There are 10 key strategic imperatives every business needs to understand if it’s to be successful.
In all of your marketing material, emails and social media, clarity is the foundation of selling. Avoid jargon, speak in simple language and don't assume that your prospects have an encyclopedic knowledge of industry terms. Be concise; get to the point and be relevant. Speak in terms of the prospects’ needs.
To people who find your message relevant, you can be a godsend. They need you and they want what you're offering. To everyone else, you're spam. For example, if you're selling car wax, people who own luxury cars will probably be glad to hear from you. But those who drive cheap cars just to get to work probably don't spend a lot of time waxing them. Know your customers and where to find them.
The best sales people qualify their prospects and only sell to people who are ready to buy. This is more specific than just finding the right market. You're looking for people within that market who need precisely what you're offering.
Make promises that you can deliver on more often than not and...
A business that delivers on its promises will thrive without having to spend millions on advertising. Playing it straight with your customers' expectations isn't just ethical – it's also profitable.
This will allow you to find out what you're doing right so that you can keep doing it – and what you're doing wrong so that you can make changes where necessary. If you're not going to make the necessary changes – don't bother gathering data in the first place.
Growing as a small business doesn't mean opening additional premises you can't afford. Growing means improving profitability, for example, by exploring an untapped market or discontinuing unpopular products. When you think of growth, think strictly in terms of profit margins and customer satisfaction.
If your business is costing you more than it earns or if it's just breaking even, it's not a business, it's a hobby. Taking out a second business loan and maxing out your credit cards is not cashflow. Be realistic about how much you need to stay in the black and how you're going to keep that money coming in.
Where are your shortcomings in terms of skill level, experience, customer service, marketing, etc? Spend some time thinking about what you could be doing better and how to improve on it. That could mean improving your knowledge when you have time or (if you can afford it) hiring someone who can bridge that gap for you while you get up to speed.
Successful entrepreneurs build something bigger than themselves. Building a business takes a lot of work; it can be both exhilarating and exhausting. Almost nobody has the energy to work for years without having a day off. So, one of your goals – and something that you should write into your business plan – is an opportunity to take some time to yourself. Whether your aim is a month-long vacation or selling the business, you need your business to be able to run without you.
Whenever you're faced with a decision in your business, double-check the 10 points above. With enough experience and education, you'll absorb these imperatives. They'll become second nature. Until then, whenever you feel uncertain about a business decision, check back and make sure that your ideas are financially and strategically sound.
Copyright © 2014 William Buist. William Buist is the owner of Abelard Collaborative Consultancy and founder of the exclusive xTEN Club. He is also the author of At your fingertips and The little book of mentoring.
Sir Phillip Green has topped Britain’s first ever Rags to RichList, closely followed by Sports Direct owner Mike Ashley and Virgin billionaire Sir Richard Branson.
Start Up Loans (a government-funded scheme that provides advice, business loans and mentoring to startups) compiled the Rags to RichList after researching leading entrepreneurs’ start-up capital and the current value of their businesses.
With just a £20,000 loan to start his first business, Sir Philip Green went on to take over the Arcadia Group and is now worth a staggering £3.88bn. Similarly, Mike Ashley used a £10,000 loan to start Sports Direct and is now worth £3.75bn, while Sir Richard Branson’s startup capital was a mere £300, which he used to start building an empire now worth £3.6bn. Read on to find out who else made the list.
The world of work is changing. The Connected Age has enabled business to become more agile. Online work platforms provide access to professional talent quickly and affordably, meaning businesses can staff up when they need to, and quickly respond to changes in market demand.
Outline exactly what’s expected and try to answer the freelance’s questions up front. For example, if you’d like to have an article written, specify exactly what you’re looking for and don’t neglect details such as word count, purpose, subject and key themes.
Spell out the skills you’re looking for. If you’re seeking someone with a background in animation or Adobe Photoshop, make that clear. Include the timeframe and decide whether you’ll be hiring on an hourly or fixed-price basis. Hourly projects are useful for ongoing work or if the scope of the project may change.
Outline a budget. Freelances are generally professionals who work online for a living. Set the price at a level that you believe is fair.
It’s important to consider all factors when evaluating proposals from freelances (not just the price).
First and foremost, you should avoid template submissions, and focus on those that are written specifically for your project. Look for professionalism and attention to detail, plus a logical structure and information flow in the proposal.
Some freelances will include samples of their previous work. Give the most weight to samples that are closely related to your task. Ultimately, it’s wise to select freelances that are most excited by the opportunity, show that they are truly interested in the work, and can bring enthusiasm and quality to the finished product.
In addition to a freelance’s proposal, you can delve deeper into their profile to get a better sense of how they will perform. Review their ratings, work history, accredited skills and examples of past work. Browse through written feedback from previous clients and see how the freelance responded to this feedback. This can be a good indicator of the freelance’s level of professionalism.
