What is there within business to think about? Hmm, let’s have a think…everything! Your job as a business owner is to decide what your business is going to do, for whom and how it’s going to go about doing it. Fairly straightforward brief, but incredibly involved. The only problem now is finding the time to do all that thinking and getting hold of the fuel (the information) needed to keep those ‘management thinking’ fires burning. With only 24 hrs in a day, that’s going to be a tough job, so let’s apply a little thinking to organising the thinking shall we?
Without information, a decision is a guess
Prioritisation and delegation are vital skills for any manager, but especially for a business owner. Yes, you can do all the thinking yourself, but as mentioned above, there are only a certain number of hours in the day, and there is only one of you and you have to sleep. So, everything can’t be done at once; you’ll need to be organised and you’ll need some help.
Remember that management is about making decisions and that the only difference between the manager of a team of two and the manager of a team of 2,000 is the value of the decisions that they make. As a business owner, your decisions will, by definition, have the greatest associated value. After all, your decisions can affect the entire business, the entire operation, the entire workforce. There are decisions within your business that have high value and those that have lower value. Which are the ones that you absolutely must be making and which can be delegated, do you think? Decide. The ‘absolutes’ are your responsibility, the rest you can give to your team members.
Once you’ve sorted out who should be managing (thinking about) what, prioritise those tasks; what needs to be done, when and by whom? You prioritise your own list of tasks and let your team members prioritise theirs. Obviously, I’m not suggesting that you abdicate your responsibilities and let your team just go ahead and do what they want. Offer guidance in the form of a plan that you’ve thought through, which prioritises what must happen to get your goods and services to your customers.
The plans that you come up with during your thinking must include ‘policies’ to which your business, your team and you all adhere. ‘Policies’ is just a shorthand way of saying,
‘A set of ideas or intentions regarding what to do in particular situations that has been agreed to officially by the top management of an organisation.’
In the case of your business, the ‘top management’ is you. So, it is you that sets the top level policies within your business, you that set the tone for your business, and it is these policies that cascade through your organisation via the management meetings that were described in section 3.1, above.
Let’s start at the very top and set your main business policy; the mission statement that will guide everything that your business does. A ‘mission statement’ can be defined as:
‘A statement of the main purpose of your business; the reason that it exists.’
Now, as stated before, ‘If it isn’t written down, it’s a rumour’, so your mission statement must be in the form of a written declaration of intent to which everyone inside and outside of your business can refer. If your mission statement is well thought through, it will help you, and everyone associated with your business, to determine what it is that’s important and what can be labelled ‘a distraction’. Also, it will define the markets that you intend your business to serve and how you intend to go about doing that. Its final job is to provide an overall sense of direction for your business.
Your mission statement should tell the world why your business exists
Before we move on, a warning: don’t just come up with a mission statement or a load of policies without thinking through the consequences. If your mission statement includes a commitment to treat your customers with respect, don’t refer to them in a negative way within your organisation. If your mission statement includes a commitment to equal opportunities, don’t be an idiot and denigrate minorities within your workforce. A policy without a mechanism to deliver it and measure it is just a lot of hot air. Your people will look at your mission statement and then your business ethos and behaviours, and if they don’t match, they’ll, quite rightly, assume that you’re full of it; sorry, make that a poor manager. So, make sure that your policies include a mechanism for delivery, or at least have an obvious implication for behaviours within your business and then live it; behave in a way that matches your aims.
Right, let’s get on with deciding what the main aim of your business is going to be. We’ll use an example to illustrate the point, but you don’t have to stick rigidly to this formula. As long as you have a purpose for your business, a mechanism to achieve it and a way to measure (confirm) that achievement, then you’ve got what you need to increase the chances that your business will survive.
Here’s an example of a mission statement for your business:
Being the leading provider of goods/services in our market sector.
Fair enough. Wanting to be the best at what it is that you do is understandable and laudable. However, if this is as far as your thinking goes, then it’s just a lot of hot air, as I said. How exactly are you going to achieve that aim? That’s what’s important. So, you could write it like this:
Being the leading provider of goods/services in our market sector by being cheaper than all our competitors.
