Small Business Success Factors
Successful Entrepreneur Manages People, Process, Product, Profit
Aug 12, 2008
In many North American and European corporations, profit is regarded as the ultimate goal. Management chooses a product or service they think can generate a profit, and hires (or fires and replaces) people to do the job.
By contrast, the most successful organizations place importance first on the people. They hire and nurture people who gain satisfaction, even fulfill a passion, from exercising their talents to produce a product or provide a service.
Their work is organized into a process that evolves as success grows in developing and selling products or services.
David Packard, cofounder of Hewlett-Packard, one of the world’s most successful businesses, has said, “Profit is not the proper end and aim of management — it is what makes all of the proper ends and aims possible.”
These principles are important especially for a small business, where the team of people is tightly knit.
People's Career Aspirations
The people in the business are its best assets: its talents, knowledge, experience and skills.
The business owner must hire each person not only for how his or her skills and talents complement those of the team. The owner must also ensure that each person is dedicated to developing and supplying the products or service, and to serving the needs of the people in the company’s target market segments.
Loyalty to the firm is important for the business to retain employees, but in the modern work culture people change jobs often for self improvement. Employees must see that they are achieving their goals and aspirations and following their chosen career paths within the small business, if the business is to hold on to their talents.
Processes for Business Success
The process defines who does what and in what sequence to perform functions such as:
- Decision-making;
- Identifying potential clients or customers;
- Developing products or services;
- Acquiring parts and materials;
- Assembling products;
- Performing services;
- Developing strategies to bring products and services to market.
There is no room, says leadership consultant and coach Jim Clemmer, for a “that’s not my job” mentality, which causes important tasks to remain undone. Processes must be fluid, so that everybody does what is needed.
On the other hand is the risk that people will spend too much time on tasks which do not use their skills effectively. An inside sales person, for example, shouild not become a general office assistant for outside sales people.
It is important to maintain a balance, so that tasks are done by the most appropriate people. Processes must be reviewed constantly to see what works and what needs improvement.
How to Choose Product or Service
In the choice of product or service, the questions to be answered are:
- What gives employees satisfaction; what fulfills their passion?
- What helps customers or clients achieve their passions or (more importantly) solve their problems?
If the product or service is entirely new, the company will have costly pioneering work to do to introduce its concept to prospective buyers. Potential buyers will be much fewer than for a type of product or service people already know about from competitive suppliers.
Many businesses find success by choosing to start by producing products that have competitors, and to differentiate by quality and functions. Only if the product is a commodity would the business differentiate on price.
Profit - Success and Survival
Profit is the measure of the company’s success, says Dr. Tony Fattal, business author, educator and proprietor of Tesle Enterprises. It pays for growth, keeps the company solvent in down times and gives the owners the wherewithal to share success with employees.
No company ever succeeds without growing. Profit equals survival.
Every business lives and dies on its people. The process maximizes employees’ effectiveness. The product or service is what they do to make their working lives meaningful. Profit is what makes it all possible.
