This article is called The Top Five Things To Do To Be Successful in Any Business, but I’m actually going to give you six critical things you must do. I have run many companies, all of which have been profitable, going all the way back to my early twenties. I’ve been a six-figure entrepreneur for most of my life and a business consultant for 25 years. I have literally worked with hundreds of companies, so this is something I know a little about.
There’s a concept called Key Result Areas. If you learn this, it will change your life as it changed mine when I learned it about 20 years ago or so. Here it is: In any particular skill set—sales, business, dating, whatever—there are at least five to seven things you need to be good at in order to get results in that area. If you’re talking about managing long-term non-monogamous relationships, there are five to seven things you need to be good at. The same applies to business, online dating, having your own business, investing, and anything else.
Today we’ll discuss the six most important things, and at the end, I’ll tell you which is the most important for business longevity—something that will keep your business alive and profitable for a long, long time. Most businesses go out of business very quickly, so if you want yours to survive, you have to do the sixth thing on this list.
Keep in mind: I have numbered these, but they’re not listed in order of priority (or anything else). You need all six to some degree. They’re all important.
1. Customer satisfaction
How well do your customers like you? How well do they like your product or service? How do you handle customer complaints? Do you get a lot of referral business? How much repeat business do you get? Are your customers talking about you in a positive way to other people?
All these things can be traced back to customer satisfaction—not customer service. That’s a subset of customer satisfaction. The better you do in customer satisfaction, the fewer customers you need in order to make a high income. The beauty of consulting, for instance, is that you only need a few big clients to make a lot of money. If you sell high-margin products or services, you don’t need that many customers if they really like you, do a lot of repeat buying, and refer you to others.
You must be at least decent at customer service in order to make money as a business owner. It’s extremely important.
2. Economic gain
Are you making money? Are your profits high? Are your sales high? Remember, there is a distinct difference between profit and gross sales. A lot of business owners screw that up. Are you good at controlling expenses? Do you have profit at the end of the year? Are you good at managing your internal expenses? How’s your debt looking in terms of your credit lines? Do you review your profit and loss statements on a regular basis? Do you know which of your products or services are the most or least profitable? Do you know how much money you’re making per project?
All these things are critical! You need to make money, but you need to know for a fact—and see in black and white—that you’re making money. I have worked with a lot of business owners who thought they were making a lot of money, but once we dug into the numbers, we found out they weren’t making much at all. In some cases, they were even losing money because they didn’t know what numbers to look at and didn’t know how to run their own damn business.
And of course, you have entrepreneurs who don’t make any money because they don’t want to sell or market because it’s “beneath” them. That’s stupid. Make money and know you’re making money. Economic gain is a critical component of being successful in business.
3. Product quality
There’s a lot of confusion about what “quality” means. “Quality” does not mean fancy; it doesn’t even mean robust. It means one thing and one thing only: Does your product or service do what you say it does? That’s it. If it does, that’s quality.
A McDonald’s hamburger is a quality product. What?
Yes! In terms of a burger you can buy for $1.50, a McDonald’s hamburger is high quality because it tastes good and it’s an environment that’s reliable. If it wasn’t these things, you wouldn’t have a McDonald’s in every city on planet Earth. McDonald’s is a high-quality business for a business that sells burgers that cheap. If you want something fancier, you’d go to a more expensive restaurant and pay $8 or $12 for a more fancy burger. Maybe it’s quality and maybe it isn’t; it depends on the restaurant.
But you see my point: Quality is whether your product or service does what you say it does. A second important question is, “How often?” Does it do so every once in a while? Does it do it two percent of the time? That’s probably not good. No product will probably do it 100% of the time; that’s not something that exists in the real world. But it should do it the vast majority of the time.
I sell a quality product. If you look at some of the original versions of the Blackdragon books I sold back in the day, they’re full of typos. A very small percentage of my audience was very angry at me because the books had typos—but it was a quality product because if you followed the advice they contained, it would work for you. That’s quality.
Now, that doesn’t mean you want your production to be shoddy; obviously, you want to clean that up (as I eventually did with my books). But you get my point.
Another aspect of quality is: How does your product or service perform as compared to your direct competitors? If you follow my advice, you’re going to niche, and ideally, you’ll really be the only person in that niche, which means you won’t have much direct competition.
4. People building
Are you managing, encouraging, inspiring, and working with your employees, suppliers, and vendors so they produce the best work for you? How good of a manager are you? How positive of a person are you to work with? How well do you manage your employees’ to-do items? How well are the people you work with doing in your business? How could they do better, and how could you help them?
These things are critical. Now, if you have a one-man show where you never hire anyone or outsource anything, that’s fine, but that’s extremely rare, and you’re not going to make as much money as you could. You’re going to need to outsource at some point, and you need to be able to manage people correctly. This is a key result area, and I personally know some guys who are really good business people selling a high-quality product or service, but they’re terrible managers. They’re limiting their growth, and they’ll never make the kind of money they should because they don’t know how to manage. You must get good at this.
Once you get to a big income, you can actually hire a business manager so that person can manage your staff for you. But when you’re ramping up, you’ll have to do this yourself to some degree. And even if you hire managers, you have to know how to manage the managers. So there’s no escaping this as a key result area.
5. Organizational Development
How well does your overall business function? Does your business have a regular set of benchmarks, quarterly objectives, and overall mission that everyone is working toward? Are the people who manage your business in harmony with your objectives? Are the things you’re doing on a weekly basis in harmony with those objectives?
Are the right people in the right jobs? Sometimes people have great skills but would be much better suited somewhere else in the company—or maybe not working for you at all.
Are people aware of the overall mission of the business? Do you remember it yourself? Business owners often forget it themselves! You need to have an organizational structure where the whole business is geared toward moving in the same direction. If you don’t know how to do that, you better get good at it fast, because it’s going to be a mess once you get to the point where you’re outsourcing and hiring people.
Innovation means creating new products and services for your customers to purchase from you based on the things they need. This is the most important of the key result areas.
Are you constantly in R&D? Are you developing new ideas and new techniques you can sell to your existing and/or new customers? Or are you like the typical business owner, who only has one or two things to sell? People like that make a lot of money at the beginning, but then sales peter out because they don’t have anything new to sell, and the company tanks.
You should be constantly developing your audience and feeding your audience things they want based on things they ask for. Most business owners are really good at building two or three products or services, but then they don’t want to do anything else. Those are the businesses that generally go out of business relatively quickly because they don’t know how to innovate within their own company. You have to listen to your customer base and find out what they need and give it to them. You should be constantly doing this over the long haul, and this will ensure you’re in business for a long time.
Now that you know the six key result areas, you need to rate yourself. Rate yourself on how well you do in these six areas from a scale of 1 to 10.
The good news is, you don’t have to be amazing at all six of these things, you just have to be decent. I do very well financially with my businesses, and clearly, I’m not perfect. But you don’t have to be perfect; you just have to be building these six things all the time. You might be very good in some of these areas and weaker in others. That’s when you need to outsource to help bolster that weakness.