In order to run a successful business, one that generates solid profits year after year, you will need to be do several things right day after day, week after week, and month after month. You will need to keep your costs down, meet customer expectations and avoid major mistakes. You will also need to consistently meet four critical success factors: follow a sound strategy, set the right priorities, hire a committed staff and have a strong self-discipline.
Success starts with a sound strategy. You need to be chasing work that you have a competitive advantage for over most of your competition. Your competitive advantage might come from a lower cost structure, superior customer service, job cost knowledge, better skilled crews, superior equipment, or unmatched selling ability. Your strategy must leverage your strengths. A common mistake is trying to follow in a competitor's footsteps. You are not your competitor. If your competitor is successful it probably is due to a competitive advantage he developed over time and one that you don't possess.
One of the best ways to develop a sound strategy is to change the game. Approach the market differently than everyone else does. Think outside the box. What client needs aren't being met by your competition?
Here's an example. I heard about a lawn care man in my home town that makes six figures working by himself. His typical customer is a doctor or highly successful business owner who wants his yard to look perfect. During the fall, this contractor runs by almost every one of his clients' houses daily and pulls leaves from their bushes and gathers them up from their yards. Every day he makes sure their yards are immaculate. His clients pay huge money for his services because no one else in town will go to the extreme lengths he does to keep a yard looking perfect.
This is what I mean by following a sound strategy. If you run your business with a weak strategy you will not be consistently profitable.
Straightening up our clients' priorities is something Guy and I do frequently when coaching. For some reason, contractors often spend large amounts of time on the wrong tasks. The confusing part for them is that the tasks they are spending time on are tasks that need to be done, eventually. Managing time effectively means knowing which tasks are the most urgent and have the greatest impact. In plain language, don't sweat the small stuff.
Focus on the big picture items. If you have a project going south, dive in and get it back on track. If you have an upset client, get on the phone and take care of the problem. If you have a staffing problem, fix it as fast as you can. When possible take the time needed to establish effective systems, document them and train others on their proper use.
Remember, you don't have enough hours in the day to do everything you'd like to do. Focus on the most important and critical tasks. The others will take care of themselves or vanish into thin air.
This is hardest one of the four. You fully control the other three. You don't have full control over this critical success factor.
Unless you are the lawn care guy who is working alone, you will have to rely on others to do their jobs well. Staffing is no place for penny pinching. Hire good people who possess strong work ethics and sound decision making. If you have ever experienced the joy of being able to delegate a task or project to someone and watch them carry it out perfectly without further assistance then you understand the staffing goal. You need to hire people who like to work, who understand customer expectations and are committed to meeting them, and who treat your money as if it was their money.
One of the many benefits of having a committed, hard-working, talented staff is that you save a ton of time in hiring, coaching and firing. Turn-over is a first degree murderer of time. Few things mess up a project or the business faster than losing a key employee right in the middle of it.
Hire good people. Put them in jobs they can do well. Encourage them and thank them for work well done. Pay them fairly for the impact they make. Your staff can be your best friend or your worst enemy.
Self-discipline is absolutely necessary to running a business successfully. For that matter, it pretty much is the dividing line between successful and unsuccessful businesses.
Self-discipline means managing your emotions and focus so that you are using your time productively. It means fighting yourself over bad habits. It means keeping your temper in check as needed, working extra hours as called for and staying true to your strategy when attractive opportunities present themselves that don't fit your strategy. Self-discipline is something most of us struggle with. The trick is to hold yourself accountable to a higher standard than you hold everyone else accountable to. Face it, self-discipline isn't fun, but it sure can be profitable!