Olivia Stefanino helps a company work on their business, not just "in" it.

Standing by the flipchart at the front of the training room, I began to see that the mistakes I had made in the early days of running my own company were common to many organisations – and that those mistakes were probably the root cause of most business failures.

This week I was working with a company that had managed to stay afloat for five years and now employed eight people. Whether the organisation would have been able to boast the same achievement in five years’ time was debatable.

There were several issues that needed addressing – and fast, if the company were to flourish. While the foundations were in place – as evidenced by the strong team spirit – there were gaping holes in the structure that, if left unattended, would cause the whole edifice to collapse.

The primary problem – and one shared by many small companies started by enthusiasts rather than entrepreneurs – was that the company had no vision.

While all the staff were extremely hardworking and dedicated, they were not pulling in the same direction – purely because they had no idea in which direction they should be headed.

Everyone within the team disliked the idea of creating a company mission statement. The suggestion of a company vision statement didn’t meet with much enthusiasm either. However, when I suggested that they create a statement that identified their purpose as a company, their faces lit up. We had found a word – and concept - on which they could all agree.

As we began working on the wording of the purpose statement, it became horribly clear that the team had focussed all their energy on their products and services – and none on their own business. They had fallen into the common trap of spending all their time working “in” their business – without putting any energy into working “on” their business.

In order to create a business – rather than a hobby – the team needed to become more professional in its attitude. This was reflected within the purpose statement by including the point that the company would provide the best service to customers in order to generate profits and pay everyone a good salary!

Of course, chasing profits is not the purpose of a business. Finding and retaining clients by offering the best value service is a company’s raison d’etre – with profits being an effective measure of how well an organisation is achieving this aim.

In the case of my client, they had put their customers first – but had never included themselves anywhere within the equation. Because of the service-oriented nature of the people running the business, profit had become something of a dirty word. Worse, the business owner/manager had never paid himself a salary – reinforcing his belief that he was running a hobby.

Having agreed on the purpose statement, the next step was to increase sales. All company failures, at the end of the day, are due to a lack of sales. But the company I was working with had no sales process – which was reflected by the lack of profits.

Together we worked on creating an effective sales structure. The first step was to target existing customers – and create stronger relationships with each of them. By looking for “up-selling” opportunities within the existing customer base, my client would be able to make the biggest – and fastest – impact on the bottom line.

Clearly, there was more work to be done – but for now, with a sense of purpose and the clear objective of improving profits by increasing sales, my client was now firmly on the route to success.

* Olivia Stefanino is a leadership development consultant and executive coach, who works with blue chip organisations, SMEs and individuals. Download your free e-booklet “128 ways to harness your personal power” at beyourownguru.com.