April 26, 2017, by David McCauley – American military veterans have a long and proud tradition of building and leading U.S. businesses. Companies like Sperry Shoes, RE/MAX, RideScout, FedEx, and Wal-Mart were all co-founded or founded by U.S. veterans. Time spent in the service teaches the importance of preparation, instills discipline, and helps hone leadership skills. All of these traits help prepare individuals for success as business owners.
Each of the above-listed companies had the benefit of military-trained leadership but was combined with solid business know-how. You too can replicate their success with careful preparation. Creating and leading a successful company requires many traits but also demands a strong foundation. The three building blocks for a great company are:
- A positive company culture
- Good cash flow
- The capability and willingness to grow
The U.S. military is renowned the world over for its tight-knit units and bond between military personnel – both current and former. Replicating that to some extent outside of the service is difficult, but necessary. Having a great company culture is important regardless of what type of business you run.
Employees and managers both need an environment in which they can bring their best selves to work each and every day. This means team building exercises, constructive feedback, sticking up for each other through thick and thin, and ensuring that there is potential for growth and advancement.
Your business should be seen as a career destination rather than a mere waystation. Give your employees a place to belong and treat them well because job satisfaction directly correlates to employee retention. It doesn’t matter if the work is hard as long as employees feel valuable and appreciated by their team.
Having a great company culture counts for little without a solid financial foundation, however. You cannot take care of your customers or employees without sufficient cash flow in your company. Cash flow is the lifeblood of your business and keeps everyone paid, profitable, and happy. It must be carefully managed and documented, just like any supply line out in the field.
Being in the “black” gives you wiggle room that you can invest in growing your business, put toward a company reserve fund, or pay operating expenses. Positive cash flow is always the goal because money gives you options and flexibility.
There are several company policies that you can adopt to help keep cash flowing regularly into your business. Anthony Andrews at Intuit Quickbooks highlights three important cash flow policies:
- Get money up front if possible: Requiring down payments or upfront amounts from customers or clients helps cushion your company until work is complete.
- Encourage prompt customer bill payment: Carefully explain the late fees or other consequences that may be incurred if payment is late. This can be a sufficient motivator for customers to meet their financial obligations on time, and ensure that those funds are in your account when they need to be.
- Pay business bills when due instead of early: Accidents and emergencies happen. It is better to keep that money in your account until needed. If your building’s power bill isn’t due until the 25th, don’t pay three weeks early.
Once you possess the capability of growing, you must be willing to do so. It’s easy to get into a comfort zone at any stage of the lifespan of your company, but you must resist becoming stagnant. Whenever possible, innovation should be prioritized.
This growth should never be at the expense of your company culture or cash flow. Cutting corners to get ahead can have disastrous negative impacts on company growth. It’s important to define early on “who” your company is, and make sure that everyone understands their role in that culture.
Sometimes your company will make mistakes or suffer missteps. It’s okay to stumble. Each mistake is an opportunity to learn and grow. No business owner will nail each and every aspect of running a successful company on their very first attempt, so it’s important to continually learn and grow. Preparation comes in two flavors: anticipating future growth and having contingencies if things go wrong. This is best represented by the pursuit of lifelong business education.
I previously mentioned the necessity of reserve funds. Should you lose clients or face unexpected business expenses like server data loss, backup money will help keep operations running and prevent the need to lay off any employees. A company savings account can also come in handy if you want to expand operations, purchase new equipment, or otherwise improve your business without cutting into your bottom line.
At the end of the day, you are responsible for ensuring the successful operation and funding of your business. The leadership capabilities the military instilled in you will help as you lay the foundation for the great organization yet to come. Build a culture of camaraderie that Gunny would be proud of and you’ll attract quality recruits to your organization. Above all, always keep growing as a leader and an organization.
About the Author: D.M. McCauley is a former U.S. Navy sailor who worked in Intel. After the service, he has dedicated his time to writing and traveling with his significant other.