Consider the freelance’s expertise, but don’t be afraid of new profiles. Although untested, these freelances may be more motivated to impress you in order to launch their freelancing career. Use multiple forms of communication to screen candidates and get a better sense of how they’ll work. You can send emails or make video calls, but be sure to record all communication on the platform for safety and future reference.
If you’re hiring for a long-term or recurring task, do a small test project to evaluate two or three freelances before making a selection. You’ll get a good idea of each person’s skills and work style to help you make a better decision.
If you need to provide sensitive information, ask freelances to sign a non-disclosure agreement before engaging in further discussions. This will help protect your intellectual property.
When you’re ready to select a freelance and finalise negotiations, confirm the price and the job terms before awarding the job. If the scope of the project or milestones change, you can always update a project’s terms with agreement from the freelance.
Communication is key when managing online projects, and you should constantly ask questions and track progress to ensure outcomes and deadlines are met. Use the tools available to view work in progress, and set clear timelines for receipt of deliverables.
For hourly jobs, be sure to review timesheets on a regular basis so that there are no surprises. For fixed-price jobs, specify the milestones and key dates you expect work items to be delivered. This gives you multiple opportunities to view, approve and pay for work along the way. Request weekly reports on tasks performed, hours worked, files completed and plans for the upcoming week. Ensure all files are uploaded and all communication is tracked.
By using online talent you only pay when services are delivered. As the freelance completes phases of your project, evaluate their work. Is it what you expected? Be straightforward with your freelance about their performance, their professionalism and their overall contribution to your business. Feedback enables freelances to grow their careers and businesses to thrive.
When you’ve finished the project and paid your freelance, take a moment to rate their performance. Be honest and professional. You can provide feedback both one to one and for the broader community to see. Your opinion matters, because it is the most significant way clients differentiate between freelances. Once you get started, you’ll find that hiring talent online is a safe, fast and effective way to get things done.
Overtrading is where a business takes on a lot orders without having sufficient capital to fulfil them. This often happens when suppliers or deliveries are delayed, which can create serious cashflow problems. It can be easy to fall into the trap of taking on more orders than you can fulfil. In balance sheet terms, your liabilities outweigh your assets (ie debt outweighs cash in your business).
The business will likely be viable, with lots of interest in services or products, but without sufficient working capital, the business experiences a serious problem. Working capital is actual cash or funding you have in the business, minus whatever you owe to suppliers, bank, etc.
The idea is that if you’re selling more, you’re making more money. But are you actually receiving payments from customers? You must get your invoices out on time and keeps tabs on late payers. Always ask yourself if there is enough working capital within your business.
Overtrading tends to affect start-ups in particular, because finance can be very tight in the beginning. Businesses wishing to expand can also face problems if too many orders are taken without sufficient funding being in place.
If cashflow is a problem, look at ways to cut costs in the business. If you’re experiencing VAT or PAYE problems, agreeing a Time to Pay deal with HMRC is worth considering, because it can enable you to spread payments.
If your business needs restructuring and is running up too much debt, a company voluntary arrangement between the company and creditors could be the best solution. It’s a great option for viable businesses that need additional finance or just some extra help to restructure. Always seek legal or insolvency advice before going ahead with a restructure or insolvency procedure.
Copyright © 2014 Keith Steven. Keith Steven of KSA Group Ltd has been rescuing and turning around companies since 1994. He is the author of insolvency and turnaround website www.companyrescue.co.uk and has been nominated as Turnaround Practitioner of the Year at the Insolvency and Rescue Awards 2014.
At the Labour Party Conference in September, panellists from the world of business and politics told the audience at the Student Entrepreneurs Question Time (SEQT) event that technological advances meant today’s entrepreneurs have more available opportunity than ever. However, to succeed they must be prepared to fail, remain ambitious without spending beyond their means and seek expert advice when faced with more complicated challenges.
The event was hosted by the National Association of College & University Entrepreneurs (NACUE) and Santander, to enable would-be entrepreneurs to discuss key issues and challenges. Similar events were later scheduled for the Conservative Party Conference in Birmingham and the Liberal Democrat Party Conference in Glasgow.
According to research by Santander, some 80,000 UK university students combine studying with running their own business (“earning while learning”), with a quarter of these hoping to generate a wage for themselves from their business after graduating.
Students at SEQT appealed for increased practical support from the government and their universities, for example, through mentoring schemes. Other suggestions included making vacant office buildings available to university start-ups and for extra-curricular entrepreneurial activity to be assessed as part of degree courses.
Johnny Luk, NACUE chief executive said: "More students are setting up businesses and choosing to be self-employed than ever before. They’re engaging in activities beyond the classroom, such as entrepreneurial societies, and developing their soft skills, which is not always reflected in an exam grade. Students often find it difficult to engage with politicians. We work to advocate for these students, the dreamers, the strivers and the innovators, opening up more meaningful engagement channels between young people and politicians.”
