Wishing You Success
by Rick Leibowitz (August 2006)
If you read through enough business start-up books and business assistance websites, you will come across all sorts of case studies and profiles of successful entrepreneurs. Driven, energetic, outgoing, creative are just a few of the descriptors that you will note as they try to find the common denominator of those who have had success.
I have never been one to pay much heed to those studies and profiles. Everyone has unique characteristics, skills and personalities. In my years as a business counselor and business owner, I have met many small business owners who do not fit some of the classic profiles for success. I have met many successful shy and introverted entrepreneurs, some who may even be considered laid back and not very energetic. Many of them would laugh at me if I suggested that their success resulted from their creative skills. Obviously, the reason we don’t hear about these successful business owners is because they are shy and introverted and some people do not have the desire to share their stories of success. They just quietly go about doing what they love to do.
To survive in business, there is no particular profile for success. I do believe there is a simple model to consider -- You have to have the skill to fulfill customer needs. To generate income for your business you will need to have customers. To have customers, you need to give them something that they want or need. Economists call this “demand.” It doesn’t matter how skilled, talented or creative you may be; unless there is enough demand for your product or service, you will not be able to survive.
Some people recognize this and start businesses based on specific market needs that they have identified. Still, success will only be achieved if those business owners have the skill to bring those products or services to the marketplace.
It is also critical to understand that skill is not specific to your ability to bring a product or service to the market. I think the best definition of the skills necessary for success was outlined by Ernesto Sirolli in his book, “Ripples from the Zambezi.” He has developed a “Trinity of Management” concept that contains the three management areas every business must master to survive. They are:
Operational Management: This would reflect on your ability to effectively deliver products or services to customers. Operational management includes areas such as production management, systems development, vendor management, negotiating skills, inventory management, risk management, personnel management, shipping/receiving and many of the other facets directly related to product or service delivery.
Marketing Management: As noted earlier, every business must have customers and developing a good product or service does not guarantee success. Marketing management involves market analysis skills in assessing demand and the ability to do a competitive analysis to develop a positioning strategy for your business. Another component of marketing management involves creating an advertising strategy, which includes issues such as branding, message development, choice of advertising mediums (media mix) and measurement of response.
Financial Management: As I wrote in a previous article, it is good to look at a business as an organism that survives on the circulation of positive cash flow, grows by having profit (more income than expenses) and is measured by its net worth (Net Worth = Assets – Liabilities). Financial management is simply tracking the performance of your business. It begins with bookkeeping, which is assigning accounts to the money that goes in and out of your business and establishing a system for measuring the key financial factors that will determine the success of your business. This would include managing cash flow, understanding the key ratios and margins that tend to indicate success in your industry and establishing budgets for operations and growth.
Note that I commented earlier that your business must have someone to meet these three management areas and it is unreasonable to expect any one person to excel in all of these areas. Remember, you are a unique individual and you may have your own strengths and weaknesses in each of these particular areas. It is up to you to recognize where you need help to be successful and identify a strategy for building on your strengths and compensating for your weaknesses.
As for what is takes to be successful, the final thing to remember is that you set your own measuring stick for success. It does not matter what anyone else may think about you, only you can truly judge your own performance. To paraphrase Zig Ziglar, “Success means doing the best we can with what we have. Success is in the trying, not the triumph. Success is a personal standard.”
This is my last article as Director of the Coconino Community College SBDC. My own entrepreneurial fire was recently rekindled and I am once again pursuing a path of self determination (and, yes, it is another bagel store). I have enjoyed my tenure here and feel honored that many of you have invited me to learn more about your ideas, dreams and passions for small business. There is a quote from the Talmud, “Much I have learned from my teachers. Most I have learned from my students.” In regards to my position at the SBDC, I could not express a more honest sentiment. I wish you all a successful and prosperous future.
“Don't be dismayed at good-byes. A farewell is necessary before you can meet again. And meeting again, after moments or lifetimes, is certain for those who are friends."
Richard Bac