The average age of high growth business owners starting businesses was recently reported to be 45. Your experience, skills and maturity give you an advantage and a business can provide a better financial and lifestyle solution.
Many successful businesses started because the owner identified a big problem for people that wasn’t being met elsewhere. This means the business owner knew that there was a demand for the product or service that people would pay for. Businesses need to be solving problems for paying customers at a profit.
While some entrepreneurs seek to turn their hobby into a paying business, and this does happen, it is wise to be very clear about what you want your business to do for you and the financial goals you have, such as replacing your corporate salary and creating a viable asset that you can sell when you retire.
Take time to do research
For any business idea to perform well in the market, it must be thoroughly investigated. Untested assumptions are great on paper but if the situation on the ground differs, it can alter the viability of the business. There will be trends, developments and best practices in each particular industry that are important to know about, as well as what your competition is doing. Why reinvent the wheel when you can learn a lot about operations and marketing from a competitor’s website?
Some enterprising new business owners find a similar successful business in another city and ask the business owner for advice about why their operation is working so well. It is usually because they have proven experience from testing different approaches until they have found the ones that work the best. People often love to talk about their business and if you are a non-competitor they may willing to share their practical tips.
What you are looking for is the “critical success factors”, which are things that must be done well, including pricing correctly and having satisfied customers, to ensure your business success. Some store owners have had very valuable advice on their store layout, inventory selection and marketing from successful businesses elsewhere.
If you are looking at a totally new industry for you, such as an online business, help yourself by choosing to learn from the best operators through their online courses. Become informed by reading reviews and don’t be shy about asking questions. Choose people who actually operate the type of business you want, rather than academics who know the theory but not the practical.
Study your SWOT
Few people even realize it, but the nature of a business must match the strengths and personality of the entrepreneur. You need to know what you are good at and what you prefer not to be involved with. One good way is to complete a basic SWOT analysis. SWOT means strengths, weaknesses, threats and opportunities.
Under “Strengths”, write down what skills, knowledge and experience you can contribute to this business, as well as your individual talents and activities you enjoy in the workplace.
Business people, especially small business people, need to wear a lot of “hats”. You are unlikely to know all you need to know about everything that is important to your business. Some areas, like production or customer service, you may have a natural talent for, but you will also need to know about accounting, including costing and financial management, legal, human resources, creating systems and processes, marketing (including social media marketing), and other areas.
Your business strategy must include how these other “hats” are going to be attended to. Business owners usually have access to the services of an accountant, commercial lawyer, HR and IT and marketing professionals, usually on an hourly rate or contract basis when needed.
Consult with family members
Given that the step that you are planning to take is going to affect your spouse in one way or another, it is important to get their support. They might not say an outright ‘yes’ but just keeping them in the know will reduce stress that often comes with engaging in a new and unpredictable project. If possible, set some time for a family meeting to brief them on the vision, present events and future plans for the business. They key is to have open communication on what is happening with the business because in a way, it breeds accountability on your part.
Come up with a business plan
Write a business plan for what you are about to do. A basic plan usually has an executive summary of the business and its objectives, a market analysis section that justifies its existence, financial costings and projections for effective budgeting and a promotion strategy for marketing the business. At this stage this information is untested, but you will uncover many questions and identify solutions in the process of writing it. Business plans are used to develop a critical line of thinking.[restrict]
It is important to also identify and include the “customer experience journey”. This is all the steps or intersection points from when a customer identifies a need for your product or service, becomes aware of your business, and buys your product or service. It also covers following through to any after-sales service. Ensure all of your steps are customer-friendly and do not upset, anger or frustrate your customers.
Documenting your “customer experience jouney” can reveal how your business is seen by your customer.
It can highlight any gaps in attracting customers, maintaining quality and service levels, and meeting customers’ expectations. It can also confirm whether you are providing the right type and quality of product or service.
If not done well, businesses can lose customers along the way. It is also likely to show you opportunities to upsell customers with extra products and services and earn repeat business.
