Direct Marketing Article
Proof Positive: Seven Facts to Breathe Life
into Your Business
By Bill McBean
(Just as there are facts of life that affect us personally, there are facts
of business life that affect us as entrepreneurs. Bill McBean shares what he
has learned over the course of a successful career to help you avoid common
mistakes and steer your company in the direction you want it to go).
Doomed from the start. If you're an entrepreneur or an entrepreneur-hopeful,
it's probably difficult to keep those four words from causing you to second
guess your every move as you plan and run your business. They become
especially hard to ignore when you consider the fact that less than 30
percent of businesses last more than 10 years, and most failures happen
within the first few years of operation. The truth is, many things could go
wrong: an ill-conceived business idea, poor planning, lack of capital,
ineffective leadership, and more. In the high stakes world of running a
business, those are the facts.
But, says Bill McBean, there are other important facts about business
ownership. Facts that could help you avoid the mistakes and pitfalls that
trip up so many others, and go on to achieve the success you've dreamed of.
He calls them the Facts of Business Life.
"Of course, there are a variety of skills owners need to know in order to
make a business work," says McBean, author of the new book The Facts of
Business Life: What Every Successful Business Owner Knows That You Don't
(Wiley, October 2012, ISBN: 978-1-1180949-6-9, $24.95,
www.FactsOfBusinessLife.com). "But after many decades of running my own
successful businesses, and learning how other successful owners have created
success, I have come to the conclusion that these facts are the seven
essential concepts needed to create a successful business life."
McBean knows what he's talking about. A successful business owner many times
over and a trusted mentor to entrepreneurs, he shares in his book a career's
worth of wisdom that you can put to use right away. The Facts of Business
Life provides a thorough explanation of each fact and why their sequential
order is important. And, he is the first author to define the five levels
through which every successful business evolves-its life cycle: Ownership
and Opportunity, Creating Your Company's DNA, From Survival to Success,
Maintaining Success, and Moving On When It's Time to Go.
Best of all, The Facts of Business Life makes it clear when each fact should
be implemented and how they should be implemented on each level. (Make no
mistake-while the facts will always remain the same, their application will
change as your business grows and matures!) That's where the book's greatest
value can be found: McBean makes it very clear how and why each level
signals to an owner that it's time to change up the way he or she leads,
manages, markets, etc., and he provides actionable advice on how to best
"Now, don't get me wrong," McBean clarifies. "There are no guarantees for
entrepreneurs-and to add to the challenge, each business is one of a kind,
in terms of how it competes, its constraints, and how it operates. But what
you can do is tilt the odds in your favor."
If you're ready to build a strong, lasting foundation for your business,
then read on for an overview of McBean's tried-and-true seven Facts of
Fact 1: If you don't lead, no one will follow. At first, this
statement seems mind-numbingly obvious. But often, "leadership" is one of
those words that is thrown around by people who haven't given much thought
to what it looks like in action. According to McBean, good business
leadership begins with defining the destination and direction of your
company and deciding how the business should look and operate when it
arrives. But it doesn't stop there. It also involves developing and
continuously improving on a set of skills in order to move your business
from where it is today to where you want it to be tomorrow.
"What's important to understand is without effective leadership your
managers or employees have no idea what is important to the owner, what to
manage, or what success and failure look like," notes McBean. "In other
words, in order to have effective employees, your business first has to have
effective leadership, which has to include defining success and failure
based on the eventual destination. Another important aspect of being a good
leader is developing a company culture that's expectations-based, and
rewards those who meet and exceed those expectations. The good news about
leadership is that the most important aspects can be learned, and it's
essential that owners do so."
Fact 2: If you don't control it, you don't own it. Control is the
owner's management reality. If you don't control your company by defining
key tasks and dictating how they must be handled, and "inspect what you
expect," then you don't truly "own" the business because all you are is a
spectator watching others play with your money.
"There are two overriding or macro concepts successful owners understand
over their unsuccessful competitors," explains McBean. "First, great
procedures and processes need controls, and these in turn create great
employees. This happens because procedures and processes operate the
business, and employees operate the processes. This is one of those business
basics that owners must understand to be successful.
"Secondly, don't stop at pointing out what should be done and how. Also
clearly state and emphasize that there will be consequences when standard
operating procedures and processes aren't followed. If you don't do this,
you'll be ‘leading' a group of individuals who follow their own rules and
judgment, rather than a cohesive company working toward a common goal. Once
again, this is one of those business basics owners can't ignore."
Fact 3: Protecting your company's assets should be your first priority.
Were you surprised because this fact didn't instruct you to first protect
your company's sales, profits, and growth? If so, you're not alone. But the
truth is, assets-which include both tangible and intangible assets-are what
power sales, profits, and growth.
Usually, owners and soon-to-be owners understand the need for insurance on
assets like their buildings and equipment. In fact, bankers insist on
insuring specific assets they lend money on like facilities, equipment, and
sometimes even insurance on an owner's life. However, successful owners
don't stop at protecting obvious assets. They understand the importance of
every asset, because assets represent invested cash, which should be managed
to produce exceptional and maximized profits.
