The key measures for small business success are increased turnover, profits and number of staff. But the further along the road of entrepreneurship I get, it’s how it ‘feels’ that is the truly important benchmark of success for me.
Now there’s a very clichéd statement from a female entrepreneur if ever there was one…but let me explain.
I’m seven years in to running our Social Enterprise and B Corp, Cause4. The small idea behind the business was that we would aim to run an enterprise that could work in the charity sector to support organisations to change, grown and raise funds. We’d be fleet of foot, employ brilliant and interesting people and do great work. So far so good….
Well, we’re in touching distance of all of that but in the journey to get here it now feels like I’ve taken several wrong turns, listened to some poor advice and most importantly often overridden my gut instinct about what’s important in relation to my own core values. It’s all too easy to get hooked into trying to meet those traditional and more ‘expected’ metrics of entrepreneurial success, and my hunch is that often that in fact slows us down.
I was lucky when we set up the business in 2009. It was at the beginning of the recession, we had good track records and there was a huge demand from organisations to raise funds and for new approaches to set up business models for charities. Therefore, rather unexpectedly, we were able to grow quickly. We received good attention, and won a few awards for successful start ups – which gave us good momentum. We were also lucky to grow year on year and employ lots of staff; indeed, we’ve given over 80 graduates their first career experience in the sector in seven years.
But like many small businesses, this early success also pushed our brand ahead of our infrastructure and ability to deliver and, in that situation, it can be hard to maintain quality to your desired level, to recruit staff that are able to deliver to a high standard and to create a culture that feels good.
As a colleague in a similar situation outlined, this sort of ‘success’ comes before a fall. He reported that despite employing 20 staff and having grown a business quickly – he had never worked so hard, felt under so much pressure, and been ‘so unhappy’. He’s since gone back to a smaller, freelance model that is more financially successful, and more importantly he’s happier, doing better work and sees his family once in a while.
Similarly, another colleague who runs a successful PR agency says that the first question she is usually asked is ‘how big is your PR agency?’ When surely the first question should be ‘what press coverage have you generated for clients and how effective are you’? She’s thinking about getting some cardboard cut outs to sit in her office so that she’ll be able to report increased members of staff, and she can then get on with delivering the excellent media coverage that she’s known for.
At any time in the life of an entrepreneur there needs to be some pause for reflection. For me, my time came last year when I became a Mum for the first time. Whilst taking a short maternity leave I had time to really think about the business for the first time in years and, more importantly, where I was in relation to it. Supported by some very good coaching I was able to really think about what makes me happy and what makes me stressed. For me, the stress comes from worrying about the quality of work going out of the door. If you grow too quickly there’s a real danger of quality suffering and as the founder of the business you get tied up in areas of the business that takes away your key skills from the central and important task of delivering for clients. My colleagues above now spend over 90% of their time with clients, and their businesses are thriving because of it.
It can be easy to assume that all business owners want to grow their company, and whilst our economy desperately needs some high-growth unicorns with billion dollar valuations, the majority of the SME community doesn’t have either this potential, or this aspiration. Indeed, according to the Federation of Small Businesses in 2015, 76% of businesses in the UK did not employ anyone aside from the owner – that’s over 4million non-employing businesses accounting for a huge swathe of the £1.8 trillion of income from SMEs coming in to UK PLC. And whilst creating jobs is important, so is delivering value.
So I’ve decided to ditch the key metrics of turnover and staff and have replaced them with quality of work, company culture and, well, ‘how it feels’. I’ve got to run a profitable company otherwise we have no room to invest, and I’m certainly not taking anything away from my desire to grow a good business that employs lots of staff – but I want to do it in a way that maintains core values. If that requires a bit less ambition, then all to the good. It’s more important right now that we develop a small business that can deliver what we set out to – interesting people in a room, doing interesting things – and frankly that’s worth 100 times more to me than improved turnover.
And the irony is not lost on me, that if we slow down a bit and get those things right then we might even achieve that as well, albeit at a slower pace but perhaps with a more sustainable future.
So, to the investors and financiers out there, you need to measure what you measure – after all it’s a numbers and risk game for you, but for the Founders seeking to grow a business let’s maybe look to reevaluate what success looks like. After all, being judged differently will also surely create a more compassionate environment that supports more people to take the plunge into enterprise – and that’s got to feel good.
By Michelle Wright, founder and CEO of Cause4