Ensure your systems are in place from the get go
If you imagine your small business might one day grow to be a larger business – isn’t that the dream – it is crucial to have scalability in mind from the start. If that key sentiment isn’t factored in from the early stages then the sooner or later you’ll find someone coming along and making “an offer you can’t refuse”; the acquirer transforms your business and makes the super-profit you missed out on.
Take the types of “professional” businesses that successful larger corporations acquire. These aggregators have built success on acquiring professional practices such as legal, medical and financial advisory, that are obviously built by one or more partners with a particular skill set and they all have one thing in common.
They all fall into the same trap. They get caught up with seeing patients, advising clients, or going to courts or whatever it might be and they lose sight of their own business. They get tied up in “doing it” and don’t allocate time and resources to working on the business.
Many think their business is not scalable and yet truly most businesses are and founders often don’t appreciate the real value of their creation because they can’t imagine scalability and don’t structure their operations to realize it.
In terms of getting from that initial phase to where you are growing the business it becomes vital that you move into a phase where you engage systems, engage capital and engage a greater team. It really becomes a game about understanding what your personal strengths and what your personal weaknesses are in order to know what you need help with and where you need to start to get your structure right.
Consider your retirement plan!
As mentioned above, you can and should be building your business to be scalable and this is valid with any kind of business. However, the choice then resides with the owner and what you actually want to do with it at the end of the day.
Some owners imagine a future where they will retain the business and it will provide endless income or perhaps they will achieve this through handing over control to family members. This can be a valid exit strategy but it will only work if the same disciplines are brought to bear as if the business was to be sold. The business will be stronger and healthier in the long term if it is structured properly from the start. The alternative is to join the crowd of family businesses that have been built up to great success by one generation and then destroyed by the next.
Almost as soon as a small business is successful enough to have a future, you need to start thinking about developing a succession or exit plan. Having this plan in mind can really drive home the need for structure and systems for the business from early on and it will also contribute to the continued success of the entity.
Establish what strengths you NEED to drive your business forward
Let’s get one thing straight. Nobody can do everything. More so, nobody can be great at everything. We may have skills and strengths but we also have an array of weaknesses. One of the things that I think is an enormous challenge for people as they grow up in their business is that they have to change from doing to managing and a vast amount of people who are good at doing are not good at managing. That includes people, systems and processes.
This is a big change that everybody has to face and then, they have to really look at what they are good at, what they are not good at. And as I’ll go onto you really will be your best if you get help to do that.
You’ve got to look at what the business needs. You need to recognise when you need to go and hire external skills, management skills, sales and marketing, merchandising skills, whatever it is that you need to fill the gaps. This is a costly exercise and if you get the wrong person it can cause some damage – not just in terms of the cost of the person, but it can cause damage to your business. But if you don’t do it you will not be able to take the growth steps.
Don’t be afraid to ask for help
In the initial stages of starting a business, one of the simplest things and most beneficial things you can do is to go out and find somebody that you respect. Somebody else outside your business that you believe has got experience, skills, whatever it is, and just put it on the table. Ask every question you’ve ever had and ask them “what do YOU think I should do now?” If you’re lucky that person may become a guide and mentor for you or they may introduce you to somebody else who becomes a vital part of your journey. Perhaps you’re prepared to pay for that somebody to help you to do that – although be wary of the fact that there are a lot of people out there running certain business consultancies who are quite a good at charging but not necessarily good at delivery.
Your next consideration should be putting some sort of advisory board in place. That board could be made up of one or two people from outside of the business who can give you that sort of guidance and help you take things forwards. Knowing you have another perspective can build confidence and the steer you may need as of what you should be doing yourself and what you should be getting others to do. It’s a great way of easing into asking for outside help to build the business around you.
Many business owners find that this can be a great starting point because it requires less risk and certainly less cost than putting on a full-time employee that could cost the earth before realising you’ve employed the wrong person. This advisory board, once in place, can actually be of assistance in advising on a permanent team.
Putting any ego or pride aside, asking for help could be the most crucial move you make when it comes to building your business.