Tim Bainton and Alex Planes
Every entrepreneur wants a thriving and profitable business. But despite our best intentions, most businesses will fail within a decade, and many fail far faster than that.
There are two primary reasons why businesses fail. One reason is a lack of capital. If your business can’t keep the lights on, it’s not likely to last much longer than the next electric bill. But one of the most common reasons for business failure is that its owners and managers simply didn’t know enough about building and operating a business. If you’ve ever been to a retailer or a restaurant and wondered how they managed to stay in business, you’ve probably identified an inept operation that’s on its way out already.
Experience will always be the best teacher. There’s no book or how-to guide that can cover every single point of failure for your unique entrepreneurial situation. But you can start to understand the basics of business operations through this brief guide, and use it as a foundation on which you can build a stronger enterprise.
Every business needs a way to collect payments from its clients and customers and pay money owed to employees, suppliers, and contractors. This means getting a business bank account, and setting up a payment processing system.
Keeping your company’s money in a company account rather than in your personal account will make it easier for you and your accountant come tax time. It’s generally free to set up a business bank account, and doing so will also help you establish a business credit profile. Having established business credit can be enormously helpful down the line if you ever try to secure a loan for your company, but it’s not something most entrepreneurs consider during their journey until it’s too late.
There are many payment processing systems that offer a range of functions and fees. You may need one to effectively manage recurring subscription-like payments if you operate a gym or a training operation that depends on long-term commitments from clients. You might prefer one that has low fees and is easy to use online, so your clients can settle their accounts in seconds and you won’t lose big chunks of your revenue to processing charges. Whatever you choose, make sure you go with something you’ll be comfortable using for a long time. Your payment processing system should be able to grow with you and enhance your business rather than impede it in any way.
Every business that processes payments has customers, which means that every business should have a customer relationship management system, or CRM. There were a few CRM options when we started in business more than a decade ago, but the CRM landscape has exploded with high-quality competitors over the past few years. The CRM tools available to today’s businesses are simply light years beyond earlier systems.
Most top CRMs are now cloud-based, which allows you to access and update all your customer data from any device, and many of them integrate with other essential business applications — like your payment processor. There are CRMs purpose-built for health clubs and fitness franchises and CRMs designed for virtual and recurring sales, and there’s a CRM for everything in between. Most top CRMs will grow with your business, so you should take time to select one that’s affordable, flexible, expandable, and offers functionality that’s highly relevant to your business model.
When selecting software to help you manage your business, try to keep things simple. The point of having tools is to make your life easier, not to bog you down in complexity and force you to learn a thousand different widgets and a hundred configurations. It’s easier to switch systems when you’re small than when your business is sprawling, so if you find your initial selection less useful than you’ve hoped, feel free to switch. The earlier you rule out bad tools, the better.
Systems for success
Every business has access to the same software, but most businesses still fail. It’s often not because of bad tools, but because of bad systems.
A system is simply a standardized way of doing something. It helps streamline your workflow and makes it easier to get all employees on the same page. It could be as simple as recording a client’s progress in a particular format, or as complex as a corporate branding guide that details all the ways in which employees should represent your business to the public.
Every organization thrives when systems are in place to make routine tasks easier and to simplify complex processes. If you repeatedly perform the same tasks or processes for your business, you should strongly consider creating a system for managing them — especially if you plan to have employees handle these tasks in the future. Employees need training, and defined systems are often the best way to direct them in handling key functions.
If you’ve gotten this far, you might be considering scaling up with employees, or you may have hired some already. In this series’ final article, we’ll take a look at some good approaches to hiring, training, and managing employees for the success of your business.