A rally driver wins a race by being a good driver, having a good car, and driving on a good road or track. We can liken winning in business to rally driving. To win in business you need to be a good business manager, operating a good business, in a favorable market.
A good business manager is personally effective, handles the team well, and manages the business properly. Personal effectiveness involves good time management, problem solving skills, personal discipline, goal setting, achievement focus, and belief in oneself. Handling the team well means knowing how to identify and place talent in the right roles. It also means the ability to develop the team, delegate tasks, motivate, and manage performance. It also means being able to cast a compelling vision and to bring the team together to achieve it. Managing the business properly means being able to plan and focus on things that matter. It also involves setting business goals, implementing policies and procedures, designing systems, problem solving, managing customer relationships, managing finances, performance management and reporting, and managing stakeholders.
A good business is one which is simple and whose business model is easy to understand. A good business is one which is appropriate to the business manager’s temperament and skill in a given economic environment. Some people are good at starting businesses but are terrible managers. Some people can manage small businesses but can’t lead large organisations. A good business is one which is viable in all economic seasons and provides essential products and services. A good business is one which can generate reasonable returns without requiring too much capital investment. A good business is one capable of scale but which breaks even in a reasonable time without requiring large sales volumes. A good business is one which is free from too much government regulation. A good business is also free from excessive competition for customers, suppliers and workers.
A favorable market is like a good road. You can be a good driver, with a nice car, but if the road is terrible you will take too long to reach your destination. In a business setting the road is similar to the market you choose to operate in. Some markets are better than others. Some markets have too much competition and there is no pricing flexibility. Some markets have the right customers and some don’t. Some markets are heavily regulated and taxed and some are not. Some markets have prohibitive cost structures and are prone to inflation. You can’t control what a market is like but you can choose which market to serve. Choose a market with the least amount of resistance to your value offering. Don’t sell ice cream in the village where people won’t afford; instead sell the ice cream in a busy supermarket in an urban setting. It’s also better to invest in trending things rather than in stagnant areas.
Success in business comes when the management, business, and the economic environment align favorably. Part of good business management is choosing the right business for a given economic environment. Not all businesses are suitable for anyone in a given market. You need all three elements to succeed in business; you need to really be good at management; you need to have a good business model; and the economic environment or market should be favorable to your business undertaking.
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