Blog | Entrepreneurship

What Makes a Business Successful

The importance of a diverse team to build a big business

In my teachings on the CASHFLOW Quadrant, I make the case for building a business on the right side of the quadrant – for being in the B-quadrant. Inevitably, some people come up to me who work for themselves and convince me that they are doing what I talked about.

I have to explain to them that they are not in the B-quadrant, but instead in the S-quadrant. They are self-employed, not business owners. They own a job, not a company or system.

A team makes all the difference

The natural question is, “What is the difference between a B-quadrant business and an S-quadrant business?”

My reply is, “The team.”

Most S-quadrant businesses are either structured as sole proprietorships or partnerships. They could be teams, but not in the way B-quadrant businesses are teams.

B-quadrant businesses bring different types of people with different skills together to build something greater than each individual. S-quadrant businesses bring the same types of people together, but they don’t build something greater than the individuals; they simply offer more of the same.

The tetrahedron business model

One of my greatest teachers was R. Buckminster Fuller. One of Fuller’s passions was to find what he called “the building blocks of the universe.” In his search, he found out that squares and cubes do not exist in nature. His belief was that nature was built with tetrahedrons.

When I look at the great pyramids of Egypt, I understand a little more of what Fuller was talking about. Tall skyscrapers come and go, but the pyramids have withstood the test of time through many centuries.

The prefix “tetra” means four. In other words, a tetrahedron has four points. After studying with Fuller, I began to see the importance of having structures with a minimum of four points.

The following are graphic depictions of different business structures:

The most stable of these businesses is a B-quadrant business. In detail, it would look like this:

How it works

A well-managed business will have excellent employees. They are an extension of the business owner and represent the business to the customer.

It will also have a good team of specialists, such as lawyers, accountants, and more. While specialists may not participate daily in the business, their guidance is invaluable in keeping your business moving in the right direction.

Investors fund the business and allow it to become financially viable, while the business owners set the vision and direction for the business, leading the teams forward.

The structure has a better chance of being stable and enduring if all four of these points are working in concert.

What does this mean for you?

If you’ve been trying to build a business, but have found it difficult, it may be time to sit down and do a sober assessment. What kind of team have you built? What model is your business built on? How many points does it have?

If you find that you’re lacking at least four points, it may be time to make some changes. This is not to say you can’t be successful following other models, but it’s that much harder because they are that less stable. And businesses that don’t follow the tetrahedron model rarely grow to be large.

It’s all about knowing what you want and making the right changes to get there.