When people go into business on their own, they are typically looking for some or all of the following things:
- The ability to make their own decisions
- Not having to answer to ‘the boss’
- Building a business by design, from the ground up
- Taking holidays when they want
- Spending more time with their family
- Making more money
What they actually get in too many cases is…the complete opposite. If you think about it, a business needs the following 5 functions working well to thrive and prosper:
- Product or service development — it needs something to sell
- Marketing — a means to connect the product or service with its likely buyers
- Sales — a process to turn the marketing into money
- Technical expertise — the ability to make or deliver the product or service to the end customer
- Support functions — administration; finance; people who ensure the wages are paid and the lights are on
It is extremely rare to find all of those skills in one person.
And this is the primary reason why the majority of businesses fail within 5 years and fewer than 5% make it to $10 million revenue.
For starters, what can you do?
1. Play to your core strength
Firstly, figure out what you are very, very good at. It could be product development. You might be a crack salesperson. Or perhaps you are an excellent ‘delivery’ person. Whatever it is, isolate your core strength (for there will usually be one of the five areas that stand out above the rest).
A big business is rarely anything more than a small business that did the right things well.
It is important to figure out what processes you have to get absolutely right early on in the piece. I admonish all small business owners to spend serious time on this.
To quote the late, great management thinker, Peter Drucker:
“There is nothing so useless as doing efficiently that which should not be done at all.”
I recommend a timeless classic to all budding and existing entrepreneurs who are serious about building a proper business rather than simply creating a new job for themselves. The book is called The E-Myth Revisited by Michael Gerber.
It is a quick and easy read and will give you powerful insights into HOW you can take my concept of isolating your core strength and apply it to your business.
Essentially, Gerber helps you create an organisational chart for your business and put names in every box. As you can imagine, if you are a sole proprietor or have just a small team at present, your name is going to appear in a lot of the boxes. That’s OK – you just need to put together a plan to gradually remove yourself from the boxes that do not represent your strength.
2. Get serious with numbers
Many business owners get stuck because they do not understand the financial implications of the decisions they take. For example, how many customers can I afford to lose if I put up my prices? Should I hire an assistant to expand the business, or am I better off doing everything myself and keeping the profit? Should I remain as a sole proprietor, or would I benefit from a partner (or vice versa!)? What happens to my family if something happens to me?
If these are the sorts of issues that are on your mind, get professional advice. You’ll find that a proactive accountant, for example, could really put your mind at rest with assistance in these areas and, as such, can fast track the support function of your business.