 With market competition in every sector more fierce than ever, a downturn in the economy and business owner optimism at an all-time low, it’s more challenging that ever to make your business a winner. Learn from the best with these savvy tips for small business success.
At least 12,000 companies go into liquidation every year, and the current business climate makes it increasingly more difficult for small businesses to weather the storm.
“Faced with a growing tax burden and an impenetrable maze of red tape, businesses will have to continue operating in a regulatory and fiscal environment that offers very little support or encouragement,” says Ivan Matviak, Head of Bank of Scotland Business Banking.
But it’s not all bad. “It’s a challenging time and I think the next year or two is going to be incredibly challenging for businesses,” says ex-Dragon’s Den TV entrepreneur Rachel Elnaugh. “But on the other side of that, I think there is potential for businesses which look at ways of servicing the needs of people in the current time. In any period of adversity there’s always opportunity if you look hard enough for it.”
Find out how with these small business tips you can take your small business to the top.
Control Your Cashflow
The number one reason businesses fail is cashflow, with insolvencies up 17% year on year, according to Rachel Elnaugh. Make sure you’ve planned how you’re going to manage your cashflow by forecasting future costs and budgeting too.
“You can have a hugely successful business but if you run out of cash it’s game over,” she says. “So I think particularly in the current climate I’d say hold onto your cash and batten down the hatches. You absolutely have to control cashflow.”
Fellow Dragon’s Den retail magnate and serial entrepreneur Theo Paphitis agrees that cashflow is a key element of business.
“I keep telling people that cashflow is one of the most important things in business,” he says. “Too many good ideas fail because they don’t have enough money coming through.”
Look at Your Product Critically
You may be excited about your product, but to make your business a success you have to look at your product honestly and without bias to make sure it’s truly viable and sustainable. Enlist the advice of others and listen carefully to their criticism, even if you don’t like what you hear.
“You’ve got to take on the negatives and then realise that you actually have a real business venture,” continues Paphitis, whose businesses include the lingerie chain La Senza and Rymans the stationers. “If you can do all that then you have a real chance of being successful. The problem people have is that they will be so passionate about something that they ignore any criticism you throw at the product.”
Don’t Give Up
It’s very easy to have a brilliant idea that will take your business to the next level, but actually following through and making it happen takes far more effort.
“Whenever you have an idea, give it the three second rule. Ban yourself from hesitation and just go for it,” says Yo! Sushi founder and serial entrepreneur Simon Woodroffe. “Do whatever it takes to get the job done – put some time into it and get the research done. One of the best pieces of advice I can give to someone looking to start their new business is get rid of the TV and don’t give up on the day job until you’re further in.”
Network
Without networking, it will be more difficult for you to expand your business and keep up with the competition. Word of mouth is a fantastic opportunity to market yourself and get your business noticed, and it’s the best way to connect with contacts, clients and investors.
In fact, if you are not talking to people and finding out what your competitors are doing, then you are going to be at a disadvantage, according to the British Chamber of Commerce.
Make Mistakes
Dwelling on a decision and weighing up the consequences for too long can be time consuming and makes your life more stressful than it needs to be. Instead, adopt a win-win attitude – there are no wrong decisions, as even if things don’t go as you’d hoped, that’s a lesson you can use for future business situations.
“Don’t be scared to make the decision,” says The Apprentice runner up and TV entrepreneur Ruth Badger. “It’s the decisions you don’t make that you regret and you can learn from the ones you do. Be prepared to make mistakes, because you will. Nobody is perfect in business. Anyone who thinks they are is either foolish or watching The Apprentice and is not in business.”
Focus on Sales
It’s easy to get bogged down thinking about finding premises, branding yourself and setting up shop, but although these things are important, you won’t get anywhere without concentrating on selling your product.
“What you should be focusing on really is sales and deals, because essentially if you’ve got sales and revenue streams flowing then everything else is easy to sort out,” says Elnaugh. “But a lot of people spend a lot of energy doing things that are not related to revenue generation. It’s a very easy trap to fall into.”
Think Positive
It sounds ridiculous, but a positive attitude will attract investors and clients who can see how much you believe in the business and its future.
“I would say that success is much more a state of mind and an attitude than any sort of business skill – it’s about keeping positive and attracting the right kind of help, support and opportunities to get you through,” explains ex-Dragon Rachel Elnaugh.
Follow Your Passion
Rather than thinking up a get-money-quick scheme, invest your time and money in something you love – you’re guaranteed to get better results, stay motivated longer and put the necessary extra effort in to make your business a huge success.
“I’m a great believer that you should not go into business without being passionate about something,” says Paphitis.
Elnaugh agrees. “The businesses which are most successful and fulfilling are ones where you follow your passion and create a business at the heart of which is something you love, because that will give you the natural energy to attract all the right people, opportunities and customers,” she says. “It’s a great gift to yourself to make it something you really love doing.”
“Enjoy it. If you don’t enjoy it, get the hell out of it,” says Badger.
Make Sure Your Business is Scaleable
“If someone wants a business that can be repeated, rather than something that just gives them an income, then you have to make sure that you have a scaleable business,” explains Paphitis. “That’s a key element many people forget. It might work on your own, but then as soon as you bring someone in to help it all falls apart, that’s not a real business to me, that’s a lifestyle business. A lifestyle business is just making a living.”
Use Your Cash Wisely
Yes, you need to hold on to as much of your cash as you can to keep your cashflow going and keep a tight rein on the books and tax returns, but you also need to accept that it’s necessary to spend money to make money.
“Be prepared to invest your pounds to get your ten pounds,” says Badger. “You are going to have to spend a bit of money to generate business, but so long as you spend it wisely then it should work in your favour.”
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