LH AGENDA > small business

small business

Before I started my first small business I was working as a loans officer at a bank. My decision to work at a bank was mostly determined by the fact that I would have access to a phone so I could call my business partners as we developed our business. Hey, I was young and it made sense to me at the time.

This is back in the late 1980’s and early 1990’s. While working at the bank I was promoted to a commercial loans officer. As part of the training I was sent away for a week to learn what makes a business a good investment for the bank.

As I was building up my own business in the background I realised this was an ideal learning opportunity for me and my new business.

Here are the top three things I learned during that week. These tips have helped me throughout my 25 years to have a sustainable and enjoyable business.

1. Profit trumps turnover

It’s easy to equate bigger jobs and more money with doing well. Many times I have had the chance to grow my business. However I have paused and reviewed the situation. Often it became apparent that the outcome would be more stress and more turnover, but less profit.

The promise of big dollars can be mesmerising. It can interfere with our logic. We get excited and reckless. Work through the numbers and be clear on just how much of that turnover will end up in your pocket at the end of the day.

Work through the numbers and be clear on just how much of that turnover will end up in your pocket at the end of the day.

With new opportunities that promise significant growth, stop and check – what is the best case scenario of that new business partnership, or new stream of business? And what is the worst case? And where in the scale are you likely to end up?

The trick is to ensure growth remains profitable. Bigger jobs inherently should have bigger payouts but they also come with bigger risks. The risk needs to be worth the reward and vice versa.

2. Have a broad client base

It is very tempting to latch onto that golden client that provides 90% of your income. You love them, they love you. It’s brilliant. But what if there is a management change? What if you become complacent and drop the ball? What if your key contact moves on? Suddenly your entire business is on fragile ground.

An entrepreneur considers one source of income as a risky situation.

Your gravy train has just run out of steam. When I was at the bank, having all the eggs in one basket was a red flag. It was risky. An entrepreneur considers one source of income as a risky situation. An employee considers it safe.

This doesn’t mean you can’t niche your services. It just means you don’t have one major client for your business. A broad client base will help sustain your business through the highs and lows. And if you can cover a few different industries, you can ride cycles as they occur.

3. Know your numbers

The number one reason for business failure is because the owners aren’t on top of their numbers. On this course I learnt to read a balance sheet and a profit and loss statement. These days your accounting package gives you a dashboard that quickly summarises your situation.

As a business owner you need to understand your accounts.

As a business owner you need to understand your accounts. You should set yourself goals each month and break that down to a easy number or two. For me I understand my margins so by looking at my turnover I can tell how well I am tracking. That makes it simple to set an monthly (and weekly) target.

The value of this is mostly when you miss the target. Because I know what I should be getting, when I’m short of the target, it reminds me to ramp up the marketing; makes some calls; follow up some clients. Without having this reference I could cruise along oblivious to the oncoming iceberg.

Always learning

It’s funny where the lessons of business (big and small) and life come from. It never occurred to me the value I would receive from that short term job all those years ago!

What are the key lessons that sustain your business? Tell us in the comments below

After 22 years of running a successful small business I’ve accepted, and in fact embraced, the joy of being small.

I have a video production business and I have a part time editor (although he’s kept pretty busy) and I work with freelance cameramen, producers and directors. I see a lot of small businesses feeling pressured to grow, get bigger, take on more staff.

I’ve had opportunities to do that over the decades but each time I’ve looked at it and considered this question:

Will this be of benefit or will it cause more stress, more costs, less time and less profit to my business?

And you should ask yourself the same.

I guess for an entrepreneur I’m conservative. When I started my business I wanted to enjoy it. And I have.

For some people they want to be the next Steve Jobs and I wish them all the best. For me, however, I simply want to enjoy what I do and be rewarded appropriately for my creativity and expertise. It has always been about the journey. About enjoying the ride.

I’ve seen people who work relentlessly until they retire and then die. What’s the point? It’s as if they are working so that they can achieve a lifestyle but forget to have a lifestyle along the way. Now is the only time we have to enjoy ourselves.

