By Michael Bruce, CEO of Purplebricks.com
All of the best business leaders have made mistakes and lots of them! The trick is not to be afraid of failing and therefore not try in the first place. It’s the business leaders that learn from these mistakes, and quickly, who succeed. Never be frightened of making mistakes. We all make them.
If you are thinking of starting a new business, the key elements you should be thinking about are Profit, Planning and People but what some entrepreneurs often get wrong is the order. Is profit the most important? Is it planning? Or is it people? If you get this right from the start then you have the ingredients for a really successful business.
Most individuals will start with profit. I imagine this is driven partly from being educated to do a profit and loss forecast early on and partly by a deep down desire to do better. If we are taught that success is measured by money then this is really no surprise. But profit is merely a by-product of the business and how it operates and who is doing the operating. Depending upon how everything performs dictates what ends up being profit. So I would say that on day one, profit comes third in the list of priorities. Don’t get me wrong, it is important but the least important in the early stages.
What about people? It certainly comes a close second to planning and some people will argue that it should actually be prioritized first, but I believe clear and thought out planning is the most important element for success. Plan how the business will benefit the customer and what makes it a better experience for the customer. How can we engage with the customer as early as possible in the process and get them to help the initial launch. Their insight will be vital. What would be required to get the customer committed for the long haul? How do we stay ahead of the competition and relevant to our customers? These are all questions that need to be well thought out before a penny is spent. With no vision or plan, a business is doomed to fail.
It is inevitable that the answer to these questions will change and develop over time but a clear sense of direction and objective is so important. You can then logically decide who are the best people to help make the business happen. What expertise do I need to help the business become the best it can be?
If your business were a cake then the people would be the ingredients. How it cooks, looks and tastes not only depends on the quality of the ingredients but they all work together to create best possible dessert.
Once you know the answer to these questions you can then move onto profit. What value can we offer our customers? Can we make a profit and save our customers money, time or a headache — what’s the solution that no other business can? What can we realistically achieve? Be honest with yourself because you can be certain that investors (assuming you will need them) will be both very honest and direct with you and your financial planning. If the numbers are over ambitious or your route to market is hazy then the business will never get break through the crowd.
The three P’s: Planning, People and Profit. Each are vital but need to be prioritized. Work through each of them methodically and keep on referring back to the plan to ensure you are on track. From there, it will be updated day-by-day, month-by-month, year-by-year until you sell the business or retire.
I almost forgot one other P to bear in mind — Pain. There is almost always pain before there is pleasure. Growing pain will happen but will be much less problematic for you and your business if you have worked hard on the planning, people and profit. Good luck!