A house built on sand only lasts until the wind blows hard enough. Same can be said about a business that doesn’t stand firmly on the ground. You can have an amazing idea, a team of brilliant all-stars and the luck of a leprechaun but what good are any of those things if you don’t have what it matters – the backbone for efficient processes that will keep an ongoing revenue stream for you regardless of where the wind blows today?
You’d be surprised but this backbone, the core of a business is built on as little as 4 decisions you need to make. What are these decisions and how to make them right? Keep on reading to discover the correct answer.
#1 – The Business Structure
First and foremost you are to understand what kind of business you are in the first place. Some of the most common business structures include, but are not limited to:
- A company. What can be said? You can have a company with employees, a board of directors, a handful of shareholders or you can work from a garage with three friends. In either case, you have shared responsibilities if you are running a company.
- A solopreneur or a sole trader. Very much like with running a company you still have the opportunity to work with or hire other people. The only difference is that the responsibilities (legal and moral) are entirely on you. A solopreneur cannot share them with co-executives, otherwise, that would be a company.
- A trust: this one is fairly simple. Others trust you with their money or assets and you manage them to make a profit for everybody involved.
Think wisely before committing to either model of running your company as each has both strengths and weaknesses that can affect your ongoing business model or the opportunities for decision-making.
#2 – The type of business
This decision affects what you will be doing and how you will be doing it. For example, an online business will use a unique set of rules, tools, and assets to stay on the float. The legal requirements for running it will also differ from the requirements for, say a family business.
You will have a set of rules you will have to follow when running a franchise business. Have you noticed how all MacDonald’s businesses look and feel the same? That’s because they can’t be any different despite the fact that they have different owners with different ideas.
On the other hand, with a home-based business, you can get as creative as you want. On the downside, you will not have the support and know-how of a successful community behind an established franchise.
You are to consider the type of business you are going for before planning your next step.
#3 – The name of a business
There is an old saying among sailors which states that a boat will only sail as quickly as its name allows it to. That’s why you don’t see too many Boaty McBoatfaces out there and every ship – big or small – has an epic, proud name carefully painted on its side.
The same can be said about any business. The only issue here is that you have to balance out two things: People are suckers for pretty things and fancy names. Even more than that, people are suckers for clarity. You will have to be creative and precise at the same time. “Meatball Extravaganza” for example, is a great name for a meatball store, while “Meatball Store” or “Extravaganza” is not. The first is too dull while the latter does not give people a clue about what the business is about.
#4 – The location of a business
This is, by far, one of the most important factors that make or break businesses. Not only do you have to consider a location where there are a lot of people passing by, but you don’t want to open next door to bigger, tougher competitors.
Location is important even on the internet, although it is treated differently there. Your domain has to rank high in search, outperform the competition on relevant keywords, it has to possess an impressive portfolio of backlinks and blog materials, etc.
Your turn now. What are some other important factors that can make or break a business? Can you name them in the comments below?