People come to me because they want to grow their business – they want a proper grown up business that will earn them some decent money. One of the main issues that comes up is that people are reluctant to take on their first employee, even if they can see that having someone else to share the workload and contribute to profits would be helpful.
Small businesses go through different stages in their lives – here are some of the lifecycles I come across with the companies I work with.
At this stage people want to know if their idea will work and if it will make any money. They also need to know how to go about setting up such a business.
Often, people will come to me with the germ of an idea, or a new opportunity which has presented itself, and I’ll tell them if I think the idea has potential and what they need to do next. These next steps might be:
Often, people start up a business, but they’re still waiting for those customers to come and buy. Sometimes you get an initial swell of customers from all the marketing you did when you first started, but between 6 and 9 months into the business, these can start to die off.
The main issue facing businesses at this point is how to boost your marketing. This can also be a low point financially – maybe you’ve had enough of living on baked beans while you start up, or, like many people, you’ve underestimated the amount of time it will take to get going. So you’re probably going to need some very cost effective marketing ideas – which is where I come in.
This is the stage where a company starts to think about growing. Quite often, this is someone who has been operating as a freelancer, or sole trader and they want to change into a bit of a bigger operation.
Key things to think about here are:
When a business has been going for a while ( and this can range between a year, and 20 years) you get the feeling that you want to grow it to something bigger and better. To make your company into something that can earn you some serious money, and perhaps to build it up to where you can sell it in a few years time.
This is a crucial stage, and one where people often feel that they need some help and support to step out of their comfort zone and really go for what they want.
At this stage, you’ll probably be feeling that you want to get everything done properly. You’ll want to make sure that everything is legal and above board and that you’re following best practice in everything that you do.
You will be thinking about a more sophisticated marketing campaign that will bring in substantial amounts of new business, and you’ll need to think very carefully about the financial aspects of expanding the business – cashflow planning becomes particularly important here.
Above all at this stage of your business, your role will change. You’ll probably spend less time actually doing whatever it is that your business does, so less time looking after customers or building websites, and you’ll need to spend more time on marketing and supervising others. Michael Gerber sums this up in his E-Myth series of books, as “working ON the business, not IN the business.” I often remind clients that they need to start acting like the Managing Director, not the sales assistant.
This is the company that wants to push a fast expansion and get big fast. It might be that you’re operating in a market where you have to be reasonably big to make a decent profit margin (eg, FMCG or import/export) or maybe you’ve just got big ideas about what you want to do.
The big issues here are:
You might have been running your own business for some time, but now realise that you want to do something completely different – lots of Joy of Business clients are serial entrepreneurs.
The trick here is being able to develop the new enterprise while keeping going with your existing business. You need to be able to focus on the important issues, and keeping your eyes on the right ball can be very challenging. Often I see that the new idea has fallen by the wayside when the client is faced with the need to keep the old business going because that’s the one that pays the bills.
If you’d like to talk over any of these issues, do get in touch and I’ll see if I can help.
Julia Chanteray