The 5 Essential things you must, must, must do when starting a business (that nobody has told you yet)
This week guest blogger Russell Smith, Chartered Accountant and Entrepreneur, shares his top tips on what you need to do to make your new business a success. He has had a lot of success growing his business over the last 6 years winning the Yorkshire & Lincolnshire Entrepreneur Award 2009 so if you’re just setting up or are at the early stages in your business you may pick up some handy tips here.
1. Get great at sales and marketing
Don’t listen to what anybody tells you, your business will be a success if you are great at sales and marketing. Whilst you absolutely have to have a quality product to back this up, if you are unable to communicate the value of what you offer then it doesn’t matter how good you are or how good your product is.
When I started my business I was given the advice that 50% of my time should be devoted to sales and marketing. This seemed insane, especially in the early days. But now I can totally see why. If you get great at sales and marketing, you will be a success, simply because your competitors will not have the same level of understanding of it that you will have and will not be able to grow their business at the same pace.
If you have any aversion to sales, you need to delete this from your memory banks as quickly as possible. If you run a business, you are a sales person – get used to it. You should be so passionate about what you offer, that you should be able to sell it to your granny, mother, father, brother, whoever! If you don’t believe in your product, nobody else will.
2. Get on top of your numbers
It doesn’t matter how financially literate you are now, or whether you have a financial background. If you are in business, you have to understand numbers. If you learn business numbers, you will make money, if you don’t, your chances of losing money are much higher.
Sales, margins, profits, cash, balance sheet – you need to understand these concepts but also conversion rate, average sale per transaction and customer are essential.
All your suppliers need to be top-notch but especially your accountant. Your accountant needs to not just be able to do what’s expected but be able to teach you what your numbers in your business mean so that you can make informed decisions. There are two types of accountant – proactive and reactive. The proactive accountant lives and breathes tax saving and profit increasing help for their clients. A reactive one will just be concerned with getting the paperwork correct. Choose the proactive one, even if it costs more.
3. Get your pricing right
Most start-ups will under charge. Some will charge the average market rate. If you want average results then do what everybody else does. If you want to be the best business in the world at what you do, then your prices need to reflect this.
You don’t make money in business by working hard. It’s not employment. You make money by making profit and your pricing is the single biggest equation in this.
4. Hire great people (even if it costs more – which it should)
Your team should be leading you to greatness. The market salaries don’t lie. You pay for what you get. Get obsessive about recruitment. Recruitment decisions will be the difference between you having an average business which is tied to you like a millstone or a great business that runs without you.
5. Work harder on yourself than you do on your business
I took 3 years to get a degree and a further 3 years to get my chartered accountants’ qualification. Do you know how long it took me to set up a business? About 15 minutes. To run a successful business you need knowledge and lots of it. Read like you have never read before, get a business coach, get mentors, you will need all the help you can get.
Your business success is not down to your business, it is down to you as the business owner. All your faults and shortcomings will be magnified over your business so work on your strengths and get people around you that can do things that you can’t.
Hope you find these tips useful! Here’s a link to Russell Smith’s website if you want to find out more – www.rsaccountancy.co.uk