What Makes a Business Successful? 5 Needs You Have to Meet
Are you unable to find what your business needs? Are you guessing why some days go well and others don’t? Are you trying to keep your business alive but never getting ahead?
“Many owners struggle because we get lost,” says Mike Michalowicz, the author of six best-selling books for business owners and entrepreneurs, including Profit First.
It’s hard to find the right course of action without knowing exactly what your business needs. To find your way, let’s get back to basics and talk about what makes a business successful.
At Jobber Professional Development Day (now Jobber Summit) on March 24, 2021, Mike spoke about what makes a business successful. He shared five considerations that make up the hierarchy of business needs, which we’ll go through in this article.
You can also watch the session recording here:
What is the hierarchy of business needs?
In psychology, human needs are often represented on a pyramid. Our most basic needs, like food and water, are at the bottom. As each need is satisfied, we can move up to the next tier. We can’t jump ahead or the whole pyramid will fall.
Just like people, businesses have needs. Building on the pyramid model, Mike Michalowicz created the Business Hierarchy of Needs to describe the five things you need to make your business successful.
You can’t address all needs at once, and you can’t start with a higher need if you haven’t fixed the one below. We’ll go through each need in order and give you tools to satisfy each one and help your business thrive.
What are the keys to a successful business?
Here are 5 must-haves for running a more successful business:
1. Sales: Keeping the lights on
Is your calendar full of blank spaces? Are your workers sitting around the office with nothing to do? If so, you might have a sales problem.
Sales bring money in the door so you can keep your lights on and your workers paid. In the same way that people need food, your business needs money to survive.
This is your most basic need, and it’s the foundation of what makes a business successful. So start thinking about where to find work and how you can win it.
Try these ideas for winning more sales:
- Invest in your marketing
- Set up an online presence for your business
- Use this sales script to sell your services
- Convert more quotes into jobs
- Create repeat clients
If you have plenty of work on your agenda but your business is still struggling, you need to look at the next tier of the business hierarchy to see where the real problem might be.
READ MORE: Try Mike’s 3 marketing tips to help your business stand out
2. Profit: Reserving and building financial gain
If your sales figures are fine, your service schedule is comfortably booked up, and you’re still struggling, you might have a profit problem.
Profit is reserving and building up money over time. It’s how you get paid as an owner and continue taking care of the company, even during a slow season. Without profit, your business might survive, but it’ll never grow and prosper.
Instead of chasing more sales from more jobs, focus on getting more profit out of the jobs you already have.
Here are a few ideas for generating more profit:
- Test out our profit margin calculator
- Use our profit forecasting tool
- Expand your services or upsell existing ones
- Develop a services pricing strategy
When you have a structure in place to improve your margins for future jobs, profit becomes a habit. This means you can spend less time thinking about money and more time focusing on your other business needs.
3. Order: Putting people and processes in place
If you have steady sales and a healthy profit margin, but it feels like there’s a new crisis every day and nothing is working properly, you might have an order problem.
In a business, you can create order by connecting with other people and building processes that link everyone together. This system operates outside of yourself, and everyone contributes to maintaining and improving it.
Through order, you can lift yourself out of the day-to-day because there’s a network of independently running people and processes in place. Your business can continue to run even if you (or another critical employee) leave.
Try these suggestions for creating more order in your business:
- Streamline operations with home service business management software
- Create a standard operating procedure
- Hire hardworking employees who care about the business
- Bring in a phone service to handle incoming client calls
Order keeps your business running smoothly at all times. When you feel like you can take a vacation without being anxious about leaving the business behind, it’s a good sign of order.
4. Impact: Doing something outstanding
If your company is always busy, financially comfortable, and running smoothly, but your clients are unhappy or don’t see the value in your services, you might have an impact problem.
Impact is the transformation you create outside of your business. This transformation comes from doing something outstanding and being recognized for it.
To become an impactful business, you need to create an experience so amazing that your clients’ lives improve as a result. At this point, you aren’t just making transactions—you’re also changing lives.
Use these ideas to create business impact:
- Offer consistently positive customer service
- Use surveys to ask your clients for feedback
- Send thank-you notes to clients
- Set up a client referral program
Weave this experience into your processes so you can consistently provide it for every job. You’ll know you’re creating impact when you have happy clients and five-star reviews rolling in.
5. Legacy: Achieving your full potential
Is your company busy, profitable, running smoothly, and keeping clients happy, but you aren’t standing out in your industry or seen as a vital part of your community? You may have a legacy problem.
Legacy is permanence. It’s the creation of something greater than yourself and the achievement of your business’s full potential.
When you create a legacy, you ensure that your business outlives you, because the business means more than just yourself and your involvement in it. It’s still meeting your needs and those of your workers and clients, but your business also serves the community in a bigger way.
Here are a few ideas for creating legacy:
At Jobber, one of the ways we create legacy is through Jobber Grants, a $150,000 grant program built to recognize excellence in small home services businesses. Home service professionals take pride in the work they do, and we want to recognize their accomplishments and accelerate their plans for the future. Try these ideas to help you do the same:
- Sponsor a kids’ community sports team
- Hire community members who are out of work
- Host a fundraiser or start a nonprofit
- Donate money or supplies to a worthy cause
- Provide free services to seniors, veterans, or essential workers
The goal is to share your success with the people who helped you get there. Tell the community what you’re doing to help, and they’ll get on board with your company and your mission.
That’s how you create a legacy—and make the world a better place.
Don’t think of this model as a ladder you can climb to reach success. Instead, think of it as a map. It shows you where your problems are coming from and where you should go to fix them.
Keep evaluating where you are and what challenges you’re facing on a regular basis. Then use this model to address them, starting at the bottom and working your way up.
We’re in a time of tremendous change, and this is your opportunity to stand out.