How to Set Your Small Business’s Priorities
Jan 23, 2020
This post is an excerpt from our eBook, Critical Priorities: The 7 Key Areas Every Business Owner Must Prioritize. Get your free copy today!
If you're a business owner, you probably come up with a new idea for your business every five minutes. But sometimes these creative sparks are more distracting than they are helpful. If this is your struggle, it's essential that you have a process of how to set your priorities and stick to them.
Imagine you’re the captain of a boat in the middle of the ocean—and your boat springs a leak. Your crew begins to panic. They bombard you with questions.
- How fast are we sinking?
- How can we fix it?
- Are we going to die?!
In this dire situation, only one question truly matters: Where is the hole?
If the hole is above water, you can take your time fixing it. But if the hole is below water, you have to fix it right now!
Knowing Your Priorities
What’s this got to do with your business?
As the owner of your business, you have to make tough decisions. You have to know what is a priority and what isn’t. But, like most things, that’s easier said than done. Owning a business is a high-stakes game. When the margins are shrinking and you’re pressed for time, everything can feel like a priority.
For example, let’s say you own a bakery. Month to month, you stay in the green—but profits are tight. An opportunity comes up to expand to more locations, and if you want to take it, you’ll have to act fast. You know that if you expand, you might be able to triple your yields, and life could be more comfortable.
But, expansion means increasing your overhead, hiring more employees, upping your inventory—and for the next few months that’ll put you in the red. Conversely, you could stay put and reinvest your profits in your current location. You could purchase better appliances—but will that really give you a better R.O.I.? Maybe you should use that money to improve your social media presence?
Oh, and by the way, hurry up and make your choice!
Friends, all too often I see small business owners caught in this trap. They’re stressed out by the multitude of directions they could take because they haven’t placed “the first things first”—and honestly, they don’t know where to start.
Creating a Priority System
If you’re following me so far, here’s what I recommend you do. You need a priority system, a simple way to discern and visualize what matters most to your business. Each small-business owner is going to place a weight on different priorities. I can’t tell you what’s important to you—you have to sit down and decide for yourself.
To start, let’s go back to the boat example. Go ahead and draw a horizontal line on a piece of paper. Imagine that’s your “waterline”. Now, think of your business as a boat (or yacht, if you prefer) on that line. Remember, if there’s a hole below the waterline, it’ll sink you fast. If it’s above, you’ve got some time.
Now, I’m going to share with you 7 Critical Priorities. If the priority is important to you and essential to your business, then write it below the waterline. You know that if you ignore it, it will sink you.
If the priority is something you can live without—for instance, if you’re willing to cut back on employees to make your operations leaner and meaner—write it above the waterline. It’s not going to sink you.
7 Critical Priorities for Business Owners
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Mission
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Growth
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Profit
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Cost Management
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Operations
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Personnel
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Personal
Once you have this diagrammed out, making big decisions becomes easier. Instead of having to re-evaluate every time you come up against a roadblock, you can look at your priority system and you’ll know what to do. If you’re still struggling, it may be time to consider getting an outside perspective.
You know what they say: it’s about working on your business, not in your business. You can go through the motions of the day-to-day operations without ever taking a step back to think big picture. And you might stay afloat. You might even turn a good profit…
But you’ll never move forward. You’ll never advance towards where you want to go. A misstep now can drastically change the future of your company. So, make sure you know your priorities before you set sail.
What to consider…
- Do you make decisions according to your highest priorities? Or do you make it up as you go?
- How often do you consider what each decision means for your long-term success?
- Do you treat every problem as if it’s below the waterline? Above the waterline?
