3 Essential Elements to a Successful Business

3 Essential Elements to a Successful Business

There are many things to consider before starting any business, this article will talk about three elements, that are essential and which many entrepeneurs miss out.  They are not the fun part of creating a new enterprise, but essential to success.

1. Business plan

Having a plan, done well, gives you a guide and map to what will work and what might not work so well.  It also gives you an insight into how much money you will need, what equipment and your expenses and most importantly if you will make a profit.

Many people have great ideas and miss this part out, then wonder at the end of the day, where all the money has gone, not in their pocket, but in the day to day running of the business.  

What goes into a business plan?

  • Mission statement
  • Vision statement
  • Tag line
  • Creative Ideas, services
  • Finances

The mission statement gives you focus, a summary of why you exist and helps your clients and customers know what they can expect.  It is essential that all employees also know what your mission statement is, so they know your reason for being.

A Vision statement is where you are going and helps you focus on moving forward.

When a business gets into trouble, and all businesses at some time or another have difficulties, going back to the mission and vision statement helps you return to the reason you created your business and when written well, will motivate you and your staff.

Without a mission statement you are the only one who knows why you created your business.  With a mission statement everyone else also knows and can support you.  Same with the vision statement.

Tag line is a really concise statement of the mission statement and helps your marketing and pr and advertising focus.

Putting everything into a document, your business plan, helps you not only focus, but is a working breathing living document for partners, investors, helps you raise capital and most importantly grounds your business.

Everything is created and manifested starts with an idea, is grounded with a written plan and manifested by you giving it all energy.

Many of our students groan at the thought of having to write a business plan, as do many entrepreneurs.  Students that I have taught who are starting their own business, once they have their business plan are delighted and are so focused and inspired.  Yes it takes time and energy and can sometimes be boring especially the financial forecasts and crunching numbers.  In the end it is essential and will make sure your business starts with a great foundation, essential building blocks.

2. Finances

How much money do you need?  The business plan has shown you the exact numbers to start and operate your business.  The next stage is to know that once you open your doors, clients and money take time to give you a viable business, to pay all your bills in the first three months would be great, but often this isnt the reality.

Ensure you have enough cash in the bank to operate and run your business for a minimum of three months, covering all your expenses.  Having paying clients and customers in that time is an added bonus.  

Many businesses fail within the first 3 months because of lack of cash, not being able to pay the rent and salaries.  Dont be tempted to start your business without this basic amount of funds.  You will fail.  Dont be tempted to start a business with large premises you really cant afford, start small and build later.

"Laura Ashley today is an international fashion success.  Laura started her business in her garage, with hand printed fabric she made into tea towels. She loved fabric and prints and designs, had a vision and a mission"

3. Location, location, location

Where do you want to be and where can you actually be?  They may be quite different places, based on what you can afford and what the location offers.

Do you need premises?  Many companies in this fast paced world of communication through the internet, are down sizing or dont even have offices or retail outlets.  It depends entirely on your business, is it client and services related where the clients come to you, or can they buy and use your products and services in their own home, in cafes at the beach.  

If you need physical premises take time to consider where will be the best place and also can you afford the rent.

Paying huge rent, may give you prime location where everyone can see you, but at the end of the day having a collossal rent to pay each month, could be challenging, especially when times are slow.

Being visible with prime retail space gives you footfall past your door and most likely inside your business.  Check before you sign on the dotted line, are the people walking past your door the right people who will come in and buy.

Big corporations like MacDonalds look at these three aspects

  • Will they be visible to a lot of people?
  • Does the location already attract a lot of people?
  • Are these people their target audience?

If the premises and location doesnt meet these three criteria, they wont open in that location.  This is a good guide for all business to follow, as it will most definately give you a better start if you research different locations.

You might be more comfortable having premisess that are not so highly visible, but with a much lower rent.  This would mean that you will need to spend more money and time on marketing to get people through you door.  

These three elements can be the start to a successful business and can also be used in redefining an existing business that could benefit from a little more focus.

Still not sure how this all comes together, join our business classes available every month.  

Call 04 3887552 today to register for a business class, one day of business planning or join our spa and salon management course, which covers this and many more aspects of creating, operating and running a spa and salon