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Foundations of a Successful Business

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Small businesses fail. Depending on what information you look at, up to 90% of small businesses fail in the first year and a further 60% within three years. This is both horrifying and mind-boggling to me given that small business in Australia makes up 97% of all businesses and employs 4.3 million people, which is 47% of the workforce. Unfortunately, after working with and talking to small business owners for years I can understand why. People start businesses because they need money, they want to be their own boss, they want to make a million dollars, they want to spend more time with their family or something along that line, which sounds great. The issue is that these are outcomes and while they can be motivating they aren’t solid enough foundations to build a successful long-term business. So what does create a solid foundation?

 

Starting with a vision

 

Every great business starts with a vision, it is the why in everything that you do, it inspires your team, engages your target audience, and propels your business into the future. Your vision is what you aspire to achieve, becoming the focus of everything that the business does, providing clarity, understanding, and creating a connection. You can see examples of this in the below successful companies;

 

  • Apple’s vision is “to make the best products on earth, and to leave the world better than we found it.”
  • Amazon’s vision is to be “earth’s most customer-centric company; to build a place where people come to find and discover anything they might want to buy online.”
  • Starbucks’ vision is “to establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.” 
  • Ikea’s vision is ” to create a better everyday life for the many people.” 

 

A vision keeps us moving forward to our aspiration even if it may never be fully achieved. From your vision, your mission comes to life.

 

The mission

 

The next step to building your foundations is outlining your mission. A mission statement defines the purpose of your business, what you do and why you do it. It needs to be clearly defined, unique, measurable, and achievable with no need for follow-up questions. It communicates to your team, clients, partners, and others what the business is doing in the day-to-day to work towards its vision. Here are the mission statements of the previously mentioned companies;

 

  • Apple’s mission is “to bring the best personal computing products and support to students, educators, designers, scientists, engineers, businesspersons, and consumers in over 140 countries around the world.”
  • Amazon’s mission is “we strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience.”
  • Starbucks’ mission is ” to inspire and nurture the human spirit – one person, one cup, and one neighbourhood at a time.”
  • Ikea’s mission is “to offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.”

 

The mission defines how we get it done and it’s our values that ensure we do it the right way.

 

Values

 

Values are what we believe is important in life, guiding us in doing the right thing, and are essential to longevity in business. The key is knowing our values, communicating them clearly, and working with people who share them. There will be people reading this who know me having a chuckle right now, as I’m very frequently the first to ask “How does this fit in with your company values?” to challenge decision-makers who may not have fully thought through concepts. If someone asks that question, one of three things is happening:

 

  • The values haven’t been clearly defined or communicated.
  • The idea put forward or action taken doesn’t fit with the values.
  • The company values don’t fit with the values of the person asking the question (you hired the wrong person).

 

None of these three situations are good and I’d strongly encourage you to get to the heart of the issue urgently. Your business should have 3 to 5 clearly defined values that express the full meaning of what is important to you, not just a single word. If you say you value family, for example, it’s actually the love, support, caring, safety, and feeling of belonging to the family unit that you really value (or whatever family may mean to you). Set your values, stand by them, hire people that share those values, partner with other businesses sharing your values, work with clients that have the same values and your business will have incredible potential. There is a reason massive corporate entities talk about values but the ones that shine are the ones that live by them.

 

Laying your foundation

 

Vision, Mission, and Values form the foundation of a successful business. They allow you to create a business plan, create the right products and services, hire the “right people” and engage with your ideal client. With them the decision-making process becomes easier, the product and service offer stay true to your business, your people are empowered by clarity, trust becomes a given, and the experience you create for your ideal customer is outstanding. This is where many businesses are failing, they don’t create a strong foundation to build their business on. They start a business based on desired outcomes without the clarity and focus provided by knowing your vision, mission, and values, which leads to poor decisions, losing their way and ultimately the business failing. Regardless of whether you are starting or you have an existing business look to your foundation and give yourself the best chance to succeed.

 

 

Written by 

 

Michael Clift 

Founder|Business Coach

Venture Cultivation Coaching