Big Idea: The Seven Disciplines of a Well-Managed, Profitable Small Business
In the world of business, success happens to those who have taken the time and effort to prepare for it and embrace discipline.
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Editor’s Note: This article from Ron Davis on the seven disciplines of a well-managed, profitable small business was originally published on Feb. 22, 2024. We have updated it as of March 12, 2024.
Here, briefly, are some disciplines for small business owners like you to think about. Ask yourself whether you and your company participate in the excellence that can be yours if you follow the tips found in this article.
The Discipline of Marketing (Including Sales)
This discipline forces business owners to not just look at the entire selling and marketing process, but also the process of bringing in profitable sales that contribute to the bottom line. Often separated, marketing and sales in managing a small business all come under the same general heading: It’s the process of every element that leads to the successful conclusion of a profitable sale!
The Discipline of Finance (Including Accounting)
This discipline forces the entrepreneur to repeatedly look at, and be held accountable for, the successful business operations of the company, from a financial perspective. It includes the reading and evaluation of financial statements on a regular basis, the financial planning process and the ability to adhere to a financial plan that has been thought out and agreed upon by senior management.
The Operations Discipline (Including Installations, Service and Warranties)
Operations—frequently referred to as the “back end” of a small business—should, more importantly, be viewed as the “heart” of the business. Without it, functioning smoothly and regularly, the business cannot and will not survive.
This discipline includes all of the elements of running a separate service and installation department, providing for a preventive maintenance program and addressing bottom line profitability from those departments.
The CEO Discipline
This discipline forces the owner/president/general manager to constantly be evaluating his business plan against projected results, while still having the flexibility to immediately shift when circumstances or opportunities change.
The Educational, Research and Development Disciplines
Yes, this too is a discipline of even the smallest companies, since once recognized, it allows for—and even demands—that everybody, at every level, continue the educational process.
At the beginning of each year, an amount of money is set aside for “research and development,” which may include evaluation of new products, new systems, installation and servicing techniques, among others.
An educational library is absolutely essential. Operations and employee manuals are certainly an element of it. Of greater importance is the commitment to excellence that this discipline insists upon.
The Business Plan and Business Planning Discipline
Once adopted, this discipline forces individuals at all levels to not only contribute and participate in the business planning process, but are held accountable for the execution of a successful business plan. This process includes recognition programs, incentive bonuses, meetings, planning sessions and management’s recognition of the entire process.
The Discipline Discipline
Yes, that’s right. It’s the business discipline that forces you to maintain the others. It’s always easier to think of reasons why not to do something than to do it.
It’s always easier to look for excuses that will allow you to deviate from the core disciplines of running a business, and once you do, all of the disciplines are affected equally.
Success is not a random happening that occurs to some people while totally avoiding others. Rather, it is what nature bestows upon us when we are thoroughly prepared. In the world of business, success happens to those who have taken the time and effort to prepare for it, are not surprised by it, and in fact, embraced all of the disciplines necessary to achieve success.
That is the first step toward the recognition of what needs to be done to make your business careers and companies successful, goal-oriented and, most certainly, rewarding.
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About the Author
Ron Davis, SSI Contributor
Ron Davis is the founder and president of Davis Mergers & Acquisitions Group, Inc., a firm that specializes in acquisitions and mergers. He has more than 40 years of industry experience.
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