What advice would you give to a new business owner?

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Our company is in its tenth year of existence and when I open my old note book from those very early development days, which started way back in 2009, I find it hard to remember all the feelings around starting-up a business venture. Looking through the frayed pages it seems we were obsessed with a name and logo, with so many variations being drawn and discarded. I am very proud we chose ‘Know and Do’, it still says exactly what our business is about – ‘helping leaders learn to solve their problems by effectively applying the knowledge’ – but I’d probably not focus as much time on these things next time round.

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My trip down memory lane came from a recent discussion I was invited to join with Tech Manchester as part of the UK Fast webinar series. Talking with some passionate, clever and insightful colleagues from around Greater Manchester we discussed the wide array of support and advice to start-up businesses.

You can access the video of the whole conversation and others in the series here 

If I was re-starting a business today, I’d share the advice we give to many new or emerging companies. Essentially, there are a few core factors that in my view make a huge difference to a new business idea moving from paper to become a thriving company:

1. What is your purpose? Setting out your mission for starting the business helps you look to create a strategy and culture to the business that is consistent and coordinated. It can draw investors, partners and employees to your business as they buy-in to your purpose. (Check out our tips on strategy here).

2. Is there a demand for the product or service? Without this you may only ever sell to yourself! A great idea is nice (and great ideas are needed). However, it is only commercially viable if it is wanted by others.

3. Is there a profit in the product or service? The price you can charge customers has nothing to do with the cost of production, but you do need a profit margin in it. The value a customer places on what you are selling determines if the market will sustain your new business. A business needs that profit buffer and to know if it is (or is not) there (as we share here).

4. Never loose site of the cash. If you are the owner, you need to understand the money. If you run out of cash your bank account will not clear payments on good will. Even when you grow, it is easy to let costs rise and your cashflow suffer.

5. Focus on the marketing and sales. Great ideas rarely sell themselves; they will still need mechanisms to share and promote their value. These processes need constant attention, assessment and energy (we have some ideas on this).

I know there is much more to a business than the five points alone. Things like structure, premises, people, equipment, legalities, suppliers, and so on matter. However, if you have a clear purpose, products and services that people be sold at a profit, manage your cash well and market the idea you have the engine of a business.

If it sounds like hard work, that is because it is. According to my maths (from reading reports) less than 1 in 10 people start a business and only around 25% of them create a company that can employ someone other than themselves. So, if you have the desire to try, then we’d love to talk with you and help you focus that motivation to be successful

5 Ways to Stop Your Growing Organisation Becoming Chaotic

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Last week I spent several hours with a group of brilliant business leaders who want to scale their companies on another cohort of our Inspiring Business Leaders series. We delved into the leadership they need to grow their businesses and explored how to generate high performing teams in a context of constant change. They left the session with tools to assess their own leadership skill set, ways to motivate teams and an approach to measure success.

Although many topics were explored in the seminar, one that was most revealing came when we mapped the organisational structures in the room. Everyone could draw (albeit some more neatly than others!) their current organisational map. However, thinking ahead 2 or 3 years and drafting how the people in a business should connect was much harder. Running a company of 10 or 20 people is busy; but leading a fast growing business or 50, 80 or 100 will be very, very messy without a plan. Success, in the case of these entrepreneurs really could ‘kill’ their business.

So, we shared 5 ways to get control of these impending changes and stop organic development or employing ad hoc roles that will unbalance a fast scaling business.

1. Know your purpose. Have your purpose written down in a succinct, clear manner so everything you do can reference it maybe even add your core values. Without this guide, your memory of the reasons you state now will fade as you become busier and events will shape your business, as your decisions will not be made to a consistent plan.

2. Remove yourself from the mix. If you are the founder or leader now, try mapping the future of the business without your name in the chart. This way it forces you to think through your role and responsibilities and divide them up. It can also stop you building a business that just amplifies your weaknesses!

3. Draw, draw it again and then re-draw some more! An organisational map is not the only plan you will need but by writing it down and putting pen to paper the thoughts in your head become clearer and also you can share this plan with others and continually refine it.

4. Chose a scale. If you do not have business plan with targets choose a multiplier, e.g. in 3 years time the business will have 10 times more customers. Then you can consider what functions are needed as specialisms or what teams you do / do not need in a future business to serve that demand.

5. What does it mean for you? When a future organisational map is drawn look at the difference to how it is now and consider the skills, knowledge and experience you role needs to develop in. If you are a leader, you need to set a plan for your own development so you change with the business and do not hold it back. What training, what experiences, what change do you need to make to be ready for the ‘new’ shape to your business?

If you have begun to map the future you can then set the plans to transition from your current state of business to the desired state. You have a barometer to judge the decisions the business leadership make as opportunity and challenge come your way in the next few years.

If this challenge seems to new for you, reach out to someone more experienced or to an appropriate consultant to help. Clients often tell us that their problem was solved because they had the right people with them to explore an issue and set a plan to change.

Finally, what do you do to map the future of your business? Have you found an effective way to visualize the future? I’d welcome your views and insight in the comments section below or contact me direct on @berneeclarke.