Get a grip on your business!
Get a grip on your business!
Not wanting to over-simplify the whole ‘running a business thing’, but I’ve developed a list (based on my own experiences, and that of my clients and other business owners), which covers some of the things we need to know for different stages of building a business:
- Start a business because you want to, don’t just fall into it
- Do your homework – know what you’re getting yourself into, and who else is doing it too
- Do what you love – have a passion
- Recognise that it’s going to be tough and be prepared
- Budget for a completely different level of income than you had in the corporate world (!) (that’s a lower income, not a higher one…)
- Talk to people who remember setting up their own business, and learn from their advice.
- Use suppliers who can meet your budget. Don’t be ‘sold’ into paying more than you want to – there will be time enough for that when your business is making plenty of money.
- Know where you want to go, and don’t lose sight of that
- Make sure you have plenty of capital to get you through this phase – you’ll need all of it. Keep expenses to a minimum – it will take time to start generating an income.
- Depending on your financial position, join relevant networks and associations, and attend events. Make sure they’re the same groups where you will find your target market.
- Draw up a database of all your contacts and spend time getting out there and talking to people. Tell them what you’re doing, and listen to what they need.
- Try to do business with people you want to do business with. This is likely to be a more effective strategy in generating referrals and building your business.
- Don’t neglect the marketing fundamentals: understand what it is you can offer potential clients, understand what they need, develop a very clear value proposition, and know who your competitors are and what makes you different. If you haven’t sorted this out, you aren’t ready.
Up and running:
- Keep the momentum going – keep selling, keep acquiring new business, watch the cash
- Use good financial measurement systems to understand the key drives and key performance indicators of your business. Think of it as a control panel.
- Relationships are critical – pay attention to them (staff, clients, associates, etc.)
- Don’t employ staff until you need them, and provide clear guidelines to those you have.
- Gradually build your team to fill the gaps as your business complexity grows
- Make sure you understand your financial and business reports, and generate them on a regular basis.
- Keep your costs down, even when you don’t need to worry. It’s a good discipline for when you need to pare back, and will keep you in much better financial shape.
- Don’t take you eye off the numbers! Know how your cashflow is tracking.
- Secure yourself some reliable and competent advisors – accountants, financial advisors, a lawyer, a business mentor
- Start to acquire expertise in areas where you’re not naturally strong (finance, marketing, sales, etc)
- Have goals, know how you’re going to get there, and just do it! Planning without action won’t get you anywhere and you’ll never move forward.
- Sell before you buy – don’t extend yourself before you have the required level of business coming in
- Keep focused on your priorities. Don’t sweat the small stuff but don’t ignore the big stuff. Focus on what will generate revenue (and be profitable).
- Customer retention is important in maintaining stability. If you focus on this now, it will provide a strong foundation for the future.
- Stay fit and healthy – it takes a lot of energy to maintain and build a business.
- Get support – business and emotional support is essential. We all need help in some way.
- Understand the different business models which you could be using, and which are more effective. Don’t be scared to re-engineer what and how you deliver to your customers if a new model is more profitable. This is really very important.
- Build you reputation and your image. Be consistent in the process!
Established & Growing
- Implement systems where you can – it helps make the business run more efficiently and makes it less reliant on you
- Focus on the big picture and know what it looks like.
- Have a vision and a strategy to realise it.
- Keep watching the cash.
- Innovate to stay ahead of your competitors
- A good client list and a cash cow product will be the key to you ‘having a life’
- Look seriously at growth strategies and why you want to grow – acquisition, organic or both
Wisdom of experience:
- Finance & funding are critical – know what you need, be prepared, understand your options – always.
- Sales and marketing are critical to success – never stop these activities.
- People management and leadership – start the way you wish to continue
- Systems and process add value to your business – you may want to sell it one day
- Revenue from cash cows frees you up from your business. It’s all tied in with the business model.
- Strategy and execution are a never-ending cycle.