The year 2020 has brought unprecedented challenges and difficulties to virtually every business owner.  But, those challenges do not have to sink every ship, as some owners will survive the challenges while others will find new opportunities.  It is often said that 80% of results comes from 20% of causes.  Generally, that means that 80% of revenues will come from 20% of your customers, that 80% of problems come from 20% of the issues you face, and so on.  If you find and focus on “the 20%” you need to succeed, you will find the most likely path to success.  This article begins a series focusing on what you can do to find your 20%.

Keep your customers at the core of your business.  Know what they need and want, and deliver that.  More often than not it is something more than just the product or price.  It usually comes down to other things such as timely delivery of your products or services that enables your customer to get their products and services to market on time or ahead of time, a high degree of quality control, or something else.  Do not be afraid to ask them what they need from you and then follow through.  This is especially so for your top 20% customers.  Ask for and address their feedback.

Stay engaged.  Often, as businesses get traction and develop a successful history, the owners disengage from the business to pursue other interests, leaving the machine to run under the guidance of others.  The problem often is that employees, even those considered trusted and loyal, do not, have the same interests as the owner in the success of the business.  I have seen it a lot in my practice – an owner has been invested in the success of the company for a long time, has enjoyed steady growth and profits, and then decides that it is time to take some time off to pursue travel, leisure or other interests while expecting the business to continue its path.  Eventually, the business begins experiencing problems with customers, slow or stalled growth, reduced profits or increased losses, deteriorating financial statements, litigation over disputes, and other issues destroying the business. When the owner jumps back in to try to right the ship it may be too late.  More often than not that occurs because the people left running the ship did not have the same drive to see the company continue to grow and succeed.  For sure, take time off, but stay engaged.

Set goals.  Set goals, create achievable strategies such as deadlines and objective metrics, and measure your success in achieving those goals.  Share those goals and success metrics with employees so they are able to gauge their performance.  Measure employee value by how they contribute to goal realization rather than how busy they appear to be.  Also, do not become overwhelmed by the mundane.  Focus on and solve core problems, not the problems those core problems create.  For example, if customer retention is a problem, instead of investing significant time and attention on getting a customer back, focus time and attention on the problem that caused the customer to leave in the first place.  Take steps to correct the issue, and then report to the customer that that problem has been eliminated.  Overall, create a culture where everybody in the organization is motivated by those goals and addresses problems in the same way, and one where everyone’s inquisitiveness and input is valued.

Implement effective systems, and make sure they are followed.  Those should include systems for hiring and firing employees, payroll, managing customer orders and deliveries, invoicing, managing cash flow and debt, protecting company information, and managing sales and marketing.  Effective systems will help a company grow, scale, and succeed.  For example, timely invoicing will provide better cash flow, which in turn will enable better materials and equipment sourcing and accounts payable management, which in turn will increase profitability, and which in turn will provide the means to grow.  Having solid systems is often the key to having a marketable business if the time comes to sell.  When that time comes, your systems will be scrutinized extensively, especially your systems for documenting your contracts with your customers, vendors, financiers, and others.

Protect yourself.  Protect your data and business information from walking out the door with the next disgruntled employee.  Naturally everybody believes that their employees are loyal and have the same goals as the owner of the company, but that is not necessarily true.  Law books are full of stories about employees planning to start their own business while working for the company they will compete against.  Those employees create elaborate plans to walk off with customer databases, sourcing information, business plans, and other information all with the idea of using that information to unfairly compete with their former employer, thus bypassing the usual start-up pains and expense.  Implement systems where employees only have access to information they need to do their jobs, and do not be afraid to utilize non-compete agreements in appropriate circumstances.

Surround yourself with positivity.  Nothing is more contagious in the workplace than a bad or negative attitude.  It is hard enough to run a business and succeed in the best of times, but when you bring in people who “bitch, moan, complain, gripe and whine” at every opportunity, you are essentially bringing a cancer into your organization.  They will destroy a company’s culture faster than you can ever rebuild it.  If you do find that those attitudes have crept into your business, act quickly.  You will never be able to change that person, but you can change the person in that position.

Embrace change.  Think “new,” be forward thinking, and do not be afraid to innovate and change.  If there is one thing that the events of this year have taught us, it is this – we have to be prepared at a moment’s notice to shift our focus to conducting business in new and innovative ways, and not merely rely on the tried and true.  Business owners do this by constantly identifying and analyzing their company’s strengths, weaknesses, opportunities, and threats.  Learn how to strengthen strengths, eliminate or reduce weaknesses (poor culture, poor product delivery, poor quality control, etc.), evaluate opportunities and develop ideas to take advantage of them (what can you do that your competitors do not), and protect the business from threats (supply chain interruption, competition, etc.).

A careful review and analysis of your business will often provide you with the tools needed to face challenges and embrace change.  In following articles, we will discuss some of the things you can do to implement some of the ideas in this article.