If you’re like most small business owners, not long after opening, you find yourself in the trenches working in the business. The nitty gritty day-to-day details, the tasks, the to-dos, the checklists. The never-ending fires you need to put out.
Now much of this is particularly important work and it’s necessary and not to be avoided.
But if you don’t regularly carve out time to work on the business instead of in the business, you may find your growth has stagnated and you’ve hit a ceiling, wondering why things are not growing. It’s far too easy to lose sight of your long-term vision of where you’re going. But it’s hard to make time for this.
Today, we’re going to share a small business operating framework. This framework is simple and will work with you at every stage of the business, scaling with you. Know that this framework will change over time. Revisit it over the stages of your business.
The founder of Salesforce originally shared the basis of this framework on his blog.
Mission & purpose
Let’s start at the beginning – the mission and purpose. Or as Simon Sinek would say, start with why. This is the basis of a successful small business operating framework.
- Why does your company exist?
- What motivated you to get started in the first place?
- What do you want to achieve?
- What’s the future you envision?
- How will you make the world a better place?
Try to think beyond making a lot of money. There’s nothing wrong with making money as an entrepreneur but that should be the byproduct of your big vision, not the reason for your existence.
This will be your team’s rallying cry; you can’t use making a lot of money for yourself to motivate your team. You can keep these aligned with your vision. It’s hard to get inspired by a founder who just wants to make money.
Core values
Core values are the foundation of your culture and the lens through which you evaluate everything from who you hire to whom you work with. A few questions you might consider to help develop your core values:
- What’s important to you?
- Whether or not your company succeeds, what are you not willing to compromise on?
- What important character traits do you expect everyone to exemplify?
- What makes you unique and different from your competitors?
- How do you expect your employees to treat each other?
- How do you expect them to treat your customers?
Once you finalize your list, write a more detailed description of what this means to the company and create a list of examples in action of how this might turn out.
For example, if one of the core values you landed on is humility, this might include what’s best for the team, not just for you. Put others before yourself, admit your mistakes, give credit. These are just some ideas tied to one value – humility. But you want to do this for every core value.
You want your team to understand how to bring these things to life.
If you have a core group of leaders already in place, or just a small team, include them in the process of figuring out these things. Go wide first, throw out all ideas. Then narrow down what you really want to focus on as an organization. Keep it to three to five core values. Beyond that, no one will remember them.
If your values are single word, add a one-liner to explain the heart behind it. For example, with humility you can say don’t think less of yourself, think of yourself less.
Strategy
How will you accomplish your vision? Creating a strategy will be the most difficult and involved part of the process and will require input from other key leaders on your team, even your customers if you have them already.
Some question to try to answer here:
- What are the key activities of your company?
- How will you make money?
- What are the products or services you’ll offer?
- Who is your target and how will you reach them?
- What channels will you use to acquire customers?
- How will you service your customers?
- What will your biggest drivers of cost be?
To help organize and guide this process you may want to leverage a tool like the business model canvas. You can find tons of free templates online to help you get there.
Risk
We can’t promise you much, but we can promise you will encounter lots of obstacles along the way. Doing your best to get in front of the key risks and challenges you may face will help you stay prepared at every turn and maintain your sanity.
While there are always unknown unknowns and things you can’t envision today, with a little planning you can identify many of these.
Go back to your strategy section and identify which of these is the biggest risk.
- Which of these questions are you most uncertain about?
- Which is you’re wrong about has the highest likelihood of failure – what might kill your business?
- Are there existing competitors that might prevent you from being successful?
- Pro tip there probably are. No business is so unique today that there is no actual competition. Don’t fool yourself into thinking that.
Fast forward three years, if your business were going to fail, what would be the most probable cause of that? What other challenges or problems do you anticipate?
After identifying your biggest risks, think about how you will mitigate and reduce those risks.
What would have to be true to avoid these being a big issue? When will you have to address this?
Consider making a list of things that are the riskiest to least risky. Be sure to get feedback from others to address blind spots. Interview other people who are several steps ahead of you in a business in a similar space. You’ll be surprised how much entrepreneurs like helping each other out. Ask them what the biggest landmines were that they stepped on at your stage. You’ll learn a lot.
Tracking Success
How will you measure success? It’s great to know where you’re going, but you must see a way of identifying where you’re at any given point in time, the destination isn’t that helpful. Track as much as you can to identify unexpected outcomes, but it’s even more important to look at key performance indicators (KPIs). How will you measure your business? That which gets measured gets optimized.
Look at two different sets of KPIs and, within each, narrow down to the one to two metrics that really matter. Make sure you prioritize the ones most important to you. When you start to think about what KPIs to track, look at two different sets and then each set, narrow it down.
The first set are leading indicators of success which help you focus on what comes next. These might be things like how many leads are coming in at the top of your funnel, employee satisfaction, NPN score or customer satisfaction.
The second set is trailing indicators of success. In other words, outcomes that tell us the health of our company. Things like revenue, profit, customer return, and employee retention. Things like this will give you a good idea of how your business is operating.
Once your small business operating framework is established, don’t forget that a vital part of the growth of any business is being adequately prepared for the unexpected. Coterie Insurance offers Insurance 101 resources to help you learn more about insurance. Find an agent today and get the coverage you need to protect your dreams.
