It’s been a couple of weeks since Leeds Business Week and my two presentations. And what a week it was.
On the days that I attended there was a real buzz. Business leaders meeting, collaborating, sharing and learning, the true essence of what this week was designed to deliver when it started four years ago. This was the fourth year I have presented and again, both workshops were standing room only. Clearly there is an appetite for high growth strategies in the local SME community.
How is your business working out?
With 570,000 new businesses registered last year, but 58% of Leeds-based businesses failing within five years (50% nationally), having your own business is no bed of roses.
When only 23% of SMEs have a formal written growth plan, are the failure statistics any real surprise? And if you set up your business to earn more, have more time and freedom to do the things you want or to focus on what you’re passionate about, has it really worked out that way?
Most business owners when they get to the two-year mark (if not earlier) are questioning their decision to start up, if they are doing the right thing, are they good enough or how do they find a route forward to greater success?
If you attended the cash and talent talk, you’ll have heard me talk about my first boss, Alan Duttine, who spotted an opportunity and went for it, ignoring all of the perceived wisdom of the time. He built a business with his best friend which they sold some years later for a considerable sum.
Unfortunately, he was diagnosed with Alzheimer’s a year or two into his retirement and died 10 years later. That’s just one example of why you should do all you can to create the right lifestyle now and not put your family time lower down the priority list. I’m sure you can think of your own.
What’s the link between cash and talent?
The one they do not teach you at business school is how small businesses really work – how cash and talent are the real blind-spots for an SME business.
Are you truly running your business, or is it running you? Are you working evenings, weekends and when you should be on holiday? If so, you’re not alone. 20% of SME owners work more than 70 hours a week and 50% work weekends.
To create the freedom you craved when you started it – whether that’s to work only on the things that ignite your passion or to spend time with friends and family – you need the right team around you. I see so many examples of business owners rushing recruitment and hiring the wrong talent. When they eventually acknowledge their mistake, they don’t deal with it promptly. With the cost of a bad hire estimated to be in excess of 20 times their salary, there’s plenty of pressure to get it right.
Being able to afford the right team (presuming you can find them) means planning well ahead. I recommend planning your hires 12 months ahead and understanding and managing your cashflow to create the headroom you’ll need to fund it. Remember, running out of cash is not the problem, it’s the symptom of the problem.
Are you working with dream clients and charging what you’re worth?
This is a red hot topic as most start-up businesses finish up working with difficult clients, on products and services that are not core and at prices and on terms that they do not like. Wouldn’t business nirvana be only working with your perfect clients, earning what you’re worth and having the time to spend with friends and family?
In order to achieve that you need to have nailed your proposition and be crystal clear on your target market so all of your efforts are directed at them. If you have to ‘sell’ your offering, rather than your prospect ‘buying’ then you are not in the driving seat. You don’t need to try to sell to the whole jungle, one hungry gorilla is all you need if you sell bananas.
Many fledgling businesses offer discounts to secure business. I demonstrated the impact of a 10% price reduction versus a 10% price increase – that’s the difference between needing to double the customers you have or making the same profit with a third less clients. Now that small discount doesn’t feel like such a good idea does it?
I also shared the 10 killer sales strategies which can be adopted to make a major difference to your bottom line and the number of hours you work.
So what’s stopping you?
We all know it sounds simple, but building a successful business takes dedication, skill, knowledge and no small amount of hard work. And even if you put all of these things in, the statistics tell us you still might fail.
To weight the odds in your favour you need a plan – the right plan to build the business you really want, which feeds your passion and delivers the returns you crave. A business plan in a folder on a shelf won’t cut it. Your plan has to be agile, dynamic and allow you to respond quickly, as well as enabling you and your team to understand and influence the indicators of growth for your business.
Securing the right advice may feel like a cost in the early days, but when you see that 70% of businesses with a mentor survive past the magic five-year mark, shouldn’t that feel more like an investment with a very significant return. After all, how can you know what you don’t know?
If you would like to manage your business on a single page, access our tool here to get started: tendo-uk.com/plan