The fundamentals of starting a business

Patrick Frank, co-founder of PatientPartner.

There’s one thing I’ve come to believe in over the many years of building and scaling businesses: everything is essentially the same and it all works the same way.

As ridiculous as this sounds, I assure you that this comment was not made without good reason. I’ve lived it, seen it, been part of it and consulted about it with companies in different industries. Yet the same structure is reflected in the way these companies build and scale their product or service, regardless of their niche.

We hear all the time that it’s a bad thing to overcomplicate a business. This is a fundamental truth. In the end, building a successful business comes down to the same thing, and of course that’s the foundation.

The problem with these foundations is that they don’t care if you’re building a tech company, a healthcare company, a toy company, an MLM team, or even a personal brand as an influencer. Let me explain.

1. Developing the idea and the leader

Every great business idea starts as an ember in the mind of someone with a vision. Contrary to popular belief, no experience is needed to follow the idea; I have found it to be passion, dedication and leadership. Every successful business has this one at the helm. Without an idea you don’t have a business; without a capable leader, you lack direction and the determination to make it successful.

The ability to lead is perhaps just as important as the idea itself. You need to be able to attract others from the outside as well as the inside when it comes to building and nurturing your team of people who will build the business with you.

2. Building the foundation

As your business begins to grow, get others involved to help it grow, as there are limits to what one single person can do. I can’t stress enough how choosing the right team can make or break your business. If you’ve done the first step mentioned above, this part is less about finding it and more about choosing it.

This doesn’t change anything though, whether you’re a real estate agent building a team, a CEO of a technology company, or an e-commerce product founder looking for a designer – it remains the same. In the early days of your business, you’re looking for people who you can imagine will be there as the company grows, who embrace the whole process, and who have a passion for building your idea as close to your vision as possible.

3. Build a reputation

As a smaller business, you quickly learn that positive word of mouth is one of the most valuable things you can have. In various industries, the multi-level marketing world has developed a methodology that other companies have modeled as their own, but instead of using regular individuals, it is done through influencers or ambassadors.

This step is to build awareness and reputation. It takes others to expand your business through their trusted networks. In real estate, you take advantage of customers and their neighbors after a successful sale or purchase; in technology, you leverage your customers through referral programs after your product works well; in product development you use influencers for their network after they like your product.

This is the word of mouth all businesses should use to get as much organic growth as possible without pouring money into ad funnels which I believe are rarely successful in scaling a business. As Richard Branson would once say, “Your brand name is only as good as your reputation.”

4. Start to scale

Moore’s law is a prediction by Gordon Moore, co-founder of Intel, that the number of transistors that can be placed on a computer chip will double approximately every two years. Simply put, this means that computing power will become faster and more efficient over time.

Whether it’s technology or people, you should have invested enough in your business to get far enough to establish your idea, build your leadership, build your team, and get your reputation ready. These are the components that make up the flywheel of scaling. When all the pieces are put together, the “nodes” in your machine – or customers/clients in this case – start multiplying faster because they are in sync, and your business becomes more efficient over time.

As you get better at building a bigger team, your team will get better at delivering your product or service. This increases your reputation, allowing more people to repeat the customer journey. While this sounds like sunshine and rainbows, keep in mind that one break in the machine can cause it all to fall apart.

5. Start and end with the basics

If you don’t have the foundations set in stone, and you don’t look at other examples of how other companies succeed, there’s no money to help you. A great product will only get you so far, and while technology can help, it can also work against you. While it can improve your ability to build, it also makes it easier for others to be aware of any errors related to your product or service.

When you look at other companies, look beyond what’s being sold and what industry they’re in, and look instead at the fundamental structure of how their machines and culture work. What can be related to your company that theirs is doing extremely well? Then ask yourself how you can integrate it.

Learn from other industries and apply the best parts to keep your business machine running and growing as efficiently as possible.

The key to creating a successful business is to focus on fundamental elements such as effective leadership, building a strong reputation and learning from successful industry examples. This path to success applies to all industries and business types.

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