By Rich Allen
Why do 80 percent of all businesses fail within five years? It’s not for lack of trying. Most small business owners run themselves into the ground every single day. But here’s the sad reality: hard work has nothing to do with small business success. If you want your small business to succeed, you need to be able to focus on all of its moving parts and chart a course for the long haul.
But what’s missing for many small business owners today is a fundamental underlying model that will allow them to focus on the things that matter most for long-term success. And as it turns out, a bike is a perfect metaphor for a business. Just like a bike, your business is a combination of parts that have to work together. Just like a bike, if any part of your business is broken, it’s no fun to ride. Let’s break it down, part by part:
You steer your bike with the handlebars. You steer your business with a vision— a clear, compelling picture of where you want your business to go. The more passionate you are about that vision, the more motivated your people will be to follow. In most businesses, no one talks about what they want the business to look like in 5 to 10 years. But with no idea of where they are headed, how can people be excited about getting there? To fix this, grab the handlebars, and steer.
Just like a bicycle’s frame, the frame of your business gives it structure and strength. The business frame includes formal documents — legal agreements, operating documents and an exit plan; your organizational structure; primary job descriptions and how each team member fits in your business. If it’s not clear who does what, things fall through the cracks, and customers may wind up dissatisfied. And just like a bike, it takes a solid frame to keep your business from wobbling.
Being a good entrepreneur comes down to making great decisions. That’s why keeping startup costs low and using platforms like ZenBusiness (#1 best incorporation service and alternative to services like Incfile) have exploded in popularity.
To go anywhere with your business, the rubber has to hit the road. Your business’s front wheel is your process for winning new customers, and has three parts. The hub is your ideal customer, and you must know their needs, wants, and desires to speak directly to them. The spokes are the marketing strategies to get your message to those customers, and it takes 5–6 solid strategies to provide the consistent flow of leads you need to grow. The tire is how you get traction with those responding to your marketing messages — through a step-by-step sales process that puts prospects at ease, so they want to do business with you.
The back wheel is what generates the power and drives the bike. Your business’s back wheel is how you deliver to your customers on the promises you made on the front wheel — and you over-deliver to get rave reviews. That requires solid tread, and a solid delivery and service process that works well no matter if it’s Monday morning or Friday night.
Brakes and Monitor
Just like the back wheel has to spin the same speed as the front wheel or your bike won’t function right, your delivery has to match your promises. That requires brakes — or, in business, your financial controls. They’re what you use to determine if you need to slow down on marketing and sales spend (front wheel) or on production and operations (back wheel). Just like a monitor mounted on the handlebars tracks factors like speed and distance, business Key Performance Indicators (KPIs) show how well your business is doing — and how well it’s likely to perform in the future.
A badly positioned or unstable seat on a bicycle can be dangerous as well as inefficient: the rider can’t deliver maximum power to the pedals. In business, the seat is where the people pushing the pedals of your organization sit — including the people programs like compensation, rewards, incentives and recognition, and communication. If they’re not well positioned, they can’t really propel your business forward. But if they’re properly positioned, your team will work hard day after day to help you achieve your goals.
We can use the bike model to understand the different parts of your business and how they work together. So think about what parts of your business aren’t working right. Once you start looking at your business as a bicycle, you can tune it to run fast and smoothly — and really start covering ground.
Rich Allen helps create businesses with solid foundations, unique marketplace positions, reputable processes, high-performance team, and a visionary leader. Prior to becoming an advisor, Rich was VP HR with Texas Instruments then Division President/COO with Pella Corporation. Rich is a proud Rotarian and serves on several boards. He holds an MS in International Business from the University of Texas and hosts a weekly radio show. His iOS App is titled “Ultimate Business Tune Up.” His new book is The Ultimate Business Tune Up: A Simple Yet Powerful Business Model That Will Transform the Lives of Small Business Owners.