A friend of mine recently pointed me to the State of the Business Owner research project. This project is undertaken each year and surveys hundreds of small business owners to collect their opinions and to capture data about what is working and what is not.
The results from the most recent report clearly identified that new business growth was the top priority for business owners. This would be achieved through the acquisition of new clients and identification of new revenue streams.
But more importantly, the research also defined in strong link between growth and three important ingredients that where shared by the most successful businesses. Companies that espoused these ingredients demonstrated leadership in overall revenue, year-on-year revenue growth, owner compensation and optimism about the future when compared to firms that did not. The three ingredients are:
- Vision – just under half of the companies surveyed had a written description of the desired future state of the company, however these companies grew 50% faster that those without this ingredient.
- Plans – companies with written plans for how to achieve growth and revenue goals, along with accountabilities, grew 60% faster than those firms without.
- Data – Business owners that looked at both financial results monthly but also tracked key business metrics personally earned 60% more than their peer and tended to run larger companies.
This research validates the work we have been doing over the past 17 years here at RESULTS.com. Helping clients get clear about a desired future state (the vision) is always the starting point. The vision creates the ‘tension for change’ needed create excitement and engagement with employees about the future.
Once the vision is clear, then every firm needs a plan; a roadmap. Written plans include both long and short term priorities, goals and targets, along with action plans and clear accountabilities for who will do what by when.
And finally, data. Data is more than just financial or historic results, but also the definition and tracking of those leading indicators that can predict the future success of the business.
These three principles are also found in the RESULTS Business Execution software which drives visibility, accountability and engagement throughout the organization.
How does our firm measure up? Do you have the ingredients to put together this successful recipe?
Access to the full report referenced here can be found at stateoftheowner.com
Image credit: http://www.sxc.hu/photo/1415055