Part of the “secret” to running a successful small business is to understand what business you are in.

I love owning my own small business and I’m always interested in seeing others do well too.  There are so many great small business ideas…it’s staggering.

My experience tells me there are two kinds of business owners and businesses:

Flikr, Ben Heine

There are those based on personalities and those based on a processes.

A professional business is run based on your personal skills and personality. In this type of enterprise, people do business with you because of you. A really important ingredient for success for this kind of business is obviously having a great deal of professional skill and knowledge and being great with people. While you might already know that, what you might not really understand is that this is still a business. Many professionals have tremendous skill and love working with people – but their business fails anyway.

Why? Because they fail to run their business like a business. They don’t do the books like they should. They don’t understand cash flow and they don’t have procedures.  They don’t have enough working capital.  It’s all personality and no process.  This business will fail because it doesn’t put the client first.  It’s more of an ego centered enterprise.

When you put your client first, you try to create an experience that goes beyond their expectations and an experience you can replicate.  You can only do this if you have systems in place.

On the other hand, you have businesses that people frequent because of the product. Customers aren’t drawn to your business because of you per se. They want the product you offer. You might own a small bottle cap factory or have a car detailing company. It doesn’t matter, people want the product you offer.

Most people are drawn to open a product-based business because they want “process” and they may not like dealing with people that much. The mistake that people make in this sector is they forget about the importance of personality.

Let me tell you something.  You might have the greatest product in the world, but if you’re a jerk, people will find a way NOT to do business with you sooner or later.  On top of that, just see how long your business runs if you treat your staff poorly.

The bottom line is that no matter what business you are in, you need to pay attention to your people and process skills.   I “know” this, but I forget it sometimes.  I constantly have to re-think the processes at work and make sure my clients are being served as best I can.  This is something that never ends.

What’s been your experience?  Do you think a person can succeed by ignoring either of these ingredients for success?

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