Ever heard the phrases, “standing on principle” or, “following principles,” or “adhering to principles?” Have you considered that how you run your business is based on your idea of business principles? And have you considered that you are the architect of the principles upon which your business is built?
Most businesses of more than 10 employees have organizational charts, documents of policies and procedures and other ways of determining what their principles are upon which they run their enterprises. The tiny business owner, the solo-preneur, rarely gives this much thought. Some tiny businesses get born by a good idea and launched into activity without even a written business plan. However, I’ve said it before – if you haven’t set a destination and know how you’ll get there, you’ll only run in circles. Principles are important.
At its most basic, what is a business principle? A principle? Principles are those things and elements that represent what is desirable and positive for a business to do and they provide forward momentum. Although principles hold within themselves policy, goals and objectives, they are actually more elemental and are meant to be the baseline governing factor in all manner of doing and operating your business.
Principles have within them the elements of norms, rules and values and these elements all have to be defined and determined individually for each business.
Norms are the “what is normal” guidelines for operations. Kind of the “the way we’ve always done things;” the comfortable and the known. Norms are the guidelines or practices you set down. For example, you send out invoices on the 15th of every month – this is a norm for the accounts receivable function of your business. You review your business plan on a quarterly basis…this is a normal function for your leadership role.
Rules are the authorities of operating your business. These are the formal guidelines of what to do and what not to do in given situations. You’ve set as a rule…and principle…of your business that you will return prospective customer calls within a 24-hour period of time. Or, you’ve set up your business so that your family time has a priority level – meaning that you don’t take work home on the weekend…this is a governing rule and principle. You may have set a policy for your small business that customer care issues take priority. To make this policy work, you set up authoritative statements – rules – that let you know when and how to set aside other priorities to deal with urgent to semi-urgent customer care needs.
Values are the esoteric elements of your business. These are the elements that are only known to a select few: if a solo-preneur, you and your closest business advisors for instance. Even a solo-preneurship business has a culture and the values you ascribe to it will define the ideals and beliefs you hold about your business. These values will tell you what is good and what is not.
You may hold person-to-person, relationship sales as a principle of your business and this may because you hold personal relationships of high value. You may pay your business’ bills on time and in full every month because you hold financial integrity in high value and this governs how you handle money in your business.
Making sure you have a written business plan – as important for the solo-preneur business as the global conglomerate – will help you set down the principles upon which you operate your business. Principles that:
- are the basic generalizations about your business that are true for you
- rules and standards of operation
- truths and authorities
- explanations of the how’s and why’s of your business