the 5 essential ingredients for building a successful business

quality ingredients are the recipe for successOne of the first businesses I helped launch appealed to a personal passion --  gastronomic delights.  I'm no culinary DaVinci, but learned early in life that at the core of every great dish is a blend of quality ingredients.  Creating a successful business is really no different, and here's my take on the 5 essential ingredients the business "chef" must incorporate into every masterpiece:

If people are hungry enough, they'll eat just about anything put in front of them.  Take away that hunger or lead them to a smorgaasbord, however, and they quickly gravitate to what they need and want most.  This behavior is very practical, and holds true for business.

The successful "business chef" understands this need to satisfy the practical, but gets his / her "dish" to stand out from all the others by being innovative or different in a meaningful way.  They get there from the passion they carry for what they do, by empowering their employees (instilling a sense of "ownership" in their roles) and never, never compromising on their standards.

A good chef understands you can't create a dish for 12 when you only have enough ingredients for 6.  A creative chef might be able to eke out an additional serving or 2, but if 12 is the number, he or she will head to market to get what's needed (or welcome that last minute cancellation).

Business is no different.   Effective bootstrapping is like the great chef eking out that extra serving or two.  In the end, it's no substitute for having enough ingredients on hand.

You're going to have to come up with the food analogy for this one!  Successful businesses understand that top-line revenue generation and customer focus go hand in hand.  The most difficult and expensive part of building a customer relationship lies in acquisition.  Successful businesses will "advertise" for impact.   They understand the distinction between "lowest cost" and "highest value."  They find ways to be memorable in the minds of their target customer.   This might mean being first, being different, or being daring.  

Once their customer is acquired, these businesses are expert at building repeat business.  They are expert at cross-selling other goods or services.  They are expert at leveraging the good will they have built up through these relationships to acquire more customers through word of mouth.  At the core of each is a customer-centric culture that naturally builds and sustains top-line revenues.

Even the Iron Chef can't do it all (you'll have to check out the Food Network if you don't understand this reference).

Successful organizations hire selectively.  Recruiting and retaining smart, reliable, coachable, and trustworthy individuals that "fit" into your culture is absolutely essential to your success.  On the flip side, nobody's perfect.  Being able to quickly recognize a hiring mistake and removing those who don't fit the bill is equally critical. 

Culinary masterpieces not only taste exquisite, but are often visual works of art.   Great dishes assault all the senses. 

Successful businesses pay similar attention to every detail.  They publish and enforce “Operations Manuals."  They operate under strict internal financial controls, monitoring and forecasting their cash flows religiously.  They never settle for "good enough" or compromise on their standards.

The specialty food store and café I helped launch contained all of these ingredients (some more than others).  We ultimately adapted our vision to respond to the needs of the marketplace, and successfully sold the operation to a new owner.  This new "master chef " should have been better suited to growing the business in the direction the market was taking it.  He stopped using several of these key ingredients, however, and recently ended his story on a less successful note.  The moral of the story?  My vote is "stick with the recipe."  What's yours?

celebrating small business week and some remarkable individuals

This week is small business week in the US.  Events have been scheduled across our nation to show appreciation for the hardworking, small business owners that represent the backbone of our local and national economies.  All this is well justified.  Besides the fact that small business accounts for over half of all private sector employment (creating 80% of all new jobs), the simple truth is that every small business in this nation is a living legacy to the American dream. 

The range of skills needed to successfully operate a small business are really quite remarkable.   Most start with an idea and little more (rarely are new small businesses sufficiently capitalized).  Owners must be creative with their allocation of resources, always doing more with less.  They must also be prepared to wear many hats :: they are the cleaning crew, the bookkeeper, the HR person, the marketing department, and the sales force,  just to name a few. 

The perseverance needed to successfully operate a small business is even more remarkable.  Small business owners fortunate enough to have employees continue working long after everyone else has punched out.   During the early stages of a company, most are the last to get paid -- if they get paid anything at all.   Most must breathe, eat, and live their business every waking hour  just to keep their companies from collapsing.

Through all these challenges, these entrepreneurs' ultimate success inspires everyone around them.   We admire these people who embrace risk and work to create something new.  So this week, think of your neighbors who are either owners or employees of small businesses.  These are the folks who pay local taxes, employ family and friends, donate their dollars and time to charity, and support other local businesses that make your community special.  Celebrate the American dream by doing your part to keep a big piece of it alive during these troubled times.