Whether you’ve been in business a little while or you’ve just decided to go into business, there is no question that your reason for doing it yourself was the potent promise of autonomy, being able to pursue a passion for what you do and the ability to directly reap the sum of all your efforts.
All these benefits remain true – and they are also deeply tested as the day-to-day realities of running your own business quickly highlight just how many skills, resources and creative ideas are needed to keep your business ship shape.
We asked three business mentors from Business Mentors NZ what might possibly keep you awake at night and how we can turn those thoughts into useful insights into what can be done well.
‘For most businesses starting out,’ says business mentor Rob Leinwand, ‘there are some immediate areas of concern including questions such as –
- Do I have a product or service people want?
- How do I attract customers?
- What is the size of my market?
- Is there a market big enough to justify my business?
‘These are vital questions to be asking and it pays to do the homework to answer them. Accessing support from other business colleagues, mentors and advisors (like your bank advisor) as well as doing some of your own research; is worth the time and effort,’ he adds.
Business mentor Ken Noble, emphasises the importance of planning. ‘Business plans, financial and marketing plans form the basis of all your business thinking and help you to see what’s in place and how you’re going to work with it. So many businesses seek funding support from their bank, especially in the first year – and they need to be able to show the bank something the bank is going to feel confident about. Consider your bank as a ‘business partner’ and provide full disclosure through either monthly or quarterly reporting. Banks are all looking for opportunities to provide more services such as Foreign Exchange, Term Loans and Vehicle Finance.’
‘Asking ‘can we make this business happen financially?’ really makes you consider every dimension of the business and helps you feel a lot less like you’re stepping into the complete unknown,’ adds Chris Reid, a mentor who has been with Business Mentors NZ for three years.
‘And there are the practical realities,’ adds Rob, ‘like setting up a bank account, doing GST, recording transactions, accounting for inventory. Ask around and be well informed because there can also be a little bit of ‘you don’t know what don’t know.’
‘Going into business, you need to set your sights pretty clearly,’ says Ken Noble. ‘The detail can be daunting – but then again, if you’re not looking at these areas, they should be keeping you awake!’
For any business owner, going from being employed to self-employed is a big step. ‘Being your own boss requires far more commitment than you possibly even imagined and the trick is to get past a ‘fly by the seat of your pants’ approach,’ says Rob Leinwand.
Chris Reid explores planning and finance issues in more detail. ‘Once you’ve made sure there is a market, you need to make sure there is money to be made from that market. It can pay to look to your various advisors for a conservative as well as a more liberal point of view, to help you scope your options. Also, an accountant might be great for cash flow management but they may not be the best for looking at other areas of the business. Once you’ve done your homework and written your business, marketing and financial plans, use them. There is no value in leaving them sitting on a shelf. But keep them simple – and use them as a living work-in-progress.’
So how do you best deal with any concerns you might have?
‘It’s hard to suggest a ‘one size fits all’ solution,’ explains Rob. ‘Relationships are paramount and word of mouth and referrals have never lost top placing for being great ways to build strong business contacts and sales. Also, use your networks for support.’
‘Talk to an advisor!’ says Ken. ‘So many ideas and decisions come from sharing and confiding with trusted friends, colleagues or professional advisors. It’s important that any business owner feels that they can ask.’
‘Get into the discipline of business right from the start,’ enthuses Chris. ‘Get to know what it’s all about. And something I’ve noticed a few times, watch your pricing. Under-pricing to get into a market can come back to haunt you when you need to lift your prices and customers are not keen to see the increase!’ If a business has really struggled, Chris adds, there can be a time too, when it is best practice to know it’s time to walk away.
What are successful businesses doing well?
‘Writing sales orders,’ says Rob. ‘The first step is getting income in. Make sure your systems and procedures support this – and that you can measure the results. There’s a lot to just doing this – shipping, collecting, banking, dealing with quality, inventory and so on. An owner who regularly does a time-cost evaluation and who knows what the customers want, when, at the right price and quality, is building a good business.’
Ken makes an important point. ‘Most clients think it’s just marketing they need to get right but it’s a combination of not just marketing but everything else that needs to fall into place.’
Chris encourages a constant willingness to be open to suggestions and feedback. ‘A good business owner can take advice. They will also ask around and they surround themselves with good business minds and support.’
‘The idea is to get to the point where you work on your business, not in it. You may perceive that it’s a risk to employ others, but I’d encourage you to build a team and get assistance.’
All three business mentors agree that planning, determination and good execution make for good business. Yes, there will need to be long hours at times and working over the weekend, but the rewards are there too.