The masters of growing businesses seldom disagree that the starting point for any great business is to begin with a big goal. It should be written down and it should be put in a place where you can see it – a screen saver, a fridge door or on the back of your toilet door.
Tom O’Toole, the legendary baker of Beechworth, who is a star performer on the business speaking circuit, always tells his audiences that goals are “dreams with dates on them” and if your goals are not written down “they are not on the planet”.
Jim Collins who wrote the US business best-seller Good to Great, which was the follow up on his first blockbuster Built to Last, says the top CEOs of the great US companies had one thing in common – BHAG, which is a Big, Hairy, Audacious Goal.
Sure some businesses have started small and the business founder was unaware of how good he or she was going to be at business, but after years of talking to and analysing terrific Aussie and foreign business builders, many have started with a big dream.
Lots of companies actually have started believing that they will be exporters because they know the local market can’t support the kinds of production runs that they need to make the business work.
For example, Paul Cave who started BridgeClimb knew that it was going to be foreign tourists who were going to be the massive cream on the cake.
Similarly the guys at Cochlear and ResMed were exporter-oriented from day one and in fact, Austrade’s chief economist has noted that export companies often figure at the top of productivity, best places to work and many other benchmarks of great businesses.
Michael Gerber, who wrote the book E-Myth, got a pretty good handle on what’s wrong with most small businesses. He noted that the businesses were invariably dominated by a founder who spent too much time working in their business and not enough time working on their business.
Gerber points to the franchise model and says this is what all entrepreneurs should aspire to. He is not saying you have to create a franchise but you need to make a business that works even when you are not there.
When this is done you have a business you can franchise, sell or scale up to the ultimate entrepreneur’s reward – an initial public offering. People like carsales.com.au’s Greg Roebuck and Wotif’s Graeme Wood have seen their small business baby grow into adulthood fulfilling their BHAG and it should be lesson for all business starters.
Not only should owners of start-ups kick off with a big goal, it should be one that not only has targets for turnover, profit and other key performance indicators but it should promise to create a public company, a franchise with say 300 outlets or a business that a private equity firm or a rival public company would love to get a slice of.
Mark Bouris saw this happen with his Wizard Home Loan business and John Symond recently sold part of his business to the Commonwealth Bank.
When the dream is to create a business that works without you, it is systemised, professional and is not only a magnet for customers but also for suitors who might want to reward you for creating a great business.
But even if you don’t want to sell your business, the approach of creating something with an eye to making it attractive to would be buyers, owners or shareholders, means you create a business that is nice to work in. It’s a business you can go on holidays from and, believe it or not, it’s one where you can leave the mobile phone turned off.