Does being a business owner ever feel like you are crossing unchartered territory without any certainty you’ll
reach your goal the other side? It can be unnerving, concerning and sometimes downright terrifying running your own business. We’ve spent a long time, and worked with a lot of small businesses, to map that journey for you. Every business owners takes their own path, but the steps are the same.
Identify where you are at with your journey, and what support, guidance and actions you need to be taking to take the next step. There are a few top tips in the accompanying presentation too.
The start up maze
Getting started in your business can be a confusing time. Everything from the type of legal entity your company defines itself as through to the service / product offerings, launch marketing and setting appropriate pricing…and a whole lot more! There is an enormous amount to do and often a fair degree of estimation over proper understanding of how things will work for the first 12 months. Navigating this maze is more than just understanding how to deliver the services. It’s a lot for a new business owner to take on but is essential.
Tip: Having a plan is vital as it helps you correctly prioritise, timeline, and resource the various tasks required. It’s also essential to have some clear goals and accountability to stay on track.
The cashflow desert
Almost every new business (and many that are well established) will at one time or another experience a point where operating cash becomes tight. This can be caused by a number of factors including costs exceeding revenue, but also the timing of when those two elements occur.
Understanding your debtor and creditor values, average days and totals is critical to staying afloat. The cash-gap that your business experiences can hamstring it’s growth potential for the future if not addressed.
Tip: Often sorting out strong and appropriate payment terms and conditions, a budget, and a debtor management process will help significantly.
The marketing minefield
Every business needs customers. Whilst many more established businesses can enjoy a large amount of retained, repeat or referred orders, most do need to attract some new clients or at least proactively manage their accounts to maximise lifetime value. This is where marketing comes in.
However, there are a plethora of suppliers and most business owners are not well trained in how to select a supplier, a strategy, or in how to measure meaningful KPIs. Avoiding expensive missteps requires a little learning to understand the different marketing objectives, and the support of an expert team.
Tip: Whilst it’s tempting to do some things for yourself, it can often cost you more in mistakes and missed opportunities than hiring a skilled supplier from the outset. As with dentistry, the best results are not achieved by amateurs!
The sales mountains
It is great to have enquiries, but it is better to have orders and cash in the bank; which we think most business owners would agree with. The gap between opportunity and reality for that comes in the form of solid sales processes, effective sales tools and skilled sales people. Designing your customer sales journey takes skill and an understanding of what helps and hinders each audience types buying decisions.
Mapping the steps out, and identifying each commitment objective and the relevant tool and terms to use can make a huge difference to conversion rates and average order values received as a result. Great sales systems and people can reduce the need for high volume lead flow from marketing, and make a world of difference to your business. Jeffrey Gitomer (author of The Sales Bible) says, “people buy for their reasons, not yours. So find out theirs first”.
Tip: Always build your sales process as it starts and ends with the customer’s situation and requirements.
The sea of staffing
If ever there was a part of being a business owner that caused the most headaches, staffing would top that list. There are endless examples of where a bad hire, poor management or lack of support led to poor customer experience, inefficiencies and emotional negativity.
Getting it right means clearly identifying each position, why it matters and what it is responsible for before even putting the job ads together. Having detailed and thorough recruitment marketing, shortlisting, skills testing and interviewing stages can all help weed out those who are a bad fit, and engage those who are just right.
Tip: Remember the old adage of “hire slow, fire fast”. Investing time, effort and expertise into recruitment, induction, training and performance management is important as mis-hires cost a fortune!
The lake of systemisation
Whenever you have tasks that are repetitive in a business it is worth creating a system to generate greater consistency.
Systems are the method by which business owners can devolve their own knowledge into a format whereby colleagues can replicate approach and outcomes. This is equally true for any team member who is skilled and great at what they do. Capturing their approach, and building checklists to support in the application of those processes can help move a business on from being reliant on linchpins to having a slick operation that is truly scaleable.
Tip: As one quick witted coach explained it, “you only need to bother documenting systems if you don’t want to be required forever. Systems are your route to independence!”
The Profit Treasure
When Indiana Jones wanted to take the golden idol in Raiders of the Lost Ark he had to carefully balance the mechanism to avoid setting off a nasty trap. A similar challenge exists for business owners who want to extract the value from their business but not suffer substantial penalties.
Understanding the best options for drawing profit out of a company, and how to do that legally and efficiently is important.
Whilst an accountant can help with the tax elements, there are 9 levers that drive the profit production on the front end. It’s worth learning about these, and our free guide below has been produced to help business owners grasp these concepts!
Tip: A great business coach can also help you apply those ideas strategically into your business and magnify the results you achieve.
The Exit Path
At some stage, every business owner either wants to retire or will need to do so, or move on to something else.
It is a powerful position to be in as a business owner, to know that your business is attracting buyers and can be easily handed over. This can be as a management buyout, family succession, straight sale or a merger or acquisition.
However and whenever it happens, it’s much more likely to take place if you set the potential as a goal. Building your business to be able to be sold is a great goal as even if you don’t intend to do so, what makes a business valuable is also what makes it easy to run and less stressful.
Tip: Start planning your exit well before you want to take it!
For a handy summary of the business owners journey and the tips for each step, you can download a copy of it here.