Every year thousands of businesses get started, and many of them are shut down before the end of the year.
By Austin Okonji
Many people want to start businesses having the mind of growth and eventual success for their businesses; but about 20% of those businesses most likely fail in the first year, 50% of the remaining most likely fail within the first 5 years, while 75% of them shut down within the first 10 years.
Do not be surprised as these data have been tested and found to be true over the years.
But all hope is not lost, as you can still fall into the category of those that are successful; if only you can implement these strategies stated here.
Implementing these strategies come with a mindset that can release you from one of the most disturbing inefficiencies in business. For instance, by managing your business more effectively and prioritize your business inputs, you will surely get greater outputs and greater revenue.
Worldwide, Covid-19 pandemic has left most businesses with financial bruises, a challenge that has surpassed what we have ever witnessed for centuries in human history. Thus businesses continue to daily experience so much external pressures. Sadly, many companies and organizations are not building-in even the most basic systems available to them because of several factors.
Meanwhile, let us look at the five principles for optimizing efficiency, to release your business from self-imposed constraints, in 2021.
1. Don’t Start Any Business For The Wrong Reasons:
A lot of people start their businesses for the wrong reasons; when your main aim of starting a business is to make a lot of money, then you are in business for the wrong reason and it is a sure route to failure.
Success can only come in business if you have passion for what you are doing and you are ready to provide solution to people’s problems; then when you do that people will reward you with money.
2. You Must Do A Comprehensive Market Research Before Starting The Business:
Before settling down with a particular business idea or product to pursue, sit down by yourself or with your team and do a comprehensive market research about the business.
You should find out all you need to know about the product and the industry, otherwise you are setting yourself up for failure.
The possibility of success in a business you started without these few steps stated above is very slim. You will be counting on luck; but luck has very little to do in the business world of today.
Most businesses have hidden expenses that cannot be clear to you by just having a casual look at events from afar. It is when you get started, that your eyes will be open to much more than you ever imagined.
3. You Are Not A Manager, You Are A Leader.
Leadership and Management are not the same; the manager accepts the status quo, while the leader challenges it, according to Warren Bennis, Professor of Business Administration and an Organizational Consultant. So if you are the Chief Executive Officer of your business and you probably have managers working with you, do not expect them to confront problems, rather they will try to solve problems based on laid down rules and regulations of the company.
Curiously, if any problem goes beyond the managers, the presence of the leader will be required. If you see yourself as a manager, you are strategically not better than simply taking what you have and preserving it. Can you see the connection? You had N2m at the beginning of the year and as a manager you will be trying to preserve the N2m, but the leader will confront obstacles that will prevent him from increasing the asset. Also, entrepreneurship rests squarely on the foundation of leadership. The leader identifies the company’s strengths and weaknesses, implementing positive changes while taking others on the journey to success.
Meanwhile, a leader must continue to develop an efficiency idea, try it, review and then roll it out for his/ her company’s-wide effectiveness. True leadership has compounding effect on efficiency. If today you start looking at yourself as a leader, you will improve yourself. Also, if you teach your team that they are leaders too, they will start identifying efficiencies upon efficiencies at every level in your business.
4. Lean and Jettison Irrelevancies
The greatest question you should be asking yourself this year 2021 is, what are the things you are doing that people won’t pay for, and why are you still doing them?
The Toyota production system gave rise to ‘Lean’ working, and when the founder was asked about lean thinking, this is what he said “All we are doing is looking at the timeline, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the timeline by reducing the non-value adding wastes.”
5. Invest In Real Business Efficiency Review:
To succeed in business, especially during these trying times, you must review your activities decisively. Look, you must make a conscious effort to verify all you have been doing for a week or month in order to know if you have been efficient or not.
Look at the Kevin Zhang, the eCommerce entrepreneur behind HEMPX clothing brand and the Branded Niche eCommerce (‘BNE’) approach. He has a unique way to ensure business efficiency is at the heart of his business.
Every month, he spends one-week logging everything that he did that week, hour by hour, and then closely examines any inefficiency.
He looks at his schedule and determines which activities are high value-added and which can be automated hiring new talent.
The University of Oxford identifies scalable infrastructure as one of the three key requirements for a business to move to the next level, with strong leadership and appropriate marketing.
When a leader focuses on removing inefficiencies, it is like removing shackles from a business’s potential. This requires courageous leadership and the strong ability to identify what the client needs, and supply that to them in the most streamlined method.