A business philosophy is relevant to every business. It is especially important for small businesses. It plays into everyday interactions between people – from employee to customer, employer to employee, and among employees. The key is to have a solid foundation built from your strategy, finance, and culture.
Business philosophy outlines the purpose of your existence and the goals you take on. Effectively, it’s the heart of your business. When strategy is well defined, the world is your oyster! A business philosophy helps both customers and employees understand your core values and beliefs. It becomes an integral part of your brand, your how you hire, and how you relate with customers, vendors, investors, bankers, everyone.
To ensure consistency, a business philosophy should be incorporated into every part of the business cycle. It guides your own decision-making and establishes long-term planning and effective communication and management. Customer-oriented philosophies tend to market better and studies have shown that 5 out of 6 customers will pay 25% for better services, which starts with a strong business philosophy!
How do businesses use strategy, finance, and culture to guide their philosophy? We will guide you through the process to help you begin to discover how to better define your own strategy, finance, and culture.
What is strategy?
A strategy is a road map with step-by-step actions to lead to success. It allows you to work smarter within your business as decisions are easier to make when they are guided by an overarching philosophy. Success comes from thoughtful strategic planning.
A well thought out, strong business strategy will help you:
- Adapt to market changes,
- Manage financial resources,
- Increase market return on investment (ROI),
- Understand capacity constraints and thoughtfully adjust as the business changes,
- Improve team collaboration,
- Evolve into the incredible and thriving business you were meant to be!
Each business will have a unique strategy. Start with the following:
- Assess: Take note of the general state of business in your industry. How do similar companies operate?
- Position: Set a specific direction for the business and align the various elements needed to succeed.
- Document: This may seem obvious, but it is an often-missed step. To stay focused on the business goals, define and document the road map. You must then focus on communicating the strategy in an exciting and impactful way. Define your milestones and how you will achieve them. Measure your achievement with well thought out key performance indicators (KPIs).
- Implementation: Keep the plan on target by talking to customers and employees, this will provide you with a pulse on how your strategy is being accepted. Hold brainstorming sessions regularly with employees to check in.
What is culture?
Having a healthy company culture is the basis for ultimate success. It provides employees with a sense of purpose and sets the tone for acceptable behaviors. It allows employees to build meaningful relationships within the business and supports their needs professionally and personally. It encompasses multiple aspects of personnel relations, inspiring opportunities for personal development and holding them accountable to expectations. Employees should feel comfortable with communication throughout the organization.
Leaders within an organization must set the tone for culture. A healthy company culture encourages personal growth, fosters trust, supports risk-taking, offers flexibility and gives praise and acknowledgement. A toxic culture will steer your business to a grinding halt.
Every company has a culture. A healthy culture can be achieved by:
- Establishing core values, communicating them to all stakeholders and using them as the basis for which you do everything from hiring employees, working with customers and even working with vendors.
- Lead by example and share your vision. Define your “Why”. Does everyone agree?
- Cultivate the right environment by hiring employees that exhibit company values.
What is finance?
We use the term finance to mean a variety of things. A healthy financial outlook is key to running a successful business. How you balance and report on the various inflows and outflows daily, monthly, and annually determines your profitability, your equity value, and ultimately how much you are paying in federal and state taxes.
We often encounter businesses who are understaffed in this area. Some even see it as a necessary evil but fail to allocate enough resources to hire the right solutions. A fractional CFO and Controller will provide a cost-effective way for businesses to get the talent they need to succeed at a fraction of what you would pay an employee. A strong Controller is rarely an effective CFO. A bookkeeper is not a Controller. Every business needs a strong accounting component to understand where they are and where they are going. Controllers report on historical information. They make sure your accounting records are accurately portrayed. CFOs are the forward thinkers. They spot trends, they establish and review KPIs and provide strategic guidance to help you achieve your goals.
CEFO Advisors has built its business philosophy on strategy, finance, and culture. We use this process to inspire clients to create a connection and foster cohesion in their businesses as well. These core tenants help to establish a solid framework from which businesses can grow. CEFO Advisors works with businesses at all stages of their development whether at startup or with a family-owned company who has been in business for over 100 years. We add the leadership, accounting expertise and advisory ability to assist you in reaching your goals!