Six Practical Success Tips for Business
Books, from textbooks to those of the paper back variety, seminars and workshops of varying durations, off site strategy meetings, conferences, lectures, talks on videos and CDs, and various other innovative media, have been employed both here at home and abroad, to tell us what we need to do, in order to be successful in business, particularly if you are a small to medium business.
While a select number of some of these are very good, well thought through and applicable in real life situations, a substantial number of these are cloaked in high sounding theories that lack a practical application element.
Several years ago I looked around for an authoritative and practical book, a talk or some literature that would give me what we used to refer to, as “critical success factors” in the corporate world. In my mind, I was looking for 3-5 things that I would need to pay attention to in order to succeed as a small business. There was an abundance of literature and talks on the subject that I came across, but not one that distilled the critical few factors in one place.
So, what I have I have learnt is based on my practical and painful learning experiences as a small business. It was not easy to reduce the many lessons I have learnt (and continue to do so), to a critical few. However, the following made it into my top 6, and I hope that you will find them useful too.
- Invest in time to think about your business
One can never invest too much time to think seriously about the type of business you are in or starting out in. Some of the critical questions you need to continually ask yourself are the following:
- What is your product?
This may sound like a foolish question but it is actually important because every product or service is there to solve a problem that customers have. At a deeper level, your product is not always the physical good you make or service you offer. For example, customers worried about the welfare of their families or the fear of losing their household goods to thieves need security. So, if you are selling residential electric fencing, life or household insurance, you are actually selling security, not grey unattractive wires or just a piece of paper with terms and conditions on it. That is why it is important to continuously refine your thinking about your product or service, and the needs it meets.
- What value is your business bringing to your current and potential customers?
This must be defined not from your point of view but from the customer’s point of view. Too many people in business make the mistake of coming up with a statement like: we provide first class and high quality products to the printing industry. Unfortunately, it is not about your product’s features and benefits, important though that is. On the other hand, a statement like: “our latest range of high speed printers reduce printing costs by 15% per copy” conveys a sense of real value to your customers.
- Who are your customers and what are the key characteristics of these customers?
Your original customers may have changed, so you need to continuously understand the key trends in your customer group, their age groups, gender, location, lifestyles and their attitudes. It is also important to have a firm idea about whether this group of customers is growing or shrinking because it will affect what you do in your business.
- Keep an Eye on the Competition
Who are you competing with, for these customers? No rugby or soccer team goes out to win a trophy in any league without first understanding their opposition and what makes them successful. This in turn helps you to analyse the strengths and weaknesses of your rivals on a periodic basis. You can then also make decisions about what changes you need to make to your product or service. Every business person has to accept that their enterprise or product operates on rented time, because even when you are doing well, be sure that someone else is working day and night to take away your honey pot.
- Constantly Review the ways in which customers buy your product
It has been said by some, that great products or services are nothing if no one knows about them. A channel to your customers that is working today might not work as effectively in a year or two, therefore you must stay up to date with the changes in your market and product. You must never be taken by surprise because trying to play catch up in a changing market is costly and can be fatal for your business. Years ago, if you wanted to buy a bus ticket, you went down to the station to buy one. Not anymore, because you can now either do it online or at your local neighbourhood supermarket. Bus companies that didn’t see this coming have lost market share to those that anticipated this move and made the right decisions in advance.
- Keep your Focus
Small businesses that achieve early success are sometimes blinded by that initial momentum to think that they can now do everything. The results, in the majority of cases are disastrous and end up ruining even that part of the business that was working well. Years ago, I came across a small BEE operator based in Pretoria who was doing very well in the transport business. Buoyed by that success and still operating from the same resource base, they ventured into mining and made a glorious mess of it. The new venture then bled the good business dry and before long both had closed down. There is nothing wrong with wanting to grow your business, but you need to manage the growth process carefully. Resist the urge to be driven by the emotion of success in one area because the chances of wholesale failure are too great a risk. Just like an amateur golfer, if he/she turns professional too quickly because of the lure of making more money, they might find success hard to come by. It is therefore advisable to stay singular in your focus, at least for the first few years.
- Find a Mentor or Mentors
The world of running your own business can sometimes be lonely because the buck stops with you. Add to that loneliness, the issue of personal egos and pride that most people have, which blinds them to the fact that we all have blind spots. Whether you are starting out in business or fairly established, I cannot over-emphasise the importance of having a mentor or a group of people that you can go to, when you need honest feedback. Some of the best business leaders in our world use the services of a coach or Mentor. In a 2014 paper titled; “Why Great Leaders have a Coach Behind them” Ray Williams refers to research done by Sydney Finkelstein, author of Why Smart Executives Fail, who followed several spectacular failures during a six-year period. He concluded that these chief executives had similar deadly habits chiefly related to unchecked egos.
While one can easily find a business coach these days, finding a mentor is slightly more difficult. However, a mentor or mentors must be people you respect and trust, preferably with more experience and or expertise than yourself, must have time for you and can speak openly to you about your business or personal leadership blind spots.
- Look after the Cash you Earn.
Years ago I came across the following saying: you can run at a loss in your business for several years, but you can only run out of cash once. Once might actually be one too many. Just make sure you don’t run out of cash. At the risk of using an old cliché, cash is what runs your business on a daily basis. So, don’t be caught without it. As soon as you start earning some money in your business, create a small saving fund or scheme for that rainy day. Some people secure a credit line with their bank or funder long before they need it. Just have it as back up in case things go wrong.
Looking after what you earn also involves being very diligent about collecting money from clients. Have a very simple process in place for doing this, check on it regularly to ensure that it is working well and that the money is in the bank. Sales people know that a sale is not really a sale until it is paid for. Don’t be drunk on making or creating orders, spend days giving out endless quotes. These are important functions but you must also invest enough or more time to collect your money that is still out there.
The above examples are by no means exhaustive, but emphasise the importance of identifying those few critical success factors for your business, and to relentlessly focus on them. Another equally important thing to note is that this exercise is not a once off event but a continuous learning and updating and understanding of your business, for as long as it is in operation.