It goes without saying that there will be a lot going on when you’re running your own business. So, you’ll need to identify and focus on the ‘critical few’ that are going to make a difference to your business success. Amongst the fundamentals will be marketing, sales and cash flow. It’s also important to nurture key relationships including looking after yourself. Time management is of the essence so don’t procrastinate and put things off. Delegate where you can and recognise when you need to talk to experts because you’re moving beyond your own capabilities.
2. A Clear Business Model
Your business model is the way in which you create, deliver and get value for what you do. This means looking at your business in a very objective way. Park your passion and excitement to really understand what core value you offer. It could be:
* the actual product or service;
* your ability to build collaborations and partnerships;
* the reach of your network;
* your Intellectual Property (IP).
Whatever it is, this is the part of your business which you must monetise effectively.
Remember that the value may be monetary but it could come in other ways like altruism and personal satisfaction too. Many people who run their own businesses give generously of their time and experience.
3. Finding ideal customers
There is a tendency particularly when starting a business to believe that any customer will do. This is true up to a point because customers who buy are the acid test of your proposition. But don’t fall in to the trap of believing that all customers are good customers. Take time to identify the characteristics of good customers for your business (What do they buy? How often do they buy? Do they pay on time? What do they say to others about you?) and then make sure your marketing and sales activities are targeted at them.
4. Profit before turnover
This is, of course, closely related to the point above. Chasing more business to generate a higher turnover doesn’t in itself automatically generate more profit. There’s a saying ‘Turnover is vanity, profit is sanity’. Be very sure by understanding your costs and margins that every additional £1 of turnover delivers the appropriate benefit to the bottom line. Know your numbers and don’t lose control of your pricing – it’s the road to ruin!
5. Saying ‘No’
Can you see a pattern emerging here? In the same way that your body is a temple so is your business. Don’t be afraid not to take on or to let go of customers who don’t meet your ideal customer criteria. For many businesses the 80/20 rule (or Pareto’s Law as it’s called) applies. Over time you will find 20% of your customers deliver 80% of your profit – in some businesses it’s even more marked, say 5% of customers/95% profit. Understand who these key customers are – pamper them and don’t let the long tail of the 80% wag your business for you. Watch out too for terrorising suppliers who want your business- just be totally but politely frank with them.
6. Being curious
Ok, so to counterbalance all the control stuff, take time to stay alert to what is actually happening in your business. If you’re meeting your goals then that’s great. However, be just as curious when you do better than you expected as you are when doing not so well. What is happening that you didn’t expect? What can you do to make more of this if it’s good news?
It’s helpful to stay in touch with what your competitors are doing – you may get some actionable hints. Who are the movers and shakers in your business – global, national and local? Pick a few and track what they are saying.
7. Failing quickly
Think of your business as a series of short term experiments. You’ll get some things right you’ll get some things wrong. If the balance is positive then you’ll be moving in the right direction. Don’t dwell on stuff that hasn’t worked but don’t lose sight of it completely. Just because something didn’t work once doesn’t mean it won’t work again – getting the timing right is everything.
Worst case is that actually your fundamental proposition is wrong and you need to start again completely. Don’t worry; if you’ve failed quickly you will have time and hopefully resources to move on. Remember too that you’ll be joining the ‘Serial Entrepreneurs Club’ – many business investors like to see you’ve got this T shirt!
And finally, if you’re so inclined score yourself on a scale of 1(low) to 10 (high) against these Accelerants.