The visionary is overjoyed as his ideas are playing out before his eyes. He cheers, "Let's keep going!" which leads the business into phase 3.
Phase 3: White Water
This is exactly what it sounds like. You’re holding on for dear life and just trying to keep everyone in and stay alive. This is not because things are going horribly wrong, quite the opposite actually. You've got a lot of business, you're just not sure how to handle it all. During this phase, Business2Community says your challenges are increasing revenues, increasing customers, and effective management. This is a terrible place to live as a business and put a ton of stress on the team.
The reason why this phase happens is because there aren't any processes, systems, or delegation in place. So, processors get hired here to develop systems that stabilize the business.
This is where you find predictable success, but don't let the processor take over! Don't allow them to do checklists for the sake of checklists. Remember, the visionary always needs to take control.
It's important to know your leadership style, and also know the leadership styles of your team. Check out this link to see what your leadership style is.
4. They Forget to Risk
Sometimes entrepreneurs and small business owners misunderstand the use of risk. Risk is a massive opportunity, and an asset to be leveraged. I don't mean go stand in the road and hope gold falls from the sky without getting run over. Obviously there are calculations to be made, but if you're so averse to risk, you will never get to go to the next level. Use it wisely, but don’t be afraid of it.
5. They Don't Put Metrics in Place
A business metric is a quantifiable measure that is used to track and assess the status of a specific business process. To be effective, business metrics should be compared to established benchmarks or business objectives. ( I use CYFE as my metric dashboard so that my numbers are always in front of me).
In other words, you can't fly the plane with your entrepreneurial hunch. If you’re just looking out the window and not watching the instruments, you don’t have control over the aircraft.
Your metrics can be activity based or measurable metrics. For example, one of our activity metrics at my company is that we respond to all customer inquiries by the end of the day. One of our measurable metrics is to keep our customer turn rate below 10% monthly. If we can maintain those metrics, I know we're doing a good job of keeping our customers happy.
When you've establish accurate metrics, they give you control. If you need some help brainstorming, here are three primary things you need to be able to measure in order to grow your business.
- New Customers- Once you get in the groove of your business, this can be something you take for granted. It's easy to forget that in order to keep growing, you need prospects and you need new customers. On average, how many customers are you generating each month? What is your cost per lead?
- Average cart or Transaction Value- On average, do you know how much someone spends at your business or on your website? You want that transaction to be as high as possible. These first two metrics are super important. New customers X a high cart value = cash flow.
- Customer Life Time Value- It is our tendency to focus on this one first, but customer lifetime value is more of a long game. The first two metrics are actual oxygen tanks to the plane. This is something you install as an extra fuel tank once the plane is already up in the air. With that said, it is so important to have repeat customers, and to be able to measure how many you have.
It's crucial to be able to measure these metrics, so that you can increase them. And if you can increase them, your business is going to grow exponentially.
6. They Don't Hire to Core Values
You have to hire awesome people and you have to hire to core values. Even if you are in a profession that requires a high level of skill, you need to hire to core values. You will find yourself in way less HR problems if you do this. You could have the most talented employee with all the right credentials, but if they are not coachable, if they are not willing to receive criticism, get ready for havoc to wreak and the ship to sink.
Entrepreneur.com says, "Entrepreneurs work hard to build and cultivate the culture of their organizations. But company culture doesn't result from an edict from upper management. It’s made up of the work and values of every employee. Each new hire can contribute to sustaining or eroding that culture."
That could not be more true. I have worked very hard to establish a certain culture for my business, and I'm sure you have too. If you're new to this idea of culture and core values, I'll share the core values I hire to to give you an idea of things you may want in your business culture.