More than half of new UK businesses fail in the first five years, so how can your company be among the minority that thrive?
By ditching the bad old business advice that has been handed out for decades!
Outdated advice distributed by business ‘gurus’ need to be debunked, even if the new rules ruffle a few feathers.
Don’t fall in love with your product.
Everywhere you look, aspiring entrepreneurs are being told to “do what you love and success will follow”. I bet countless family homes have been lost because a budding entrepreneur gave up their day job to ‘follow their dream’ with a product even their own family wouldn’t buy. So make sure you test your ideas before committing yourself and ask people if they would seriously take out their bankcard and buy your product.
To get big or get bought, get involved in a fast growing sector.
Research the markets and sectors that are growing fast and hitch a ride. Then, crucially, be passionate about creating the business culture that will allow creativity and ideas to flow. It really doesn’t matter what the business does; it’s about finding expanding sectors, not ones that are crowded with competitors.
Start off with a fat bank balance.
I would never start a high-growth business on a shoestring. If you want to grow fast then positive cash flow is incredibly important. The order book might be full with lots of money owed to you, but if there’s no cash in the bank you can’t fund your growth.
Your people are everything.
If you just choose interviewees based on ticked boxes on an application form, getting the right people will only ever be a lottery. We don’t care if someone has one GCSE or a PhD. You can teach people processes, but you can’t teach someone how to be genuinely enthusiastic. So recruit on behaviours, values and attitude, not just qualifications.
Don’t spend effort on changing the person. Change the job instead.
We know we’ll never get a person who fits a job criteria 100%. If they’re great at 80% of their job, don’t waste time worrying about the other 20%; look across the company and see who else can pick up those elements. If you play to people’s strengths, they will increase in confidence, take less managing and become really productive.
Make sure everyone knows what’s going on and where they fit.
Everyone, from the cleaner to the MD, needs to know how they add value to the company. They should also know the basic financial situation of the company and your plans and vision.
Everyone should be able to talk with indepth knowledge about what you do and why you do it.
The customer comes first.
Too many companies decide how they want to work and then push that onto their clients. But you have to put the customer’s needs front and centre, with customer-centric processes, customer-centric marketing and customer-centric service. Happy customers are the best marketing force ever.
Surround yourself with good advisers, then shut up and listen.
When you start out, get the best professional advisers you can afford, whether it’s a lawyer, accountant, marketing person or IT wizard. Don’t scrimp on expert advice – but once you’ve got them on board, listen and act on it.
So you’re a business guru? Byeeeee.
I get very uneasy around people who describe themselves as a business ‘guru’ or business ‘consultant’ but their past track record doesn’t really stand scrutiny. Instead of shelling out serious money to see these people (who are generally well past middle age, white and male and not well connected to the massive changes in the business world in the last five years), find a mentor. Ask someone you admire if they would mind giving you some time. Their listening skills and individual advice are gold dust.
Learn how to have difficult conversations.
Learn how to proactively manage out problems, rather than evade them and let them build up. Ask both clients and staff if there’s anything you could have done better. It’s a great way to leave the door open for good honest feedback both ways.
Be selfish with your time.
Starting a business absorbs a huge amount of time and energy. So to keep going you will need to say “no” quite often to avoid burn out. One tactic I’ve found works for me is not to say “no”, but to say “no, but” – as in “no, I can’t join your charity’s board but I can offer two hours’ mentoring every couple of months – would that help?”
Forget the buzz and focus on the sales.
Day-to-day operational marketing and longer-term strategic marketing should have only one clear, common goal and that should not be about creating buzz around your idea or product.
Some business owners get obsessed with social media follower numbers, but really that’s just vanity. Twitter, LinkedIn, magazine articles etc are just steps on the way to achieving the one and only outcome that really matters: sales. If something isn’t working, why are you wasting money on it?
Sue Nelson is the CEO of Breakthrough Funding. Her business helps innovative food tech, software and manufacturing companies claim back cash from HMRC as research and development tax credits. Just over a year after its April 2015 launch, the company hit the £1 million turnover mark and is now on course to achieve its next goal of £2.5 million by the end of 2017.