What's in this article
What's in this article
Running a business is challenging, there are plenty of competitors out there and you will encounter many challenges along the way such as winning customers managing cash flow, paying suppliers and marketing your services.
In this article, I will share some other things I have learned over the past seven years of running my business.
We learn from our mistakes, so as long as they are not so catastrophic that they are fatal to you business, you can learn from your mistakes and emerge triumpant, taking your business to new levels over time.
It's tempting, especially when you are starting out, to take on all work that comes your way, even if it is something new but similar to what you normally do.
The trouble is, this can often be a recipe for disaster. Although it is nice to learn new things, you need to carefully consider how much of the job you need to learn and how likely you are to complete the job and actually make a decent profit out of your time.
Learning on the job is often not ideal. You are being paid to deliver good results in a reasonable amount of time and then afterwards to support that, whether you are delivering a service or a product.
You can't do everything and no one knows everything. Sometimes sticking to what you know is going to make your life much easier and more rewarding.
If you give more than you take, people will appreciate this. Obviously don't sabotage your business by doing too much free work, but by giving a bit more, the rewards will follow. Clients will stay, knowing they are in good hands and that you are dedicated to genuinely helping them.
Sometimes I encounter those who are mainly focused on growing their own business. This is a commendable goal but remember to treat clients in the right way, not just pushing them to be compatible with the businesses' vision and procedures. When an entrepreneur is too focused on growth, this can come across badly.
Does a project not "feel right"? Is it a nagging feeling or is something wrong and you know in the back of your mind that something might be about to go wrong? Maybe it started out ok, but if a client is a bad fit for you or your business, it may be time to say goodbye for both of your sakes.
It takes courage to admit when something isn't working, but the fact is, all people are different and we don't necessarily get along and business arrangements don't necessarily work out.
If you've heard of the 80/20 rule it goes something like this: About 80% of your sales come from 20% of your customers. With that in mind, you don't really want to get stuck with a client that saps all your time and you are making very little profit from.
It's quite well known that winning new clients is much harder than reselling to existing clients. With this in mind it is essential to look after your existing clients to keep them happy so they want to come back and buy from you time and time again.
If you keep losing your current clients, you will have to rely on getting new clients all the time. This is gonna limit business growth and profits and you're unlikely to build up lots of positive feedback such as reviews.
Acquiring a new customer can cost five times more than retaining an existing customer...The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
It takes time to build up a business. Rarely do people make instant decisions to buy (at least in my experience), so you need to be patient when courting new prospects. Give potential clients all the facts, don't try to pressure them into a sale and they will make their mind up in time.
Sometimes work may not come from a new contact immediately. However, if you make a good impression, people may come back to you in the future. If you plant a seed, it will grow!
You won't always have ideas flowing like an unstoppable power. When you have great ideas, get them down on paper. I find focusing my energy on ideas and tricky problems first thing in the morning is the best time for me.
Sometimes ideas can come at inconvenient times like when you're trying to sleep or on a Sunday. This could be because you have cleared you head, rested and are becoming active again. Make a note, even if it's really basic and sketchy and come back to it when you have more time.
People trust their friends and family so if they are referred to you, it is the most low cost, easy to convert lead you'll probably ever have. Personal recommendations are sooooo strong.
If you are selling physical goods, then social media can be a really strong way of getting referrals from reviews and experiences. 55% of people share their new purchases on a social network.
If friends approve of your products or services, then you have more chance of selling it to someone.
According to referral marketing stats, 86% of B2B companies with a referral program experience growth.
It's amazing how fast your bank balance can take a dive and if you overspend or don't get the money in quick enough. Cash flow can be your enemy, you could be struggling to pay your suppliers, yet waiting for thousands to "come in". However, keep plenty of cash and it'll never be a problem!
According to smeloans.co.uk, 78% of UK SMEs that are owed money are being forced to wait at least one month beyond their agreement terms before being paid.
Imagine you finally land that large client of your dreams. You do a load of work, they are happy, then you put your invoice in. You may be surprised how long it takes to get it paid. Often larger businesses are the slowest to pay.
So keep back plenty of cash to tie you over whilst you are waiting for your clients to pay you. There are finance options available to help with cashflow if you need them and you decide you want to go that route.
Business is a journey of learning and understanding and you'll make many mistakes along the way, I know I have. That's ok, you'll learn from them and your business will be stronger in the future!
How do toddlers learn to walk? They start crawling, then they can stand for a second. Finally they can stand for long enough to take a first step and fall down again. But they keep trying. It's the same in business, a lot of the time success is not certain, you have to keep trying things to find out what works.
I follow Theo Paphitis (who is an inspiration) on LinkedIn and here is what he says:
We like to focus on "the sale", getting the immediate project that your lead is interested in. But what happens after that? What support do they need and for how long? It's essential to set a clear time limit if support is covered under the original price, because over time that ongoing support will erode your original profits. Does your terms and conditions stipulate the guarantee period for the work, how can you look after the clients after that?
We got this a bit wrong at times, but we've learned and that's why we now offer Website Warranties to keep client websites proactively maintained, rather than just leaving websites to get older, with the potential that they won't get updated when they need to.
The support plans we offer are a win win for both us and the client. Clients can relax knowing their website is being looked after on a monthly basis and we are happy because we know we are getting paid.
How does customer support look to your organisation? If you use a warranty or guarantee, do you have a system in place to extend that at extra cost? Or does the product or service slip into unsupported territory?
I don't think everyone will agree with this, but we survived Covid with our diverse client base, but we heard about countless larger businesses who didn't because they specialised in one particular area, like live events.
Thankfully a lot of events businesses have come out the other side, but it's a reminder that relying on one particular market can lead to a lot more uncertainty when things go from good to bad. The housing crash of 2007 also affected a lot of businesses in the property sector, sometimes resulting in catastrophe.
Of course the answer is not to try and do everything. Then you are a master of none. However, if you find you are relying on just one or two clients for most of your revenue, it should set alarm bells ringing unless you have a solid backup plan.
Some clients enjoy low competition, but for most of us it's 100 times harder than you can imagine! But if you love what you are doing then you will do well and think nothing of going from a 9 till 5 to 12-14 hour days to make it a success.
I don't dread Monday mornings, I am genuinely happy to get back to the office and work on my dream.
16 August 2022
03 August 2022
14 July 2022
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