Seven tips to take you from worker to businessperson
When businesses come into existence there are two types, those which have sound financial backing and those which are being established on a shoestring. Regardless of the financial situation the focus is to get the product, or service, developed to closely match the customer requirements as quickly as possible, and then grow the customer base. Here are my top tips for turning the “work” into a “business” and for setting the business up, to grow out of the survival stage.
What makes your business different?
Against the backdrop that around 30% of business fail in the first two years and 50% in the first 5 years, it shows that many businesses fail, as the idea is not sound, or the owner simply runs out of cash as the revenues are not secured. Why should anyone buy what you provide and if so, what gives you the “edge” on what others provide? For a new business, being very clear about what you provide is essential. If you are entering an existing market, you should aim to provide something special within it, which nobody else is doing, and if you are creating a new market, you need to ask yourself, if the market really exists.
Tip 1. Define your offer precisely and know who will buy the offer.
It is all well and good knowing who will buy but unless they are aware of you they will not become clients, so the lines of channels of communication need to be opened. There are so many channels these days, working out the best channel can take a bit of time and the optimum channel might be changing as you do.
Tip 2. Optimise the channels to market.
After the initial excitement of establishing the business the moment of truth arrives when you must deliver. Even with meticulous planning, there will be unexpected setbacks and turns. It is well worth getting a mentor, or some support to act as a sounding board. Just an hour or two per month will help keep you on track and keep you focused.
Tip 3. Get external help, even if it is only a few hours per month.
If at first, you don’t succeed
In the lean start up method, adaption and change in response to an action is the name of the game. Unless you act then you will never really know what the response is. If you are a procrastinator or detailed planner, you still must test the responses. Don’t be afraid to fail. Learn from the errors, learn and move on. The characteristic of taking a risk is fine at this stage of a business’s development (there is virtually nothing to lose). Taking risks at this stage underpins your knowledge later when the business is trying to grow more.
Tip 4. Learn from the mistakes you make, but don’t be afraid to make mistakes or changes to the plan.
If you don’t know what you are aiming at, you will not have something to aim for. Set some simple goals. The goals should beat the requirements of your survival budget. Those who have started businesses often say they earnt half what they expected in twice the amount of time they thought it would take.
Tip 5. Set some goals and have a contingency plan.
Review where you are
If you have survived the first one to two years, you will have done so by responding to what works, and what does not work in the market. The refined offer will be very compelling. Providing the pricing is right, the revenue will exceed costs and the light will be seen at the end of the tunnel. Given that 30% of business either fail or the owner gives up after two years, this is a significant turning point. It is worth taking stock at this time:
1) Who are your most valuable customers?
2) What are the easiest routes to market?
3) How are you spending your time?
Tip 6. Review monthly, quarterly and at the end of the financial year or on the anniversary of when you started.
The most common course for businesses is for the owner to become the face of the business. They will direct activities and solve issues as they arise. They have the technical knowledge and can answer questions with authority and confidence. Customers will turn as they know the owner will sort issues out. In addition, the owner will be doing the marketing, pricing and collection of cash when they are not delivering.
Breaking out of this loop and taking on some help is a major hurdle, and lots of business owners, without previous business experience, will get help with no consideration for the real cost to the business or how to delegate work.
Tip 7. Know your figures, Sales, gross profit, overheads and net profit using market rate salaries, and learn how to organise and delegate cost effectively.
If you would like support with applying tips to your business, or if you feel you are in the owners’ trap spending too much time working “in” your business and need to do some work “on” your business, then please ask for a no-obligation meeting to discuss what bespoke assistance I can provide.
More about the author https://www.linkedin.com/in/peter-searle-a75a993/