Robust ThemeDec 09, 2019 2020-04-08 7:40
The 3 Key Elements of a Business
Let’s get this started!
“Hi Simon, this is Oliver from Melbourne. I’m the owner of my agency and I am doing too many things every week. There’s so many avenues I could go down to help my business, what are the most important things I should do this week to run the business? You’ve talked about systems before, what kind of systems do you mean?”
THE 3 KEY ELEMENTS (0:31)
You need three elements to run a company and they are: strategy, structure, and people.
In the middle you have culture. Basically how you do what you do.
Let’s start with strategy. To run a company you need knowledge. You also need to know what you don’t know. That’s the explorative part.
We have strategy which is what we know about the customers, the markets, our offerings, the revenues, and the profits.
Also, what we do not know about the customers, the markets, the revenues, and the profits.
Both need to be addressed, measured, and managed.
Customer Lifetime Value. (1:20)
Most of us do not know exactly what the customer lifetime value is. What it truly costs for us to acquire a customer or what the cost of fulfillment is.
When you have the project and you deliver the project: what exactly does it cost to you as a company? That’s pricing, and it can be a very hard task for most entrepreneurs.
Then comes structure. How our rules, our processes, our rules, our weekly meetings or monthly meetings are really structured. The real behavior. Not what we say that our values are, but what we really do.
How can we put that in a manifesto in a way that really describes how we behave from hour to hour?
Then the people side is about engagement. Can we trust each other? How transparent is what we do? Who is doing what? How can we raise the energy that we bring into a room so we raise the energy level of everyone in our team?
And then for the CEO and the entrepreneur the question is ‘How many people should I hire? How many people can I hire?’.
IT’S ALL CONNECTED. (2:47)
This is linked to strategy.
You know if to hire and how many people to hire, which people to hire for which task, when you know the customer lifetime value and when you know the cost of acquisition, the cost of fulfillment.
FROM A JOB TO A BUSINESS (3:02)
Without these three parts, you are not running a business, sorry to say. But you have a job and not yet a business before you have these three things in place.
P.S. Want to go from stressful and manual to scalable and self adapting? Join our Entrepreneurial Freedom Workshop. We can’t wait for you to join us!