Business Fundamentals

Posted on October 31, 2017 by Peter Nielsen, One of Thousands of Career Coaches on Noomii.

Business Fundamentals

In this article series, we will explore some of the fundamentals a business leaders need to address to get their company off the ground.

The mission statement: The basis for a company’s strategic planning

A mission statement outlines a company’s underlying motivation for being in business. It spells out the contribution to society that the organization aspires to make. The mission statement is not a strategic objective, but rather the basis on which the strategic objectives and strategic plan are developed. This ensures that the startup’s goals derive from the basis on which the company was founded.

Not everyone agrees with the value of a mission statement. And many companies do well enough without one. We believe that creating a mission statement is important for startups. A well-formulated mission statement can form the nucleus of the startup by identifying what unites the stakeholders (customers, shareholders and employees).

Where does the mission statement fit with other company statements?

The mission statement appears at the first level in the hierarchy of company statements:
• Mission: Why we exist
• Values: What we believe in and how we will behave
• Vision: What we want to be
• Strategy: What our competitive game plan will be
• Balanced scorecard: How we will monitor and implement that plan

A mission statement serves as a guiding light for the company when creating the various company statements, although it is the least specific directive.

The mission statement describes a company’s objective, which is the first element in the company’s strategy statement. The objective is a definition of the ends that the mission (or strategy) is designed to achieve.

Building your startup’s mission statement

The elements of a mission statement may include:
• Corporate values (for example, environmental policies, employee policies) to create a positive sense of identity
• Strategic elements (for example, product definition, market definition)
• A business definition to establish a sense of purpose, identity and commitment for employees, customers and corporate stakeholders.

What to avoid in creating your mission statement

• Do not craft a mission statement that says nothing unique about your company or products. A generic mission statement serves no purpose.
• Do not overuse expressions that contain words such as “best,” “communities,” “customers,” “excellence,” “leader” and “quality.” According to Guy Kawasaki, avoiding these terms makes it easier to create a unique mission statement.

Questions to help startups frame their mission statement

A mission statement may be as brief as one sentence or several pages long. The following questions will help you frame a mission statement:
• What business are we in? What (generic) needs are we serving?
• What type of organization is this?
• Why do we exist?
• How do we serve customers?
• What is the scope of our business? What markets do we (and don’t we) occupy?
• What assets and skills do we bring to the market?
• How do we believe that market will grow and develop in the future?
Source: MaRS

SWOT and Strategy

Having a clear understanding of both internal and external factors is essential for a successful business strategy. The SWOT analysis is a simple yet effective tool for understanding those factors. It will highlight the Strengths and Weaknesses (internal) as well as the Opportunities and Threats (external) for a certain company or project.

Strengths

The first step when performing the SWOT analysis is to define your strengths. If you are not sure about those, just ask yourself some questions, including: What makes my product or service unique?, What compliments have it received from customers?

Example of strengths
• expertise around a certain topic
• web designing skills
• creativity or innovative ideas
• a network of influential people

Weaknesses

Once you have identified the strengths you will do the same for weaknesses related to your company, product or service. Weaknesses can emerge from problems that you faced over the past. Alternatively you can also think about competencies or areas that could be improved.

Example of weaknesses
• lack of technical knowledge
• lack of blogging knowledge
• poor writing skills
• poor online marketing skills

Opportunities

After analyzing the internal factors, you will need to tap the external environment, which comprehends other companies, industry changes, etc. Essentially everything that is not under your control. Opportunities usually emerge from changes, therefore you need to pay attention to what could possibly change in the near future and how your company could benefit from that.

Examples of opportunities
• joining a network
• joining an advertising network
• exploiting a new niche
• leveraging a new service

Threats

The final step on the SWOT analysis is the evaluation of possible threats. The threats can appear either from external changes or from internal weaknesses that have not been mitigated.

Examples of threats
• technical problems (i.e. server downtime, loss of data)
• your product or service becomes obsolete
• SEO problems
• consumer confidence

The SWOT analysis will give you a clear understanding of the internal and external factors affecting your company. Once the evaluation is performed you will be able to focus on your strengths, improve the weaknesses, benefit from external opportunities and protect yourself from possible threats.

Secrets of fast-growth companies

What makes a business grow fast? We asked the leaders of fast-growing companies how they work, think and thrive.

Leap into new technology
The Data: 81% of the fastest growers we surveyed said they actively seek out the latest innovations.
The Secret: Embrace cutting-edge services, devices and apps, even if they’re still proving their mettle.

Know where the time goes
The Data: Employees of fast-growing companies are twice as likely as their no-growth counterparts to track how they spend their hours.
The Secret: Make the most of your day by scheduling tasks, staying on target and taking a moment to assess your performance.

Lend an ear
The Data: Three out of four leaders of fast-growing businesses frequently ask their teammates for advice.
The Secret: Cultivate relationships with your co-workers and peers outside your company. Turning to them for a helping hand or second opinion will improve how you make decisions.

Build your core strength
The Data: Fast-growing companies are twice as likely to outsource non-core functions.
The Secret: Focus on what you do best and leave the rest to the experts, whether it’s payroll, marketing, research or IT.

Set your direction
The Data: More than half of fast-growing businesses set goals, compared to one-third of no-growth companies.
The Secret: Keep driving your vision forward, but never forget to create and consult a roadmap for the future.

Catch your breath
The Data: Employees of fast-growing companies are 40% more likely than slow growers to take regular breaks throughout the workday.
The Secret: Set aside time to eat lunch, stroll around the block or simply collect your thoughts. These free moments can sharpen your focus and fuel creativity.

