What does your business do, how do you do it and for whom? How should you design your organization, the people, roles, processes and management systems? These answers are dependent on what you want from your business — financially and in your day-to-day lifestyle.
Let’s walk through the strategic planning and management systems frameworks that put you in control of your business, so you can build it your way.
The most important place to start is a place that most business owners never go. Do you want to build your business to be sellable? Or do you want to build your business to generate cash flow — income for you, the owner?
While a sellable business and a cash flow business have a lot in common, there are significant differences between these two concepts. If you want income, or maybe even security, you can focus on building a strong cash flow stream, and you can use that as your personal income to get what you want. If you want control, managing for cash flow works great.
What if you want flexibility, freedom, or financial independence? Are you motivated by achieving a huge impact through your company? These motivations call for strategies and systems that operate at the highest level. You need to build your business so it has transferable value, from the perspective of investors or a future buyer. Whether or not you intend to sell, a business that is sellable is also positioned to give you freedom.
The first step in building your business around your “what” is clarifying your vision. As you articulate where your business is going, how it acts, what it looks like, your vision will align your team and everything your business does around what you want from it. A clear and compelling vision provides practical benefits. You get clear guidelines and criteria for decision-making, and long-term direction that guides near-term plans and actions.
To make this a practical exercise, we borrow from Gino Wickman and the Entrepreneurial Operating System (EOS). EOS is the most practical and effective framework that we have seen to envision, lead, and manage a business. For your vision to be clear and actionable, we need to understand the mission of your business, a compelling 10-year target of where you’re going, core values, who your business serves and how it’s unique, and how we know if the business is on track.
Concepts like mission and brand can sound like business buzzwords. That’s where EOS can help. Think of your mission as the “purpose, cause, or passion” that drives everything you want your business to do. It will guide your team as you strive for greatness and work through challenges. Your brand is clear when you know who you serve, what makes your company unique, your proven process, and the brand promise. You can pull these together to tell a clear and compelling story about your business. Your story will create clarity and draw in your target market.
We mentioned a 10-year target. While this adds focus to your vision, the real power is enabling you to craft a three-year picture. This includes strategic objectives such as revenue, profit and other key measurables. Your three-year picture also describes the attributes your business needs to have within three years to know that you’re on track for your 10-year target. This practical guidepost will clearly tell you whether you’re on track to achieve your vision.
Your vision, mission, brand, and strategic objectives all come together to guide your business with practical and actionable clarity. This puts you in control of how your business operates, so you can get what you want from your business.
Our next article will get deep into how EOS can drive your business. We want the clarity that you’ve created to give your business “traction” for continued progress towards the things that matter to you. •
Dan Bensema helps build and capture business value to achieve the owner’s purposes. He can be reached at danb@realbusinessvalue.com or dan@svwealth.com.
