BUILDING A STRONG BUSINESS FOUNDATION
by Joelle Steele
Why did you start your own business? If you're like most contractors, you became self-employed because you wanted to be your own boss and have a financially secure future for yourself and for your family. And, if you're like many interiorscapers, you own a small business which you began all by yourself, with very little money, a lot of sixteen-hour days, and a hard-working green thumb.
But, in a recessive economy, it's difficult for even a relatively well-capitalized entrepreneur to remain financially solvent in a competitive industry such as interiorscape. To achieve long-term monetary success in a trade that is so reliant on a perishable product, requires more than just horticultural knowledge or skill. It takes good, sound business sense because interiorscaping is a business. And, in some cases, it's BIG business.
Whether you're a large, multi-million dollar corporation or a small, shoe-string budget enterprise, you share the exact same kinds of business problems. The main difference is that problems in large companies tend to get lost, obscured, or absorbed more easily than in a small business where the problems may be financially evident, but necessarily overlooked because the owner is too busy to address them. In either case, immediate solutions are imperative.
No business is without its problems. There are always going to be those daily stumbling blocks that plague even the best run organizations. But, there are some problems that go deeper than the mundane who-to-fill-in-for-Larry, what-to-put-in-place-of-the-philodendron, or what-kind-of-vehicle-should-we-get types of questions. Some problems permeate an entire organization, affecting every department and every employee. That kind of problem is often hardest to remedy because the symptoms appear to be one thing when the actual root or cause of the problem is something that seems, on the surface, to be completely unrelated.
Finding solutions to these kinds of complex problems often results in chaos since the answer to such a situation often means spending a lot of time and money, possibly at the expense of a few good employees, even a client or two, to find and then fix a problem that could have, and should have, been avoided in the first place with proper planning and organization.
Most problems can be avoided when the foundation for a business venture is first laid. This is the most critical time in any company's history. It is the moment when the owner decides exactly what things he or she intends to accomplish and then sets the necessary goals to achieve them.
There is usually more than one goal, and under any main or primary goal there are always several secondary or sub-goals which in turn have several tertiary or sub-goals under them. All of these goals have different time elements associated with them. Some will be long-term goals, such as the primary goal. As you go further down into the sub-goals there will be intermediate goals and short-term goals. Long-term could refer to as much as twenty years, intermediate could mean five years or so, and short-term could be anything from two weeks to six months or more. The exact length of time is determined by the individual who sets the goals in the first place.
Secondary and tertiary goals will change frequently and must be re-evaluated every few months and at least once yearly. As some of them are achieved, new ones will be formed, some will be eliminated entirely, and others will be modified or refined to reflect changes that have occurred within the business or in the economy. The primary goal will usually remain constant. If it is changed for whatever reason, most or all of the secondary goals will have to be changed as well. If your business is in operation at that time, it could be an expensive, difficult, or even impossible change. That is why the goal setting stage of business development is so important.
The primary goal in any business should always revolve around what you, as an individual, want out of your life. Is your fondest dream to make a lot of money? To be filthy rich? If it is, then your primary goal should not be "running a one-person operation servicing residential clients in a small geographical location." That may be what you will do to start out, but that will not be your primary goal. Your primary goal will be something like "owning a multi-million dollar, highly diversified horticultural service business."
Another life option. Do you want to make a comfortable living, be your own boss, and make your hobby into a business? Then your primary goal should be "running a small horticultural service business." Once again, you may start off as a one-person enterprise, but since those ventures are usually not destined for longevity, you should allow yourself some breathing space and consider that you will probably ultimately have an employee or two.
People change and so do their life's desires. If your life is dependent on your business, then the goal-setting stage is the time to analyze all the options, long- and short-term. If you want to be a small business right now, is there even the most remote possibility that you might eventually want to expand into something bigger, more widespread, more diversified? The goal-setting stage is the best point at which you should at least be seriously thinking about this, even if it is not what you want at the moment. Keeping your options open in the beginning will make it easier to adjust your goals at a later date if you change your mind and decide you want to do something different.