NACUE directly supports more than 200 entrepreneurial societies at universities and colleges throughout the UK, while organising national events for students, educators and professionals, and seeking to influence government policy.
Many fantastic businesses continue to be born and supported on campuses throughout the UK. Post-graduate student Katerina Kimmorley, co-founder of Pollinate Energy, is the reigning London School of Economics Student Entrepreneur of the Year. Her fledgling social business provides solar lighting and other sustainable, affordable products to people living in urban slums in India, where more than 300m people live without access to energy.
Selected from a pool of 2,000 students and alumni, Pollinate Energy was commended for its impressive growth during its first 18 months. According to LSE: “A strong commitment to sustainability and inspiring entrepreneurial potential in others was also noted: local people are employed as ‘Pollinators’ to run their own mini enterprise and sell various products in their own communities.”
Katerina said: “LSE has supported Pollinate Energy from when it was just an idea to today when we are providing solar lights to people in more than 500 urban slums. It’s empowering to have the support of LSE. This year we’ll be replicating our model in a second Indian city to show it can be done in the 53 other cities in India that have more than one million inhabitants. Winning this award is a wonderful demonstration of LSE’s commitment to the practical application of research at the nexus of two of the world’s greatest challenges – poverty and climate change.”
The Apprentice is back for its tenth series and up for grabs is investment worth £250k and the chance to go into business with Lord (formerly ‘S’ralan’) Sugar.
The most likely question on many viewers’ lips during the first few minutes of the first programme might have been which of the 20 candidates is the most annoying and immediately dislikeable.
As usual, the first programme began with the candidates’ frankly laughable summaries of their skills and suitability for the role, which are intended to impress, but leave many of us cringing on our couches. “I get the job done. I walk the walk. I talk the talk. I dance the dance,” said one wannabe.
“There’s no ‘i’ in team, but there are five in individual brilliance,” stated another, this from someone who somewhat bizarrely describes himself as a “mix between Gandhi and the Wolf of Wall Street”. One female candidate opined: “The future belongs to those who believe in the beauty of their dreams”. Yuck.
As expected, many of the candidates couldn’t in fact “walk the walk”, after being tasked with selling hotdogs, T-shirts, potatoes and lemons on the streets of London, with company director Chiles (yep, Chiles) Cartwright the first to be fired.
Upping the ante this year, when Lord Sugar welcomed the candidates to the boardroom, he warned: “Now, this is the tenth year, so I’m going to start things off a little bit differently. What I’ve decided to do is to kick off with 20 candidates – 10 boys and 10 girls. That’s the good news. Here’s possibly not such good news. The process will still last 12 weeks. That means that I may decide to dispose of more than one candidate at a time. Be prepared.”
There’s no doubt that The Apprentice is mostly sheer pantomime bordering on farce, with the editing encouraging us to see the characters in a certain light. It’s intended primarily to entertain and hook us so we become willing travellers on a 12-week journey, during which time we’ll laugh, get angry, embarrassed and experience many other emotions. Whether we learn much about running a business is debatable, but who knows, we might even get to like some of the candidates.
But The Apprentice and Dragons’ Den could both be accused of perpetuating the ultra macho, hard-nosed, somewhat 1980s myth of business that encourages us to believe that the only way to get ahead is to trample over others in ruthless pursuit of profit and success at all costs. It also seems that everyone is or should aspire to be “an entrepreneur”, even if, in reality – they’re just someone who runs their own small business (nothing wrong with that, of course).
Many people have become totally turned off by the idea of “business”. Much of business reality TV would have you believe it’s a world inhabited entirely by cold, hard, self-obsessed egomaniacs. This seems to be supported by a recent YouGov poll into attitudes towards “the world of business”. Commissioned by business growth consultancy, Caffeine On Demand, the poll is based on responses from more than 2,000 members of the UK public.
Just 7% of respondents wanted their children to “go into business”, with 20% describing it as “corrupt and dishonest” and only 3% saying “it attracts nice people”. Almost half (47%) of respondents described “the world of business” as “dog eat dog”, with just 3% believing it to be “caring and responsible”. Almost a third were “singing from the same hymn sheet” when they described it as “full of jargon” too.
Apparently, Welsh people are most likely (60%) to view the world of business as “dog eat dog”. Scots were four times (12%) more likely to describe it as “a force for evil” than people in the South East (3%), with 19% of full-time students agreeing with the “force for evil” tag, compared with the national average of 6%, and 3% of 55-and-overs.
David Kean of Caffeine On Demand comments: “The results send a clear message to us as a nation. We need to revive a national belief that ‘good’ business is good business. For only 3% to believe business attracts nice people is extremely worrying – it means that the very thing that feeds the national purse is despised.
“We have all, but particularly younger people, been ravaged by Dragons and soured by Sugar. A generation of bright, decent people has been put off going into business because they believe you have to be a ruthless, fictitious stereotype.”
Blog written by Start Up Donut editor and freelance start up and SME content writer Mark Williams.