By Shaz Nawaz, aa accountants
You’re probably already aware that around 80% of start-ups fail within the first 5 years. In fact many start-ups know the odds are against them. Yet not many seem to find a way of breaking through. Most people just go into the kitchen without realising how hot it’s going to get!
Here are a few thoughts for you to consider:
Lack of skill or expertise
You may be really good at your job. Better than most perhaps. But this will only take you so far. Having technical competence or skill is one thing. Having a skill-set to run a business is totally another thing!
You weren’t taught how to run a business. You were taught how to be good at your job. It’s like being able to drive a car. Next minute you’re in an F16 fighter jet. You’re thinking that would be stupid. And you’re right!
To run a successful business you need to understand how a business works. Once you can grasp this, you’ve improved your learning – you’re working towards the 20% who succeed now! Stupidity now becomes inexperience. The good news is you can deal with this.
Getting prospects (Hot leads)
Your number 1 role is to promote (marketing) your business. You probably can’t afford to pay someone else to do this in the early days. So, get a grip. And make a start.
Spend 60 minutes each and every single day on this function. Think of all the ways you can acquire new customers. Then work on the easiest, cheapest and quickest means first.
If you can generate enough leads (interest) then you’re ahead compared to most. That’s a pretty good place to be. Especially in the very early days. But there’s more…
Converting prospects (A customer, or three!)
…You’ve got to turn some of the leads into customers - otherwise you’re going home hungry again. Now you won’t be able to do that for long, will you?
You need to work on a sales system which helps you win as many of the right customers as possible. However, you’re not too worried about this at the start. You just want some customers – paying customers that is!
Doing the work (The real deal!)
You’re pretty good at this, aren’t you? This is why you kind of got started. The idea here is to make the business process dependant. Streamline your processes like a conveyer belt operation.
If you don’t get the work done on time every time - just like you said you would - you have a problem. Speed, efficiency and quality are key here. You need to work ON your business alongside working IN it.
Customer care (Love ‘em)
Make sure you have a caring customer service plan. This should be crystal clear before you start your business. This will have the biggest impact on your customers. This is what they’ll judge you on. Most customers don’t know how good you are at your job. But they’ll perceive this based on your customer service.
Get this bit right and you’re going beyond those first 5 years. You need to become obsessive about this. Once you can create happy customers, guess what?...
…They’ll stay with you for longer. They’ll buy more from you. They’ll refer others. They’ll be less resistant to price increases. You’ll need to spend less money on marketing. That’s a good start, isn’t it?
Cash flow (The King)
You know cash is king. It’s only so when it’s in your hands. Or in your bank account! Make sure you have clear terms of payment. Stick to those terms. And collect money as and when it is due.
Most start-ups fail due to poor cash management. The problem is they never collected it so there was no ‘management’ to do!
A customer is no good to you unless they’re a paying customer. In fact they’re a buyer until they’ve paid. Only then do they become a customer. If you can charge some of the monies up front then be sure to do this.
Stop thinking like an employee – that won’t get you very far. Well…it may get you another job! Start focusing on sales, marketing, fulfilment and customer care. You need to move on from being a technically competent individual – you’re an entrepreneur now. Start thinking and behaving like one. You know you can!