Steps To An Effective That” … – but it can all become overwhelming.

This got me thinking as to what the quintessential elements were that I had to focus on to run my small business effectively. There must be a single “A-ha!” set of guidelines, I thought, that are easy to remember, logical and most of all, effective and would help me focus on what was important for the well-being of my company. Focussing on the “big picture” is especially important for small business owners who have to constantly multi-task to get everything done. In my case I got so bogged down in the details that I lost sight of the big picture – even after setting time aside for daily planning and time management.

So, after reading all I could on running a small business, I came up with the following little equation;

e=mc²

Look familiar? Most probably it does because it was developed by Albert Einstein to explain the mysteries of the universe. My equation doesn’t pretend to be so ambitious. It’s just an easy way for me to keep in the forefront of my mind what I should be focussed on every day.

As you may remember from maths and science, the letters in the equation represent values, and the values in my equation are as follows;

execution = marketing.customers.cash flow

Let’s take a look at each part of the equation in a little more detail.

execution

Nothing to do with shooting people; I am talking here about business execution … doing business. I use the word execution to remind myself that I must the results I am after are through the execution of my plans through action, not just talking about it or spending all my time planning. Planning has its place and is immensely important, but it shouldn’t cut into execution time.

marketing (we’ll lump sales in here as well)

Marketing is used to spread the word about what you offer and sales is all about getting people to give their money to you in exchange for your product and/or service. They are different but both crucial to your execution. Getting new business, especially for a young company, should take up a fair amount of your time and be your absolute focus – although, don’t make the mistake of focussing on this alone.

Originally I confused advertising with marketing. I thought that if I slap an ad into the Yellow Pages and my local trade mags and classifieds, it would be enough. I tried this and it kept me afloat, barely, but business was a struggle.

Then I switched to making my marketing a far more active endeavour, and things changed for the better. And it wasn’t expensive. Active marketing is about finding leads through the Internet, through networking, through getting out there and talking to everyone you can. It’s about meeting people, making friends and building relationships.

Once I identify my leads, I try to stay in touch with them and entice, cajole and guide them into becoming customers through my sales techniques. Selling is an art in itself but is nothing to be feared. It takes dedication and practice (along with some guts initially) but almost anyone can learn to be a good salesperson. I am still learning not there yet, but I have improved markedly.

Once your leads buy from your and become customers, then you proceed to the next part of the equation.

customers

Many companies focus all their energies on getting new customers and don’t realise the value of existing ones. Companies with bad service are a dime-a-dozen nowadays, which is unfortunate as it is not difficult to take care of existing customers. And taking care of your customers can have huge rewards; you can sell other products to satisfied customers, you can get their feedback to help you improve what you offer and best of all, satisfied customers become your best promotional tool through word-of-mouth!

It is estimated that keeping a customer is up to 9 times cheaper than getting a new one. And there is no mystery to customer care. It’s all about just making the effort to keep in contact with your customers, listening to what they are saying and making them feel like you care about them and their problems. It is especially important to look after the customers that complain. In most cases, if you sort them out and they will become your most loyal fans!

cash flow

There are two sides to this coin, income and expenses.

First, and most importantly, you have to make sure that you are not only selling, but also that the money is actually finding its way into your bank account. Every small business owner will attest to the difficulties they have collecting the money owed to them. For this reason you must prepare for this and set aside time to phone, prod and threaten if needs be to get what is owed to you.

On the other side of the coin are your expenses. The quickest way to shooting yourself in the foot in business is by neglecting your expenses and letting them run amok. It’s important to keep tabs on expenses and to make sure that you set some money aside for a rainy day.

e=mc²

So there you have it. Obviously you will need to spend time on other aspects of running your business, but this equation might help you keep your eye on the ball. I have printed it out and stuck all over my office so that I can remind myself what I should be doing all the time. It looks messy, but it really helps.