Jolie Kanat

Running a Business 101: Not For the Faint of Heart

In Uncategorized on January 21, 2011 at 10:34 pm

It takes a combination of crazy, creative, and courageous to run a business.  The good news is that sometimes it even goes well.

There is a funny idea floating around that when a business goes right, it is an anomaly, a semi-miracle sewn from the fabric of magic and good luck, with a little bootstrap pulling thrown in for effect. Success is, in otherwords dependent upon the Fates, Furies, and Family Ties.

So we get the idea that there are “Rich People” and “Poor People.” As if prosperity  is mysterious, or in our DNA, or there is an allotment of wealth, bestowed upon the lucky few.

Actually scientists are yet to discover the strand of Wealth DNA.

The Good News Is: There is a Way

We can see that businesses look pretty good when they have a popular product (the iPhone), or a valuable service (Google).  Obviously that’s what business is. It offers something that is of value to the consumer and it generates revenue in exchange.  But then why do some businesses get smaller or fail?  Even if they offer a great product?  And why do some persist?  Even when the product is less fascinating or the competition is fierce? And why is there so much struggle?

There are ways to succeed other than luck, magic, white collar thievery, tricky market manipulation, or force of personality.

Rule number one:

You may have a great product but you also have to have a well run organization to administer the product.  And you may have a great business structure, but you also have to have a product that people want.  This is the simple secret to expansion and persistence in business. Product and administration. One without the other will not persist.

So What is an Organization?

Derived from the word “organ,” which, like your heart, is something that works as one functioning unit to produce something in a uniform, orderly way, a well run organization is your yellow brick road. If your company feels more like a confused hodgepodge of “what just happened?” than a uniform and well running “organ,” you may well be experiencing, not a poor product, or incompetence, but fundamental disorganization.

To start, an organization could consist of just one or two of you: one of you who makes and sells the product (let’s say candy apples) or delivers the service that the business is there for (let’s say carpet cleaning), and the other one who handles how the organization works.   It has certainly been done, but it is pretty tough for one person to handle both aspects.

Then there is a third aspect.

The Big Three

These are the three big chunks of most organizations:

1. Making or delivering the product or service
2. Administering the product or service.
3. Marketing and selling the product or service

Using a baseball analogy, there are often more team members who want to play ball than team members who want to sell tickets, umpire, and keep score. It’s really fun to play ball.  But without the second set of team members, the administrators and salespeople, those ball players will be playing to empty bleachers.  And that won’t last for long, because there is no revenue or organization.

What About Charisma or Investors?

It is observable that you can make a business more of a success if you have a charismatic Steve Jobs or Warren Buffet or Walt Disney at the helm.  Their personality or lasting historical presence can contribute to the juggernaut they initially create. This is good, but even they need a product, sales, and organization that works if the business is to last beyond that individual energy and star power.

And yes, you can make a business look like it’s going well if you have a venture capitalist pouring cash into the coffers. That is good, too. But even then you will need an organization behind you to keep the production steady when the cashola runs out and you have to produce the same level of income that was given to you before your revenue-producing product was completely realized.

So, investing in superb organizational structure that ensures the prediction and longevity of the business, the orderly transactions, the steady sales, clear communication, internal correction, and a stellar workforce, is as important as your product.

Here’s to your success!

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