The Entrepreneurial Cube: Six Sides Of Small Business Success

 

Frank Felker’s theory of the Six Sides Of Small Business Success is based upon his own 40+ years experience as an entrepreneur as well as the thousands of entrepreneurs he has known, presented before and worked with since 1972.

These six facets are listed sequentially based upon Felker’s belief in their priority importance.

Much like Maslow’s hierarchy of needs, each element builds upon those below it and requires them to be in place before it can be successfully addressed.

 

The Entrepreneurial Cube: Six Sides Of Small Business Success

 

Side 1: Objective (Decide What You Want)
Determining first what you want from your life and your business lays the foundation for every step you take and every decision you make going forward.

 

Side 2: Marketing (Build A Customer Factory)
Without a logical, effective plan for generating revenue the business is nothing. Millions of entrepreneurs with deep industry and technical experience, plenty of capital and high intelligence have failed because they were incapable of marketing their product or service. Millions of others who lacked those gifts but knew how to sell have succeeded in spite of all other challenges.

 

Side 3: Finance (Manage The Money)
Once having proven that you can generate revenue from the marketplace you can raise debt or equity capital much more cheaply. Many companies have launched, grown and successfully operated without every borrowing a dime because of their ability to create cashflow through sales. Wherever the money comes from you must be prepared to manage it or you will quickly lose it.

 

Side 4: Production (Keep Your Promises)
The Technician in you, as described in Michael E. Gerber’s seminal book The E Myth, may believe that Production is not only the first order of a business but also its primary function. While the company must have a product or service to provide its target market, as the saying goes, nothing happens until somebody sells something. And without money to purchase supplies, pay rent, salaries or production partners nothing can be produced. While it is critical to have an effective and sustainable production plan in place, there is no need to manufacture a product before it has been sold.

 

Side 5: Management (Lead The People)
While Management is fifth on this list in order of priority, it is second only to Marketing in level of difficulty. Recruiting, selecting, training, evaluating, compensating and directing multiple human beings simultaneously is extremely challenging and should not be entered into lightly. No matter the effect on the national economy, small business owners should avoid hiring full-time W-2 employees and choose to outsource production (either domestically or globally) whenever possible. If hiring one or more people is either unavoidable or presents the best possible course of action, it should be done very carefully and deliberately.

 

Side 6: Administration (Handle The Details)
The Devil is in the details. This phrase is certainly true in small business ownership. Generating invoices, managing Accounts Receivable and Payable, handling payroll, paying taxes, ensuring that governmental licensing requirements are current, juggling insurance policies and a thousand other things are all the responsibility of the owner of a small business. But none of that matters much if you haven’t already covered the first fives sides.