These 10 insights come from a long career in advising small business CEOs and running companies as CEO myself.
They are not platitudes merely crafted for this article. This list is real advice that you need to follow in order to grow a successful business and to help you through the storms which you will invariably experience:
- Revenue and scale are important, but margin is where the money is.
- Don’t take your eye off expenses, because when you do that they will start to creep up (and erode your margin).
- Bring on board the very best people you can afford at any stage of business growth – they will help grow your business and make it better and stronger.
- Set up processes for how you do things and document it. In sport, every member of a team knows the rules of the game and the end goal. Business is no different. Make sure every ‘player’ knows their role in the overall process and how that fits in with everyone else.
- Shore up additional lines of working capital when you don’t need it, because when you run into cashflow problems you won’t be able to get any additional capital.
- Pay attention to the clients you go after and acquire. Make sure they bring the same quality and value to your business as your best employees. The right clients will enable you to grow, as you help them in exchange.
- Collaboration – with your team, your clients and suppliers – is often neglected and underrated. A business that truly values collaboration will reap rewards.
- Have a strategy. Know what you want and equally what you don’t want for your business. Saying ‘no’ and having a laser focus is harder than saying ‘yes’ and being open to everything. Focus and clarity will always get you to your goal far more efficiently.
- Don’t do what everyone else in your industry does. Do what works for you and your business and do it really well.
- Know your numbers – sales, margin, profit, direct expenses/COGS, indirect expenses/overheads, ratios, comparisons between periods, product contributions, client value. If you don’t know your numbers then you don’t really know your business or business model.