Business essentials for small and medium business owners
January 12, 2017
Last year I decided that it was time to help teach my daughter her first lesson about running a business. She was six years old and we had more apples than we could eat or need to freeze for apple pies in winters. I figured it was a good opportunity to teach her some basics of starting a business and making a bit of extra pocket money in the process. I call these the Business Essentials of operation for any size business.
Without a lot of forethought – after all she is only six – I sat down with her to share some of the basic rules of being in business. I had never thought about this before but I figured how hard could that be? Really? I’m an accountant. I started and run my own business that has supported my family for the last six years. I work with business owners helping them do better in their businesses. This should be easy. Turns out, not so much!!
As I attempted to teach my daughter about running a business, I realised I couldn’t do it the conventional way because I was constantly having to explain the words and concepts I was trying to use. For those of you who have had children, you will understand that it’s pointless trying to explain too many things at one time because they’re a bit like Dory (the fish in Finding Nemo) and get easily distracted by more interesting things (“ohhh look … sand … I like sand …” and off she goes).
I quickly understood that the rules of running a business should be the same whether I am explaining them to my six year old daughter, my clients, or anyone else. They should be so simple that anyone gets it – the first time. They shouldn’t be bogged down in business terms that need further explaining. And they have to be true no matter what business you’re in, how big your business is, or where you run your business from. Whether you are setting up your first apple/lemon/melon stall with your dad at the end of your driveway, or you are Coca Cola selling drinks around the world.
Bearing this in mind, I came up with these three golden rules to running any business:
You need to sell a product/service people want to buy.
You need to sell your product/service at a price your customers are willing to pay.
You need to sell your product/service for enough to make a profit.
Respect these three rules and your business should be fine (hopefully better than fine). Break these rules and you’re going to find your business in trouble sooner or later.
I’ve written a whole book now based around these rules – you can find out more about that here – but the main point to my writing this book was to help clients I am working with and thousands more just like them to understand that these basic business essentials are what you will thrive, survive, or die by.