If you own a small business or want to own a small business, this article is for you. More than 80% of startup businesses fail within five years. As an entrepreneur, business plan writer and coach, I often ask why businesses have such a large failure rate. I also ask what successful business have in common that allow them to succeed.
At the basis of every business is a root idea, a core vision, a philosophy that sets in motion how you operate, how your employees operate and how this affects sales. For instance, if you are a sloppy person or unfocused thinker, your business will be sloppy or unfocused too.
Businesses that work know the business. They develop systems and train staff rooted in that knowing. Successful companies hire managers employees who are aligned with the company roots, its core ideology, how everything works within the business. Because of this alignment, they are empowered. They are clear about what they do because the foundation is so clearly laid out. Michael Gerber’s book “The E-Myth: Why Most Businesses Don’t Work And What To Do About It” talks about this in terms of how success comes from developing a turnkey operation. This can only happen if you know your roots and develop a system that supports expansion.
The problem is that most people start businesses not as entrepreneurs but as people who have become fed up with working for someone else. They believe that they can do the job better than the company they were working for. Some people go into business because they love to cook, sew, clean, invent things, etc. But just being a good cook, for example, does not naturally extend to opening a successful restaurant.
Good cooks who succeed in the restaurant business usually partner up with restaurateurs, thus allowing each partner to focus on their own root skills. If we continue with the restaurant example, let’s assume the expert cook does not have a partner who knows about running a restaurant. In this case, it becomes very important to hire staff who can support this. I am not suggesting that the cook should not expand into other roles, but I am suggesting that knowing your root skill is akin to knowing your core competence. When you know your own core competence, you can build a business that supports everyone aligning to his or her own core competence. When everyone in the business is aligned with their roots, the business has a much more solid chance of survival and success.
Originally posted in Parvati Magazine.