You will need to have systems to measure your results e.g. number of customer enquiries, number of sales made, gross profit per product and product category, and your profitability after breaking-even i.e. once all your overheads and expenses have been paid. If you are unfamiliar with how to calculate costing, pricing and profitability, get an accountant involved early on. Ask for some simple tools in ratio analysis so that you make better decisions in purchasing, staffing and managing costs.
You also need to know the size of the market, why prospective customers would want to buy from you and how you will reach them so they are aware of your offering.
It is usually necessary to get your business plan and financial figures checked by an accountant even if you prepare them yourself. A business plan projects events over the course of the business and outlines action steps for preventing challenges before they arise. An accountant may see ways you can improve the structure of your business for greater efficiency and profitability. They will also be able to advise you on the best way to purchase assets for your business i.e. plant and equipment, and advise you of your tax obligations.
Have the right people in your corner
In this technologically-advanced society, it has become much easier for business to be done faster and cheaper. Many companies outsource functions of their businesses to overseas suppliers which can provide websites, writing of website content and marketing for a lot less than local employees. It is a good idea to investigate what services you need that can be out-sourced.
The use of social media as a major business growth tool just went on fire a few years ago. This aspect of your business is best left to an experienced individual as it is quite specialized. Unless you have access to quality training or are keen to do it yourself, it is most likely that you will need to outsource it.
Start with ensuring that your business can be found easily on business directories, Google Maps and a Facebook and LinkedIn Business Page.
From the network you have built over time, ask for connections and referrals for professionals you can work with for the services you require. If you can get leads to specialists who can be trusted with a startup, and who will be pleasant to work with, you just won this level.
Look out for yourself
Think of your business as a long-term commitment – businesses usually do best after 3 to 5 years and become more saleable 10 years and beyond. Business management requires energy, enthusiasm and mental alertness, which is only made possible with nutritious food and regular exercise. People who get sound sleep, drink plenty of water and eat well, have a head-start with a clear mind and a joyful spirit. Plan what you need to do to stay stress-free and to find the solutions to your ongoing business challenges. It could be a long walk in nature, playing patience, regular meditation or a fortnightly session with a business coach.
Don’t be a martyr and try and do everything yourself as this often leads to limited thinking and burnout. Aim to schedule time to work “on your business” instead of only “in the business”. This means stepping back, seeing your business at a distance and constantly identifying ways it can be improved in efficiency, customer service and profitability.
If you find yourself “bogged down” with too many tasks and not enough progress or profitability to show for your efforts, you may need to update your understanding of business management and create better systems and processes.
If you are planning or have started a small business, this book will teach you how to think like a business owner instead of an employee
Watch this Youtube video for the core message here:
Unfortunately, sometimes people start a business and there isn’t enough market demand for what they offer. You need to be certain of the demand and your capacity to meet it before you start. You can finetune it once you fully understand your customers’ expectation, but your business concept must be sound.
Wise and experienced business people choose business opportunities that have the lowest capital outlay possible while they test that their business model is viable and effective. There must be opportunities to “fail” at different marketing, operations and merchandising strategies while you are learning to “drive” your business. It usually takes time and experimentation to identify what customers really want, the best way of servicing them and how to generate the most profit for your efforts.
One common denominator of people who don’t succeed in business is that they never really expected to. It takes drive, energy, passion, optimism and a willingness to be flexible and change the way things are done, when needed. A business often reflects the character of the owner so diligence and ongoing upskilling and learning is part of the process.
Along with the right mindset, careful planning, expert advice and hard work, you also need to expect that you will find the right track on which to grow your business.
It helps if you are following a guide who has been there before and can act as a sounding board when making critical decisions. It also helps to look for incremental improvements in all areas on an ongoing basis. Your business is an evolving entity – give it the resources it needs to flourish, including the best staff you can get, and it will make a positive and lasting impact and contribution to your customers, your community and your life.[/restrict]