Source: Google works

Focusing on Benefits – not Features

Too many businesses concentrate on the features of their products rather than how those features can benefit their customers. By purely focusing on the benefits that consumers will receive, you’ll be able to talk to your customers in a way that relates to them, while giving them valid reasons why they should purchase your offerings.

Understand the difference between features and benefits

A feature is what your product or service has that makes it better or different from the competition. It’s a characteristic of the product or service. A benefit is something that’s advantageous or good. It’s a positive for customers who buy it.

One example is a new computer with all the specifications listed. For example, it has 8GB of memory – a feature. However, it doesn’t tell the customer how those 8GB will benefit them. The benefit should be promoted, informing customers that they’ll be able to use more applications at the same time without any loss of speed.

Customers buy benefits

A benefit only really exists when a feature matches a need. They’re specific and personal to the customer so if your business can express the benefits of your product or service in the right way, customers will purchase based on those benefits they expect to receive.

For each feature that you introduce to your customers, make sure you back it up with a benefit statement. Emphasize the benefits of your product or service but use the features of it to help get the message across.

Matching benefits to customer needs

All customers have needs and wants – they have problems that they require solutions for. You’ll be able to plan effectively if you begin with a customers need. Fulfilling that need better than any competitor will ensure your product or service is on the road to success.

Create the product or service that will satisfy the need. This is a more logical process than beginning with what you have to sell, then not knowing who to sell it to.

Market your product or service by informing customers of its benefits. Those benefits should match the needs of your potential customers. For example, you may sell mobile phones and have discovered that your customers really need quality built-in headphones to Skype clients while in transit.

Match this need by advertising your new phone as one that comes with quality headphones so customers can receive and make Skype calls on-the-go without sound issues (a benefit for the customer), rather than raving on about the specifications of the headphones (features).

By focusing on the benefits for your customer, you’ll be in tune with what they really need and be able to provide them with real solutions – and communicate the benefits they expect.

Testimonials

“I’m very selective in the products that I expose our company to, as it’s very difficult to quickly learn enough about a company to have a real impact without burdening the management team. Damian and Peter did an excellent job selling their consulting team’s skills and then followed through on what they sold and over delivered on the project.”
Doug Burgoyne, Founder
Frogbox, Inc.

About Frogbox:
Moving is rated as one of life’s most stressful events. FrogBox was created to fill a need for a convenient, cost effective and environmentally friendly alternative to using cardboard boxes for moving. Our purpose is to make your move as easy and affordable as possible while minimizing the impact on the environment.
Frogbox have secured financing from celebrity investors on the CBC television show “Dragons’ Den” not once, but twice. The little company have expanded to 19 franchise outlets, and Burgoyne have been busy building a solid company while bettering the world.

“Damian and Peter were great through our consulting process! They held many meetings with us to evaluate our business, customers and staff, which enabled them to put together an accurate and achievable plan, to further our business growth and success. They offered great advice and support during the entire process as well as after. We are very happy that we decided to bring Damian and Peter in to help with our growing organization.”
Sonya and Brian Perkins, Founder and CEO
Forever Yours Lingerie

About Forever Yours Lingerie:
Forever Yours Lingerie is a Canadian bra and lingerie store in the heart of Langley, British Columbia catering to women of all sizes. Although personalized bra fittings are our specialty, we also place an emphasis on sourcing and stocking the best lingerie, sleepwear, swimwear, and shapewear brands for women, regular and plus size. Shop with us online or visit us at our beautiful store in Langley, BC for an exceptional lingerie shopping experience.
Forever Yours Lingerie was founded in 1996, by owner Sonya Perkins after she experiencing her own heart-breaking search for support wear and lingerie. From her small start-up store, to the 6000 sq/ft store that it is today, Sonya is still dedicated to making Forever Yours Lingerie the first and best choice for women in the Lower Mainland to find pieces that will make them feel gorgeous, from the outside in!

Your Essential Partner

Running a small business is exciting, challenging and stressful all at once. It takes a special person to be able to handle all the demands of a small business, while at the same time carry the final responsibility for everything. Lots of small business owners initially started their entrepreneurship based on a particular attraction to the business itself. However, as the business grows over time and become more and more complex with an increasing amount of moving parts, it becomes necessary to move the focus from working in the business to working on the business.

Still you are not alone! I am here to help with anything big or small. You may want to have support in developing your future strategy or pivot part of your business to position it for greater strength. Alternatively, you may require extra focus on your current operation to ensure it operates efficiently and is scalable as you execute on your future strategy. Or you may face new leadership challenges which touches at the heart of the organization and everybody’s desire to go all the way.

Running a marathon on your own requires a special psyche as well as a broad skillset to support you in your day-to-day. Running a marathon as part of a team brings in synergies, which can exponentially affect the outcome in the long run. When this team is made up of individuals driven by a deep passion for contribution magic can and will happen.

Getting the edge in business, requires a number of crucial components to all fall into place. Renewing oneself and continually staying relevant with existing and new clients and customers requires one to innovate and identify product or services, which allows the company to provide even more value add. Optimization of existing product and services is another angle which can be used to maintain this relevance. The center for either approach is the successful implementation, which ensures that the vision becomes reality.

It’s often said that the financials are the lifeblood of any company. Without that under control the vision and mission of the company will never be achieved at its full potential. A strong grasp of the monthly cash budget and the various financial statements as well as a deep analysis of variances and bench-marking within these numbers, is fundamental to enable smooth running company.

Irrespective of what you may be facing, I can help! My satisfaction guarantee to you, is that we will actively work together to develop a suitable plan for your business which you can fully endorse. If at any moment you feel that you are not receiving value, you are free to terminate the relationship immediately without any further notice.

Peter Lykke Nielsen, MBA, ACC, CPA, CMA
Performance Coach and Business Consultant

peter.lykke.nielsen@gmail.com
+1 604 338 6555