To set your business up for long-term success, a strong foundation must first be built. This foundational structure paves the way for the company in uncertain times. It forms the guiding principles that you and your employees can turn to each day to make sure you are on the right track. When good-quality stones are properly placed and aligned with strong cornerstones, the foundation is solid. The structure on top is stable: ready to endure time, weather, and natural disasters.
Similarly, for a business to thrive, it requires a strong foundation, composed of interlocking foundation stones, or competencies. Here are six core competencies that are required for a successful business:
Vision
The company vision is the most important layer of the foundation. It is the core ideology that gives the business character; who you are. It outlines your dreams and goals as an organisation: something that you try to achieve when you wake up every day. However, it isn’t just about creating your vision, but also making sure each and every employee is also familiar with it. According to a recent Forbes survey, nearly 52% of employees don’t know the company vision. If an employee can’t appreciate the business vision, how can they put their best effort into it?
Leadership
A company cannot grow beyond its leader, which means the strength of your leadership will determine the success of your company. Good leaders have the responsibility to protect and inspire their employees, as well as hold them accountable. When done effectively, the employees and thus the business will thrive.
Management and Operations
Management and operations relate to getting the right people in place, and getting the right things done. Your style of management will be informed by your effectiveness as a leader and by the vision-oriented direction you give your employees.
Marketing and Sales
Marketing and Sales isn’t just a small section of the business, but rather affects each component heavily. It isn’t just about finding a customer for your business, but rather nurturing them in every following interaction to develop a strong relationship that retains them for your business. Particularly for start-ups and SME’s, marketing is crucial as for every $1 spent on advertising and marketing, SME’s benefit 8 times more than larger corporations.
Cashflow and Financial Profitability
As the famous saying goes: “Cash rules everything around me”. Without proper cashflow management, expenses increase, and profits decrease. You must not only understand the fundamentals of finance, but also know how strategically manipulate different levers of finance.
Organisational Culture
In the natural world, everything thrives or dies depending on its habitat. In a business, the culture is the same. Your company’s culture will impact your employees’ motivation and output. It will help you, as a business leader, remain focused on what really matters, according to your vision and values. Many business owners often neglect this aspect, but with 23% of start-ups mentioning team issues as a cause of failure, its more important than people think.
At the end of the day, obtaining a basic knowledge in all of these competencies will allow you to construct the perfect operational foundation for your company that will motivate you and your employees to work and grow your start-up.
More information can be found here:
https://business.gov.au/expertise-and-advice/Business-Foundations