Either simply a looker-on or a player in world of business, you see millions piling into accounts of world's most famous businessmen and naturally question pops "How?", wondering what is alchemy they've discovered? Yet, there is no magic here - it's mostly pure strategy. And what it takes to spot it and make it real.

Strategy

Identifying the best strategy for your business is key to all success.
It should give you lift that makes a difference. The art for your strategy success is planning.

• settling a vision for your business
• defining a mission
• setting out objectives
• establishing values, goals and programs.

Vision

It is all there, it is all important, but first there is vision.
So, is vision a spark, is it a moment? How much is inspiration and how much hard work? Is it 99% perspiration and only 1% inspiration? Can we all be geniuses?
According to Edison's theory I would say yes, if we are committed to hard working, as it is primarily hard work that makes a genius. Inspiration comes on way, when involved in as much action as you can handle. Contrary to conceptual meaning, inspiration seems to be driven by propitious conditions - in this case, by work.

Hard work

So, what really happens behind fairy-tale success stories is usually not what some would expect - a brilliant, extraordinary, never heard of discovery that changed world, but, disappointingly enough, plain hard work. What these people have is what I would call "industry intelligence". How is it acquired? Working of course. That is, sharply aware of their industry environment, learning all rules and deeply involved in their own businesses, success people have at some point of activity a vision for their business that proves to be a winner - revelation naturally produced as a result of their work commitment.

Let's take example of three American legends: Sam Walton, Warren Buffet and Bill Gates. What do they have in common? The winning vision, winning strategy.

Sam Walton

In case of Sam Walton, no new, innovative business models were launched. He followed existing low-price retailing pattern but competitive successful strategic approach was that instead of focusing on large cities he took his business to small towns becoming low-price leader in rural towns.

Warren Buffet

Warren Buffett's success resides in his different approach to value investing. While usually investors look for stocks they believe undervalued by market, Buffett does not take into consideration stock market aspects, such as for instance supply and demand ratio. He analyzes stocks on basis of their potential as companies. He is interested in long-term results, such as ownership in companies with capacity of generating money, namely, companies with a strong name, great historical results, strong management and industry expertise.

Bill Gates

Neither is case of Bill Gates to have made extraordinary innovations. Rather than innovation, he had ability to put together other people's ideas, thus producing big hits and making a profit. He did that first when adjusting BASIC programming language for Altair 8800 (first PC) - neither of which was his original creation. Then, same happened with DOS, which Microsoft bought (the original version was QDOS) and adjusted.

No society in world is better or more prolific at creating new businesses than United States capitalistic system but often we are so busy commercializing ideas and starting new ventures that we don’t take time to learn basic, successful management principles that have been developed by our larger companies.

Many entrepreneurs are technical experts in what they do but start a business without any formal training or experience in management practices and principles. By “management” here we mean business of successfully managing non-technical side of business, “back room” activities. As a result of inadequate management, many small businesses fail in early years. They fail not because of a weakness in product or service concept they have, but because business was not properly managed in back office.

Once a business has emerged or grown to a certain level, management techniques must change or business will run into trouble. For many small businesses this level is $1-3 million in annual sales or 5-15 employees. Sometimes critical point is smaller and sometimes it is larger, however, when it occurs, owner or manager of a small business must evolve, morph or otherwise change from a manager of things to a manager of people and from a technical expert to a strategic thinker.

This is often a difficult task because of ingrained habits developed over time but failure to grow as a manager is a major, perhaps major reason why a business will falter, stagnate or even collapse under its own weight.

But what do successful businesses have that troubled businesses don’t? First of all, owners of successful businesses have developed personal characteristics that exhibit themselves in their businesses:

•Invariably they have a positive attitude towards their business and life in general.

“Twenty years from now you will be more disappointed by things you didn't do than by ones you did do. So throw off bowlines. Sail away from safe harbor. Catch trade winds in your sails. Explore. Dream. Discover.” Mark Twain

•They are committed to their effort.

“The only place you’ll find success before work is in dictionary.” May B. Smith

•They are patient.

“Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage." Victor Kiam

•They are persistent.

“Many of life's failures are people who did not realize how close they were to success when they gave up.” Thomas Edison

Secondly, owners of successful businesses have developed a business blueprint called a Strategic Business Plan that clearly describes their business concept, their mission and their philosophy of business. In this document, they have set personal and corporate goals and set out specific time lines and strategies to achieve them.

Thirdly, owners of successful businesses have developed an Organizational Structure that functions as a well-oiled machine. This structure, including all its policies and procedures, encourages all associates to perform to their utmost capabilities. It rewards those who excel in proportion to their contributions. It also disciplines those who deviate from acceptable behavior. Positions, tasks, duties and responsibilities are defined and communicated and performance is routinely measured. Training, job enrichment programs and incentive compensation plans are designed to encourage each associate to excel. Successful owners view their associates as their most valuable asset and resource.

Fourth and last, owners of successful businesses have developed Operational Support Systems. These may be financial or non-financial, manual or automated. The objective of these systems is to support and make efficient all activities of organization. Well structured, they also relieve management of many day to day routine activities, giving owners more time to be strategic thinkers. The information provided by these tracking systems provide critical information on sales, cash flow and other financial performance data so that senior management can take timely action as change occurs. Red flags appear early, before problems become unmanageable.

IN SUMMARY, THE FOUR KEYS TO SUCCESSFUL SMALL BUSINESS MANAGEMENT ARE: (1) Owners have developed habits and traits that are Positive, Committed, Patient and Persistent. (2) A living Strategic Business Plan is in place. (3) An Organizational Structure has been developed that encourages people to be their best and helps them do so. (4) Operational Support Systems are used that track performance and relieve senior management of daily detail yet supply them with critical data to manage business.

Let’s go a littler deeper into what is meant by a Strategic Business Plan.

Successful businesses operate within a planned framework. A Strategic Business Plan is written for a minimum of three years or two years beyond current budget year. The plan describes company’s mission to serve its customers. It analyzes its corporate and marketing strengths and how they will be exploited. It addresses its weaknesses and how they will be overcome. It identifies its target markets and pricing strategies and it identifies and describes strategic alliances or business partners that may be crucial to success during planning period. The plan describes positions on any other issues seen as critical to long term health or viability of business.

With a current and meaningful business plan company stands its best chance of continued success and achievement. Without a viable business plan company runs risk best described in old adage: “Failing to Plan is Planning to Fail”.

Now let’s look a little deeper at what we mean by Organizational Structure.

The basic building blocks of organizational structure for a business are:

•An Organizational Chart depicting key functions of company operations and reporting relationships between functions

•Job Descriptions for managers, supervisors and professionals that detail reporting relationships, physical/mental/special job requirements, skills, duties and responsibilities and standards of performance for each function

•Task and Duty Lists for plant workers, utility personnel and other laborers that detail reporting relationships, physical/mental/special job requirements, skills, duties and responsibilities and standards of performance

•An objective Job Performance Evaluation System that measures performance of all employees and encourages continuous improvement