I recently read a Forbes article by Brett Nelson which resonated with me as an author. He talked about the difference between those who made it in business and those who didn’t. He believes this comes down to three basic categories of fundamentals and the relentless pursuit of them by those who know what they were doing.
It resonated with me because as an author, I am well aware that there are only seven basic plots in storytelling – universal story plots that are used over and over in movies, novels, and effective storytelling generally. In case you are interested, they are:
- Overcoming the monster (think Starwars)
- Rags to riches (think The Wolf of Wall Street)
- Voyage and return (think The Wizard of Oz)
- Quest (think Raiders of the Lost Ark)
- Comedy (think The Castle)
- Tragedy (think Dorian Gray & Shakespeare)
- Rebirth (think A Christmas Carol)
So, according to Nelson, the fundamentals of business fall into three categories (I liked this notion) which he calls:
- Under the hood (think strategy, competitive edge and financing)
- Eyes on the road (think operations, management, and personnel)
- New gear (think growth and how to maintain it)
So he identifies the 23 most important questions which all fall under the three categories and he goes into the details of each of these. He also mentions that even if you think you know the answers to these basic questions, it’s well worth your while to revisit them, and to reconsider your answers to them carefully, repeatedly and in great detail.
Of course, many of the references are American (as you would expect on Forbes and I was amused when one of his most crucial questions involved having a good lawyer), but there are takeaways for businesses right here in Canberra.
For me, the most important questions boiled down to three in each category (some of which I combined) and I will comment on each of them in an Australian context.
Under the hood – takeaways:
1. How committed am I and what’s my appetite for risk?
The reason businesses don’t last long is that business owners really have not thought it through in terms of the level of their commitment. What would you do if your back was to the wall? Could you hack it if the business was going so badly that your reputation was at stake? Could you actually hack the stress of the ups and downs, the famine and feast that business often serves up? Many entrepreneurs go into business with stars in their eyes and with no real idea of just how tough the business world can be. They find out too late that they can’t hack it.
2. Is my product/service a real business?
It amazes me when I ask brand new business owners how they make money and many of them (incredible as it may seem) don’t know the answer to this question. Without a realistic plan, they are just “playing on the fringes of business” and not really in business at all.
3. What differentiates my product/service from my competitors?
Many do not even research this before they open the doors – they have no idea of who their competition is, and often not even of potential clients who might like their product/service.
Eyes on the road – takeaways:
1. Am I measuring the right things?
It is quite common on social media to measure efficacy via the number of Likes on Facebook or followers on Twitter. These do not necessarily convert to sales or dollar values. One needs to be very clear about what exactly is worth measuring and many don’t know the lifetime dollar value of a client.
2. Do I have the right people?
This is by far the most problematic issue for growing businesses. Often operators have to learn the hard way, through bitter experience of mistakes made in the hiring process. This was the biggest issue for almost all of the people I interviewed for my Canberra Business Success Stories book.
3. Are my incentives aligned with my business goals?
The best businesses incentivise their staff and understand the basics of human psychology. They adopt a win/win/win approach to the way they do business and work with staff to make the customer experience the best it can be. The business owner benefits, as do the staff and the customer.
New Gear – takeaways:
1. Am I thinking big enough?
This does NOT mean that you will take huge risks – in fact, most successful entrepreneurs only take measured risks, but it is more about thinking what is possible now and in the future. Is the business scalable?
2. Am I truly harnessing technology?
In today’s digital trends of the ubiquitous growth of vodcasts, podcasts, and mobile apps, it is important to keep your finger on the pulse and adapt in a considered fashion – but beware – “just because you can, doesn’t mean you should” is a good rule to go by here.
3. Can the business function without me?
This is the biggest question of all in the growth category and one that you should be aiming for as a true entrepreneur. After all, why would you put yourself through all of the hard business-building journey, without having an exit strategy? This one is to keep in mind from the very beginning as well.
You know, my favourite saying about true entrepreneurs is this: “Entrepreneurs are those who do today what others won’t do, to live tomorrow like others can’t”, and my research confirms that this is the case. So the ultimate question you need to ask yourself is – are you truly up for it?
And just like fiction writers need to be aware of the fundamental seven stories, business owners need to be aware of the fundamentals of business and pursue them with the relentless sharp focus if they are to grow and have their businesses flourishing.
By the way, if you’d like to read Brett Nelson’s article, here is the link . I highly recommend it.
Would love to hear your take on it.