Now you have a mechanism to achieve your main aim. ‘Cheaper’ might be the right thing to do, it might not. Hopefully, you’ve done some measuring (asked around your potential customer base) and have had lots of agreement to the idea that if you are cheaper you’ll get their business. However, being the cheapest may not be the image you want to portray for your business. So, how about:
Being the leading provider of goods/services in our market sector by making better goods/services than our competitors.
gain, there is a mechanism that gives you the potential to achieve your main aim, but this time the emphasis is on ‘better’ rather than ‘cheaper’. If this is the way you want your business to go, then think it through and make sure that you have a way of ensuring that you can deliver ‘better’ or your mission statement loses much of its value. How about this alternative:
Being the leading provider of goods/services in our market sector by being faster than our competitors.
Everyone is busy, no one has enough time, and everybody wants it now, whatever ‘it’ might be. Too busy to go out shopping? Use the supermarket’s website and they’ll deliver to your door. No need to leave your own home. Not got enough time to make a decent meal when you get in at night? Call the take—away and it’ll be with you in minutes. Please note that the above are examples and are not meant to be endorsing a sedentary lifestyle with poor diet! Just so we’re clear. However, as with ‘better’, if you are looking to provide goods and services faster than your competition, then you must have a way of doing it.
Obviously, there is no right or wrong here, the decision is yours. There are many businesses that do well by offering goods more cheaply. There are many businesses that do well by being more expensive, but providing goods and services to very high standards. There are businesses that trade on the fact that they are the fastest. There is room for all the options, you have to decide which one is for you.
Quick tip: You can’t give the customer what the customer wants if you haven’t bothered to ask your customers what they would like. A statement of the obvious, you might think, but producing goods and services that no—one wants is one of the oft—cited reasons for why start—up businesses fail. What seems like a great idea on paper turns out to be a one—way trip to the failure abyss when the potential customers are presented with the business’s output. Find out if there are customers for ‘it’ before you set up your business to provide ‘it’.
So, you’ve determined the purpose of your business and the way that it’ll fulfil that purpose, but that is only the beginning. You’ve now got to work out what has to happen within your business, in which order and what each person has to be doing in order to make your business work. The good news is that the more effort you put into your thinking in the early stages the greater the chance that your business will survive the early years.
Download a template here
When you have filled in your template, click on the briefcase to store the document and add any notes about it in your notebook.
Right, so you’ve got your mission statement, defining what your business is going to do and for whom. Now you need to work out which parts of your business must be doing what in order to deliver on the promise of your mission statement.
Targets are crucial. How can you hit something that you haven’t got?
One of the many things that you have to plan is what you want the dials on your dashboard to be reading. We’ll cover your business numbers and your dashboard in more detail in chapters 4 and 5, but your general thinking about such has to start early. You must decide which numbers are going to be important in your business, and make sure that your systems are giving you accurate data. You must also decide what you want your dials to be reading. To use a driving analogy again: you need to be able to look at your dashboard and see that your speed matches the conditions in which you are driving, that your fuel consumption means that you’ll be able to make the journey with the fuel in the tank, etc. In your business, this is done by setting targets.
In the same way that we looked at setting a highest level mission statement for your business, you must set your highest level targets. In other words, what do you want your business to achieve overall? Do you want to sell a certain amount of goods and services this year? Do you want to launch new products? Enter new markets? Pay back that business loan by the end of your first year’s trading? This is important because if you don’t have a destination, you’ve no way of telling that you’ve got there, and your targets tell you when you’ve arrived.
Without a target, an expectation, you have no way of measuring your success. Think of this as the destination of a journey, and setting up a business is certainly a journey. Planning to visit Paris? Having dinner within sight of the Eifel Tower tells you you’ve made it. If instead, you are gazing at the Great Pyramid of Giza, then you’ve taken a wrong turn.
So, setting your highest level targets, which is you deciding what you want your most important dials on the dashboard to be reading, leads on naturally to your next level of targets You know where you want to be in say six months to a year’s time, so how are you going to get there? Set quarterly targets for your team based on the highest level targets (or goals, or objectives, call them what you want) for the organisation. Bear—in—mind that your targets may have to be translated for communication to different levels of your business; what makes sense
Download a template here
When you have filled in your template, click on the briefcase to store the document and add any notes about it in your notebook.
Thinking requires information and the better the quality of that information, the better the thinking. But in business, we’re not particularly interested in the philosophical quality of the thinking that is done; we’re interested in the output. Thinking produces ideas and those must be captured in a form that can be used to move your business forward. The output of thinking is known as a plan. So, we’ve covered thinking and how it’s important if you want to increase the chances of your business surviving its early years and now we’re going to have a look at your plans.