The Foundations of Business

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Regardless of the business – big, small or corporate – one thing is certain. If the foundations of the business are not strong, cracks will appear under pressure. Pressure can manifest at any time – at the beginning, as you try to launch a business concept; after early success, as you try to capitalize on early growth but expand too fast; or as your struggle to compete in a fast changing environment begins to erode your bottom line. Whatever the circumstance, if you don’t have the business foundations aligned and strong, the cracks will show. 

So does this mean your business is doomed to fail? Not necessarily! There are some key factors that will make a difference: 

1. Whether you are aware of what’s happening; 
2. Whether you have the skills, knowledge or team around you to help you get back on track; and 
3. How long your business can afford to paper over the cracks before they bring you down. 

Suffice to say, the bigger and more resource rich the business, the longer the cracks can be absorbed and hidden. Ultimately though - not getting these foundational blocks right will impact any business, big or small.

So do you know what the foundations of your business are? And how do you make sure they are rock solid? Business foundations – What are they? In my 20-plus years in business, I have found  that regardless of industry, sector or size, there are four basic foundations that are the difference between business success and failure:

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Foundation One: Clarity

Put simply: this one is all about knowing your ‘what’, ‘why’, ‘how’, ‘who’, and ‘wow’.

1. Your ‘what’:  what is your vision or goal for your business?
2. Your ‘why’: this is your purpose - your drive and motivation. 
3. Your ‘how’: how do you add unique value?
4. Your ‘who’: who is your unique customer?
5. Your ‘wow’: how can you take this information and use it compel your target market to buy your solution? This is an extension of what makes you or your business unique and compelling to your target audience.
   
   

For smaller businesses, particularly if you are the founder, you will find these questions may apply to you individually as much as to your business. In fact they may be the same. This is very common for entrepreneurs, as their business idea is usually founded in their unique ability and passion. For larger corporates, this process still applies. This will probably be more evident in the culture of the organisation - how you motivate and attract the right people to the vision and purpose. Whilst nearly all businesses would protest that they have absolute clarity on all these points - and almost scoff at the ridiculousness of how ‘obvious’ this is - you may be surprised at how many businesses, large and small, cannot answer these questions succinctly or in plain English.

How do you know if you have an issue? Ask yourself each of these questions. Be specific. You can’t use any generic words, nor can you take more than 20 seconds to describe them. Consider this - If a stranger asked you what your core message was in 10 words or less, could you answer them?

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Why this is important

Lack of clarity can manifest in multiple ways - remember that this is our first foundation for everything else in the business. Look at these examples:
Your vision or goal for the business isn’t clear.

• For example: ‘I want to sell the business’ versus ‘I want to get the business to a point where I don’t have to get involved operationally and can earn a passive income.’The first statement is vague and without clarity. The knock on effect of this is that your next layer - your strategy - will be confused and vague. You will make reactive decisions as a result, and go down many rabbit holes along the way. Your unique value proposition isn’t clear.
  
• For example: ‘I am a business coach.’ This is such a generic statement that you will never be able to define your target market or create a compelling message for them. This will impact your marketing, your brand, your product, and your success.
  

Bottom line - if you don’t get crystal clear on the very basics, you will struggle to have sustainable and profitable success. This is surprisingly hard to do by yourself, as founders in particular struggle to examine this objectively and distil their message into simplicity.

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Foundation Two: Structure

This is how you take your vision, purpose and unique offer and turn it into a profitable and sustainable business. To do this successfully, you need the right tools, know-how and ability to implement your plan. A great analogy is being a designer of furniture - you are clear on what you want to build, why you want to build it, and why your prospective client will buy from you and not anyone else. But can you actually work out the resources, tools and skills you need to turn the design on paper into a physical object?

Knowledge & tools

Do you know what the next step is in turning your vision into a sustainable business? Do you know which frameworks or systems you need, and how to use them? This doesn’t need to be hard, but - without the right knowledge and skills - will seem like an impossible task. 

There are some critical pieces of the puzzle that you will need to figure out if you want to turn your vision or idea into an executable business. Ask yourself:

• Have you clearly defined your strategy, with measurable time frames and clearly defined measures of success
• Have you taken that strategy and broken it down so you have achievable goals that you can measure?
• Have you identified the key metrics (for example, the financial and customer measures) that you need to track for your business?
• Do you have a system in place to measure and track progress against those key metrics?
• How effective are you at implementation? Actually delivering stuff?
• Do you effectively keep yourself, your staff and your business accountable to progress?
• If you don’t do these things - do you know where to start? 
  

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Foundation Three: Environment

This is where your strategy and business will either come to fruition or remain a ‘nice idea’ and a heap of detailed spreadsheets. In this context, think of your environment as a combination of physical environment, culture, mindset and habits. This is how you spend your energy, time and focus. It’s where you ensure that you and your team are operating at the maximum level of effectiveness.

This may sound straight forward, but think for a second about your current environment: 

• Are you reacting to lots of distractions every day? 
• Do you have a ‘to do’ list that gets longer and more impossible? 
• Do you run out of time? 
• Do you get overwhelmed?

Now apply those questions to your team, if you have one. If the answer to any of these questions is ‘yes’, then you are wasting the most precious resources you have - your time, your energy and your focus (and that of your team) - because your environment is not set up for success.Even if you have the first two foundations sorted, this is where you will still fail to implement and move forward. If you don’t get this right, all your great ideas and planning will go to waste.

Some things to think about:

1. What are the Top 5 things you should be doing each day?
2. What is your unique ability, and what are you doing when you are in that zone?
3. How are you getting rid of the ‘noise’ and focusing only on the things that will transform your business and achieve your vision? 
4. Are you outsourcing all the transactional and distracting things you are doing?
5. Are you investing in specialist expertise to complement your own?

Environment is about so many things, including the ability (or lack thereof) to limit distractions and use your unique skills to the best of your ability each and every day. Many business owners say that they want to ‘retain control’. This is their excuse for holding on to all the operational and transactional ‘noise’ that they aren’t even effective at, and becoming distracted from what is really important - the ‘transformational’ things that only they can do, and which are essential to progressing the business. Continue to remind yourself what you are great at, what will progress your goal and where your focus should be. For everything else, outsource and partner. If you get this right, execution of your vision and your plan will feel effortless.

Top Tips 

• These things are the foundations and strength of your business – it is critical you get them right.
• If you don’t have a clear picture of your foundations, it’s only a matter of time before the cracks in your business start to show.
• No matter which specialist you engage or what goal you have - you will be asked about what your vision, strategy, business model and success has been.
• Once your foundations are aligned and solid, you can then take your business wherever you like. This is where you get to amplify your message, create value for people and leverage what you have to its fullest potential.

Remember… 

Clarity. Structure. Environment. Then, you can amplify.