One Simple Tool To Create A Successful Business
To build a successful business, you need to understand the B-I Triangle.
The B-I Triangle represents a company that is solidly managed not just in some, but in all areas, from cash-flow management to product management.
This is the company that will attract money—for, in the world of business capital, money follows management.
If you’re a business owner, what steps can you take to build a business asset that will attract money? The discussion that follows assumes you’re an aspiring business owner, but the tips offered should be equally helpful to would-be investors…
Outside the B-I Triangle
To build a successful business, first, you must establish your framework:
Start by asking yourself this question: Does my mission come first, above any thought of the profit in it for me, and am I willing to give it my all in order to keep the company growing? If the answer is a definite “yes,” then you’re ready to assemble your team.
In assembling your team, look for people with experience and a track record, and be willing to pay for outside expertise that could spell the difference between success and failure. When you don’t have the money upfront to hire specialists, consider inviting them to be members of an advisory board, with the understanding that once sufficient capital is raised, they will come on board. Another pointer: Don’t put together a business plan that’s top-heavy with salaries. Nothing turns away investors faster than potential business owners who are raising money in order to reward themselves with a fat paycheck. Investors want to see your eyes burn with passion and commitment—not dollar signs.
While assembling your team, you should also be striving to improve your leadership style. One of the best ways to do this is to volunteer more. At your church and at work, volunteer to lead projects. In the typical organization it is hard to find people who actually want to lead. Most folks hide in the corner, hoping no one will call on them. Step up to bat. While this won’t instantly transform you into a great leader, it will produce feedback on your leadership style. And if you’re mature enough to hone your leadership skills in response, you’ll develop into a great leader.
Inside the B-I Triangle:
With the framework—mission, team, and leadership—in place, you’re well on your way to building a strong business. Now it’s time to address the five tiers inside the B-I Triangle:
- Cash flow
Each is very important and dependent on all the others. A successful business must have all five areas working together. Much as the disruption to a fuel line can bring down a plane, a malfunction in even one tier of the B-I Triangle can cause a business to derail in even the best of times.
Positive cash flow is essential for a growing company. You might want to start your venture into cash-flow analysis by playing the CASHFLOW board game. This will teach you the difference between actual cash flow and phantom cash flow. Once you start up your business, remember that cash-flow management starts on the first day, whether you have an Internet company, a rental unit, or a hotdog stand. Attention to details in the early stages will pave the way for success.
As a general policy, you should attend at least one communications seminar a year in any of the following areas: sales, marketing, raising capital, ad and copywriting, public speaking, and negotiations. Since raising capital is critical to the birth of a business, the aspiring entrepreneur should attach high priority to effective communication with potential investors.
Marketing is an ongoing part of every successful business. If you stop marketing, the rule of thumb is that you’ll see the impact six weeks later in a drop in sales. If you need a boost in sales, communicate to your database. Your customer list should be one of your company’s most important assets.
Even more basic than the language of marketing, however, is the language of sales. Sales is what you do one-on-one, as opposed to marketing, which is sales done via a system. Like it or not, the heart of the business is sales, and the person who balks at learning this language is probably not going to make it in the B quadrant. Fear of rejection is what makes people avoid sales.
Fear, however, can be conquered with training and experience. By observing how people respond and heeding the lessons, you’ll gradually develop the thick skin and speech style so critical to survival in the B quadrant.
A good businessperson supervises all systems simultaneously and identifies weaknesses before the weaknesses turn into system failures. Don’t underestimate the magnitude of this job, which covers aspects of your company as diverse as product development, accounting, order processing, human resources, and computer systems. General oversight is especially important when your company is growing rapidly, because you want to make sure that as sales increase, so does your capacity to deliver. At each new level of growth, start planning the systems needed to support the next level of growth, from phone lines to lines of credit.
The best insurance for your business is admitting what you don’t know—and finding an expert to help you. You should consult an attorney about any legal aspect of running your business. However, if your cash flow is tight, seek out a lawyer who is willing to give you an hour or two of his or her time, and arrive at the meeting with your list of questions carefully prepared. Or you might convince a lawyer to sit on an advisory board, in which case you would be very lucky.
Your product, or service, rests at the top of the B-I Triangle because it is the expression of your mission. All tiers below support the long-term success of your product and therefore your business and your mission. Be careful when talking with investors not to overemphasize the importance of your product. Experienced investors know that product is the least important aspect of a business. If the triangle’s framework and lower management tiers aren’t solidly in place, then no matter how stellar the product, it won’t succeed.
Above all, managing your product or service means developing it. If you’re selling a product, then development entails oversight of the manufacturing method and process as well as pricing and bidding mechanisms. One of the most important product-development tasks is to create an atmosphere in which creative ideas bubble to the surface, resulting in a new or improved product.
Editor, Rich Dad Poor Dad Daily