Stage 1: Survival
This can last for up to two years and is the most testing time for the business and all those involved in it. At the beginning merely surviving from one week to the next is an achievement. Every new customer is a cause for celebration and every week of business a triumph.
Stage 2: Settling down
During this stage, concerns with merely surviving become secondary - though they linger at the back of your mind. Pre-occupations with simply keeping afloat are replaced with an emphasis on consolidation and consideration of where to go next. The way forward can seem fraught with decisions and difficulties.
Stage 3: Development
Having weighed up the possibilities, the business now moves forward, seeking development in new markets or investing in new technology or buildings. This is the growth period. The business achieves a certain status.
Stage 4: Building the business and its people
A business which solely develops its products and services is liable to encounter problems. People, too, need to be continually developed. The emphasis during this stage, therefore, should be on building and developing new skills within employees and yourself. You may, for example, have to develop team working skills or improve your technological or mechanical skills. But bear in mind the crucial don'ts.
- Don't move too fast Impatience is sometimes necessary but, in the early stages of building a business, it is more likely to cost you money than make it. Companies go bust often by moving too fast, trying to develop too quickly, without adequate financing or back-up.
- Don't lose control Subcontracting or passing jobs on to someone else runs the risk of damaging the fragile fabric of your reputation if it goes wrong. You have to keep control, while still being flexible, responsive and quick.
- Don't respond too slowly If a customer enquiry yields the response 'Our sales representative will be around to see you soon' your demise may be more imminent than you think. You need to respond with a firm date. No sales support means no sale.
- Moving through these stages, avoiding these common pitfalls and making the business work is likely to involve some, if not all, of the critical elements which follow - and many more.
- Remember who you are in business for. There are a number of groups whose satisfaction is paramount to your continuing commercial success. Overlook any of them and your business is likely to encounter trouble.
- Customers, clients and consumers. Is your business truly geared to their needs? To what extent is their input collected and implemented to ensure you give them what they want every time?
- Employees. Are the human resources of the business put to the best possible use or is there a great deal of wasteful duplication of roles and responsibilities?
- Regulators. There may be regulatory bodies whose activities are important to the company. Do you have relationships with any people or organizations which have a voice in forming regulations which might affect you?
- Suppliers. How are suppliers involved in the company's systems and would increased involvement from them lead to greater efficiency?
- Yourself and your family. Ultimately if the business is driving you towards a nervous breakdown or a heart attack, or driving your family apart, there is little point continuing.
- Is your family enjoying it?
- Are you developing your skills?
- How does it compare with what you did previously?
- Is running the business proving detrimental to your health?
A national advertisement for Dell Computers reads: To all our nit-picky - over demanding - ask-awkward questions customers. Thank you, and keep up the good work.' Massively successful, Dell questions 20,000 customers every day. It realizes that listening to customers and actively canvassing their opinions is a vital investment in the company's future -and not a costly indulgence.
The age of customers taking charge has arrived. Mass production is giving way to mass customization. In the early part of the century, Henry Ford was quite content to produce a car in a single color. Variation was expensive. Ford kept it simple and once observed, 'I've got no use for a motor that has more spark plugs than a cow has teats.' Now customers demand much more. When US aircraft maker Boeing asked its customers what they would like in the new Boeing 777, they requested it should have galleys and toilets which could be relocated anywhere in the cabin within hours. In May 1995 when the first Boeing 777 is produced the owners will be able to rearrange the aircraft within hours, configuring it with one, two or three passenger classes to fit the market at the time.'
The development of the Boeing 777 is an excellent example of an organization being forced, through the growing competitiveness of its markets, to make basic changes in its approach. When it began developing the 777, Boeing recognized that it was lagging behind its competitors. McDonnell Douglas and Airbus had a substantial head start. 'We knew how to build aircraft but not how to operate them. We had to learn how to think like an airline,' says Boeing's Ron Ostrowski. Boeing radically altered its product design process. Instead of performing design and development tasks sequentially it began running them in parallel. Functions were displaced by design teams which also included customers. Ideas from a British Airways team, for example, helped the Boeing designers install an extra 12 seats making the 777 more attractive to potential customers. By talking to customers and listening and acting on what they say, Boeing hopes to produce a product which is exactly right for its markets.
Customers want involvement, choice and the benefits the latest technology can give. Therefore, companies have to change their offerings quickly and frequently. This applies to nearly all businesses. If you are a greengrocer and there is a sudden rush on coconuts at your shop you will buy more. But it is just as important to find out why coconuts are suddenly popular. It may, for example, be linked to a cookery program on TV. You may then be able to anticipate next month's popularity of dates.
Customers demand products which meet their needs, delivery when they want it and easy payment arrangements. This means that everyone in your business must be able to make operational decisions rather than mindlessly carrying out repetitive processes or giving standard answers or exhibitions of helplessness when facing customer queries.
