This week marked a milestone for me as I celebrated three full years in business as a Business Doctor.
It is achievement for any business to reach this point. The Small Business Association (SBA) states that 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10 years. Having survived the tricky start up years it is time to reflect on lessons learned and also to look ahead to the next stage of business growth. If you are just starting up or looking to launch a new product or service then you can get ahead with these tips to ensure your business thrives.
Navigating a route to success
There are so many challenges encountered by start-up businesses and those existing businesses that diversify into new markets. Here are some ideas to help you successfully avoid some of the common pitfalls.
Set SMART objectives monthly, quarterly, yearly. Stretch these and aim for the moon. One tip is to work to a 90 day plan. When faced with a lot of tasks on the to-do list, ask yourself: What could I do today, or tomorrow that will make a positive impact to my business this month? Then “just do it”.
Outsource or delegate – you cannot do everything yourself – no one can be a master of all things.
Have a plan and review actuals versus budgets and do something different to rectify any variances. Why not ask yourself every Friday afternoon: What went well this week? What didn’t go so well? What am I going to do differently next week? Then plan those tasks in the diary.
Surround yourself with like-minded associates and a support network as running a business can be a very lonely place.
Fail fast and bounce back from the falls and disappointments quickly – James Dyson once said, “if you haven’t failed you are not trying hard enough”.
Find out how to effectively get your product or service to market, if a challenge, outsource to a marketing or sales specialist particularly if not your forte.
Get out there – be sociable, network, go to seminars, events, Expo’s. Interact, learn and get yourself known in your marketplace.
Your best sales people are your customers – make sure they become advocates. Ask for testimonials and case studies to build social proofing. Keep in close contact with these customers as they will have many contacts they could introduce/refer you too.
Keep a close eye on your finances and future working capital requirements. Rapid growth can cause just as many company failures as having no growth. Ensure you use accountancy software such as Xero, QuickBooks, Sage One etc. Create and have current robust business KPIs at your fingertips; this helps when you go for funding, or to the bank to finance growth. Having the information you need to hand, shows you know how to run a business.
Beyond those first years; Next steps to growing your business successfully
You have survived the tricky first years in business. Take some time to look at what you need to do next to help the business grow and create a Business Growth Strategy. In the first few years you may have said “Yes” to every opportunity, now it is about chasing margin not turnover and being confident in saying “No”.
Continue to measure and review performance; sales revenue by customer, by sector, margins and associated costs.
Focus on high margin generating revenue and do more of those pieces of work which make higher profits and have the least hassle factor.
Target marketing activities to the sectors, types of clients/customers where there is high margin – low hassle business opportunities. Your marketing budget should be approx. 10-12% of turnover and spend wisely on promotion and activities.
Build relationships with strategic partners – businesses who are selling something different to you but to the same target market– you could well complement each other.
Continue to outsource non-core activities such as marketing, social media, website development, accountancy/book keeping, HR, etc. Then you can spend your time strategically and operationally on high revenue generating tasks. It might seem expensive to pay someone, £25-£50 per hour or £400 per day to do something you could do yourself, but free up more of your non-productive time and you’ll be surprised what new business you can generate. Work smarter not harder.
Build the team – recruit for potential, as industry/sector skills and knowledge can be trained; develop someone with the right fit for your business and invest in those individuals who match your values and can help you obtain and service high value clients. For example, if sales aren’t your strong point, recruit a business development executive who can get to know your business inside out and your customers and be ready for those new growth opportunities.
Systemise your business processes – invest in IT software to secure processes and take human interaction out of as many of the tasks as possible – this helps with consistency, customers will get a common service level, it’s robust and allows you to step out of the business. Consider ERP – Stock ordering/management systems; CRM – Customer Management and accounts systems, there’s many on the market and some are even sector specific.
Finally, but most importantly
Ensure you take time away from work: by “Getting the business working for you”. Working long hours, seven days a week will not make you more productive, effective and successful. If this is the case, this is not running a business, it is a chore and a millstone around your neck and you’re just a slave to the tasks and needs of the business. Don’t become just an employee of your own business!
So plan your down time in the diary now at the start of the New Year – plan your family holidays and put these in the diary first. Work round these dates and don’t cancel, because if you don’t take your holidays you’ll compromise the most important relationships in your life.
I wish you all a successful and prosperous 2018 and I look forward to sharing my experiences of the last three years in business with you over the next few weeks.