Once you have established your primary goal, you can begin to establish your secondary goals. The first of these will revolve around what you need. To define this particular sub-goal, you must determine what you already have in the way of personal assets, e.g., your horticultural knowledge, your savings account, your brother's Chevyvan, your ski club friend who is an interior designer, etc. You will build upon your personal assets and knowing them will allow you to determine what you need, e.g., an office and supplies, a sales wardrobe, printed stationery and business cards, a pressurized watering device, a membership in a local service club or networking organization, etc.
Other secondary goals will include monetary goals that will be achieved by tertiary sub-goals such as sales goals and budgetary goals. Like with your primary goal, your secondary goals will be composed of many smaller ones which eventually wind up being a master business plan.
Planning is the stage at which you take a goal and create all the steps necessary to put it into action. It is the daily process or schedule by which you operate. In correspondence with the goals you establish, there is long-term, intermediate, and short-term planning. Your plan will rely to a great extent on a calendar on which you plot all the dates by which you need to achieve particular goals and the dates for all of the individual items which you must do to accomplish those goals. If only for neatness sake, you should keep this part of your calendar in pencil.
It is often during the planning stages that companies overlook potential problems which, going unnoticed when they occur, can snowball over time, turning into major catastrophes. Even if you view yourself as having a good head for business, it is good practice to hire the right advisors during these critical stages of development so that you do not overlook anything and so that you can have an expert's opinions or ideas to incorporate with your own.
In addition to hiring advisors, planning is the time to acquire information from other sources as well. Whether or not your primary goal was the one that involved amassing a fortune and being independently wealthy, you will always benefit from reading up on what's going on in your industry and in the world at large. Contrary to popular entrepreneurial belief, you are not alone. Everything that you do affects, and is affected by, the world around you and your industry in particular.
What you acquire in the way of knowledge from books and magazines, television and radio, trade associations, all your various business advisors, (accountants, business consultants, lawyers, etc.), your friends, business associates, and fellow tradespeople, will influence the strategies you create to achieve your goals. You will learn what has been done or is currently being done and with what measure of success. You will hear all the "horror stories" and all the rags-to-riches claims to fame. You will see your current self in some people and you will see your future in the faces of others. This is part of the initial and ongoing planning process that is part and parcel to any business.
As you immerse yourself in systematically organizing and developing the methods and means by which to operate your business, you will inevitably recognize how effective and well-spent your time has been in such a process. It will also become evident that in order to successfully implement your plan you will need to develop a standardized methodology for carrying out your company's daily activities.
Standardizing a business, especially for many entrepreneurs, brings out the worst fears of a red-tape bureaucracy. There is often a real resistance to such a possibility, based solely on the negative experiences of some individuals in the corporate world. This is truly unfortunate, because it is the lack of standardization which most often creates losses for a company in terms of money, assets, employees, clients, and even image. Incorporating a comprehensive yet flexible system of policies and procedures for a company, can provide a framework for growth and the achievement of goals, by encouraging efficiency in the very areas where most business losses occur: the employment ranks.
Policies and procedures are normally dictated in the form of manuals but they are usually treated as two separate things. Policy typically refers to the administration of the personnel management philosophy which a company adopts in compliance with state and federal labor laws. A policy manual can therefore be expected to contain everything an employer or employee could possibly want or need to know about: personnel recruitment, termination, disciplinary action, vacation payment, sick leave, tardiness, theft, vehicle usage, reimbursement of business-related expenses, training, maternity leave, insurance, pension plans, profit sharing, payment of wages, salary reviews, and promotions — just to name a few.
Procedures are usually outlined in an operations manual, (sometimes called a procedure manual), which may also incorporate a training manual(s). Procedures are the methods by which each job or job task is performed. These manuals contain step-by-step, detailed explanations about: maintenance techniques, (how to water, clean leaves, fertilize, prune, deal with problem clients, fill out paperwork, etc.); office tasks, (formats for letters, how to work the switchboard and the computer, how to assemble a proposal or a bid); sales methodology, (how to follow up on a lead, how many cold calls to be made per week, proper sales attire, dealing with prospective clients, interfacing with other departments, points of negotiation, closing techniques, etc.); and, all the other detailed chores performed by designers, purchasing agents, inventory clerks, bookkeepers, supervisors, and whatever other kinds of positions and accompanying tasks exist in a particular company.
This article last updated: 07/23/2002.