So I keep it simple. I book in crew for the jobs as they come up. I have tried having full time staff in the past but I found myself spending days thinking about what I can do to keep them busy during the quiet times. It would have been easier for me to pay them to go the beach so I could focus on the next sale I needed to generate.

Today more than ever it is easier to run a global small business with virtual and freelance staff.

People are available throughout the world on sites like Upwork, fiverr.com, freelancer, and 99 designs. For a small price you can compete globally.

Having a small operation allows me the freedom to prioritise how I want to spend my time. I’m free to schedule the school pickups, the ski holidays, the long weekends.

Of course there is also the responsibility to step up and work the extra hours when it’s required. At the end of the day the bank balance will always reflect how well your business is working.

For many years the mantra of business experts is that growth equals success. But how do we define growth? Is it a higher turnover? More profit? A bigger office? More staff? Or is it personal growth and development? Or is the mantra misguided?

My turnover has remained fairly steady for the last fifteen years. I haven’t grown in the traditional sense. Personally I’ve grown and I have enjoyed myself. For me success is about being happy.

For me success is about being happy.

Having health, happiness and love around you and the time to enjoy it.

And there is always growth of sorts happening in my business. I need to embrace new technologies, set new goals, develop new markets. Being steady and stable is not the same as being still.

There still needs to be activity focused on current goals. I guess my point is how big, hairy and audacious do you need your goals to be? That comes down to the individual and where they are at in their lives.

If you have a young family then you will never have another time to watch your children grow and change every day. So is now the time to prioritise your business so you can be present for those moments? That’s a personal choice.

For me being a parent is a priority and by having a business that I run, rather than a business that runs me, I am able to make time to be present for my children.

Let me clarify a point however:

Being small doesn’t mean doing it alone.

On the contrary having a robust team around allows you the freedom to enjoy your business. The key is to develop a team of freelance workers who work alongside when you need and alongside others when you don’t need them.

It’s about being smarter in how you distribute your workload so that quality results are being achieved with or without you. So before you take that next leap, ask yourself why are you doing it? Is it because someone told you that’s what a business does, or is it because that’s what you really want?

For me I want to enjoy myself and this is how I do it.

What is your why? Tell us in the comments below!

Check out Get Your Life Back ebook by Kasia Gospos, founder of Leaders in Heels, on how you can streamline and automate your business and life so that you have more time for what you really love.

“I’m on my social media accounts all the time – where are my sales?” is a cry often heard from many businesses. With limited time, we need to see return from our marketing efforts. However, all too often the effort we put into social media shows little, if any return.

It’s possible your business is making one (or all!) of the common social media mistakes below.

1. Ineffective Targeting

Have you gone through the exercise of making sure you are targeting the market you seek? Social media can’t be general – there is far too much traffic and far too many others trying to be heard to make general social media effective.

Look for groups that will be receptive to your message

Instead, look for groups that will be receptive to your message. Make sure the social media channels you are on are those favoured by your target market.

Don’t know exactly who your target market is? You need to stop all your social media efforts right now, and work that out before you waste another minute.

2. Failure to Engage

Do you post content that is interesting and valuable to your audience? Boring content that simply regurgitates ideas that are already out there is a sure-fire way to disengage your audience.

As the specialist in your field, you have information and knowledge that your target market doesn’t. Don’t be afraid of putting too much information out there – consider the example of the computer repair company Geek Squad. They have hundreds of videos on YouTube showing people how to repair their own computers and configure things correctly. Why on earth would a company whose business is to repair and configure computers put all that information out there? Robert Stephens, the founder of Geek Squad, said that their best customers are those who can do a little for themselves, then go to Geek Squad when it all gets too difficult.

Social media… is… about interaction and mutual benefit.

Engagement also means speaking to the people who respond to your posts. Social media, by definition, is social. It’s about interaction and mutual benefit. A simple ‘thank you for your comment’ can go a long way toward creating positive feeling around you and your company – which puts you front-of-mind when the person decides they need the services your company offers.