"Ignore this business fact and your company will underperform-if it can even
survive the continual asset write-offs and write-downs, customer
abandonment, and employee indifference," says McBean. "I believe protecting
both tangible and intangible assets to be one of the most underrated and
underappreciated ownership issues today, and, if mismanaged, can be one of
the most damaging. The key is to understand what all of your company's
assets are, and then guard them closely and work to maximize the profits
they represent. Because if you don't, they will haunt your business and
cause financial pain when you least expect it, or want it."
Fact 4: Planning is about preparing for the future, not predicting it.
Nobody knows what tomorrow, next week, or next year will bring for your
business. But you can make educated guesses based on the most current,
accurate information available as well as your own past experiences, and
this should be an ongoing process. Effective planning, McBean asserts, is a
mix of science (gathering pertinent information) and art (taking that
information and turning it into a plan that will move your business from
"here" to "there" over a specific time period).
"Being able to plan better than your competitors can give you a significant
competitive edge in the market," he adds. "Ford Motor Company is a great
example. In 2008 and 2009, its competitors, GM and Chrysler, ran out of cash
and needed taxpayer bailouts to avoid bankruptcy. But not Ford. Years prior
to the credit crunch, Ford began to restructure its debt and raised billions
as it continually added to cash reserves. Was this luck or good planning?
Industry insiders will say good planning. The point is Ford knew, as you
should, that planning is important because it focuses owners on what's
important and it prepares them for what lies ahead."
Fact 5: If you don't market your business, you won't have one. Maybe
working to market and advertise your product isn't your cup of tea. Or maybe
you believe your product is so great that it should speak for itself. If so,
too bad-you're going to have to do it anyway. The bottom line is, if people
don't know about your product, you won't be successful.
"New business owners especially are nervous about marketing because money is
already so tight at this stage," acknowledges McBean. "But again, if
marketing isn't done, very little good will happen. You have to make the
necessary effort to connect consumers to your company. And when you do,
you'll begin to see marketing as the investment it actually is, rather than
the expense that less successful competitors think it is."
Fact 6: The marketplace is a war zone. Every company has competitors,
and if it doesn't and it's successful, it soon will. Successful owners know
they have to fight not only to win market share but to retain it as well.
That's why McBean insists that you must develop a warrior mentality and
maintain it for as long as you're at the head of your business.
"That's because selling and sales in any industry is serious business,"
notes McBean. "It's take or be taken from. If that isn't a business war
zone, then I don't know what is. In other words, in order to be successful
and remain that way, you have to continually focus on the market, react to
it, and fight for what you believe should be yours. If you don't, your
competition will win the war. The point being great marketing has to be
followed up by having your company ‘on its game' in order to capture every
customer your marketing attracts."
Fact 7: You don't just have to know the business you're in; you have to
know business. Yes, of course you need to know the inner workings and
nuances of your particular industry if you want to be successful. But you
also need to understand the various aspects of business as it is more
broadly defined, such as accounting, finance, business law, personnel
issues, and more, and how all of these impact each other and the decisions
"Having tunnel or limited vision as far as business knowledge is concerned
is akin to dropping out of high school," says McBean. "In doing so, you
limit your possibilities for success and how great your success could be.
But at the end of the day, what is most important is not how much you know,
but what you know and what you do with that knowledge. For example, it's
important to know what's going on in your market, but it is just as
important to know what to do with that information and how you can translate
it into more sales and gross and net profits-something that can't be done
with limited business knowledge. And remember, it's an owner's
responsibility to make sure what you're learning is correct and relevant."
"Ultimately, I don't believe that any entrepreneur can succeed-or at least
reach his or her full potential-without knowing, understanding, and applying
these seven Facts of Business Life," concludes McBean. "It's equally
important to understand how these facts are interrelated.
"For instance, being able to develop strategic plans or market your product
will mean little if you don't have a good grasp of business in general," he
concludes. "But I promise, if you commit yourself to understanding these
facts while being prepared for their implementation to change as your
business goes through its inevitable life cycle, you'll be creating a
best-odds scenario for success."
About the Author:
Bill McBean is the author of The Facts of Business Life: What Every
Successful Business Owner Knows That You Don't (Wiley, October 2012, ISBN:
www.FactsOfBusinessLife.com). A graduate of the University of
Saskatchewan in Saskatoon, and Mount Royal College in Calgary, Alberta, Bill
began his career with General Motors of Canada Limited in 1976. After
holding several management positions with GM, in 1981 he accepted a position
with the Bank of Nova Scotia (ScotiaBank) as manager of a sizeable
commercial lending portfolio. Two years later, however, GM approached him
about opening a new automobile dealership in Yorkton, Saskatchewan, and,
along with ScotiaBank, offered to lend him the required capital. Accepting
the offer, Bill began his first business as a "start-up" the following year,
beginning with ten employees.