3. Failure to use Leverage

Once you have built up some trust with your audience, you need to leverage the relationships you have built. As with all relationships, if you don’t stay in contact, the relationship slips away. A regular email with a short message giving good information will always be well received.

As with all relationships, if you don’t stay in contact, the relationship slips away.

A master at this type of leverage-using is Phil Frost from MainStreetROI. He provides useful tips for social media usage in a regular email and always includes a little bit of personal information as well – about new staff members, or how he took his daughter to swimming lessons, or how he and his wife managed to get some time off to go to the movies.

Personalisation of your business messages to those you have already started to build a relationship with means they will engage with you as a person – and they are much more likely to read an email they get from a person they ‘know’ than a faceless company.

Every now and then Phil sends a sales message – but since most of his posts are interesting and informative, his readers aren’t irritated at receiving the sales pitch – in fact, they have such a good opinion of Phil (and they feel like they ‘know’ him) that they seriously consider his pitches when he sends them.

4. Not Enough Automation

As small business owners, we have limited time. Keeping up with what needs to be posted on your social media channels can suck up loads of your time. This is where you can use automation to relieve your load.

I certainly don’t advocate doing this instead of posting your own content. You need to show that you are a thought leader in your industry and niche. And I don’t advocate posting any old thing to your channels. All this will do is lead to poor targeting of your efforts. But I do advocate using the tools available to you to make your job easier. And for this reason, I suggest that instead of always writing your own articles, you can curate posts by others, and schedule them to go up on your sites at regular times.

You need to show that you are a thought leader in your industry and niche.

First, sign up to Buffer. Buffer can be used free to schedule up to ten items to post to your social media accounts at a time. If you choose to post daily, that means you can load ten days of content at a time. If, like me, you like to post several times a day, you can schedule 2 to 3 days-worth of content. The paid version allows you to schedule with no limitations.

On Buffer you set up the social media accounts you wish to post to (your Facebook, LinkedIn, GooglePlus, Twitter accounts are all that are supported), then create a schedule for each account you wish to post to. Once Buffer is loaded on to your computer, you will see the Buffer icon has been added to the top right hand corner of your internet page. That is where you schedule from.

Second, find a good blog aggregation site that has information that will be relevant to your audience. These are also called news aggregators, RSS feeds and blog directories. There are plenty of them to choose from – bloglines.com, technorati.com and blogarama.com are just a few. My favourite is a relatively new one called Alltop.com – it sorts blogs into subject matter, making it easy to find what you are looking for.

Once you have found an article that will be of interest to your target audience, click on the Buffer icon. You will be given options to post now, or to schedule, and all of the social media accounts you signed up to Buffer will be shown. Select the one(s) you want to post the content to, and it’s done.

5. Too Much Automation

If the only things you post are curated content, you will lose audience engagement.

You do need to be very careful with automation though. If the only things you post are curated content, you will lose audience engagement. And if you make no responses to your audience when they respond to your posts, or automated responses that are not well executed, you will come across as faceless and corporate – instead of personable and social, which is expected on social media.

An example of too much automation comes from the Twitter account of Bank of America – a robot noticed a comment by a person who was issued a move along notice while he was chalk drawing on the pavement outside Bank of America. The first automatic response made no sense given the content of the original tweet, but after that, regardless of the tweets’ content, the account offered to “review your account with you to discuss any concerns.”

Capture

The bottom line is, think through the strategies you are going to use to control your social media accounts. Know what you want to accomplish, and know how you are going to accomplish it. Know the pitfalls, and keep your social media clear of them. That way, you will be seen as a knowledgeable, friendly and –most importantly – social member of your communities.

Featured image: kdonovan_gaddy

Bree Vreedenburgh

Bree runs a company, BV International, which offers Franchisees and Small Business owners the opportunity to gain professional coaching that is designed especially for them. When she’s not working, Bree can often be found writing plays, and treading the boards at her local community theatre. She has also written several short business books and is currently in the processes of publishing her first full-length business book.

Bree can be contacted on 08 6365 5405 or by emailing bree@bvint.com