The following article was written for & published in the Verve Magazine – May 2019. In it, I talk about the things that I have learnt about running a business that is profitable, sustainable & that you love… They didn’t publish the full article, so I am sharing it below…
Running a successful business can be hugely rewarding & when you get it right, it can fulfil all of your dreams, both professionally & personally.
That said, going into business & maintaining a sustainable & profitable business can sometimes be tough. In NZ, up to half of our small businesses fail within the first 2 years.
There’s a good reason why some businesses fail, in fact I would argue that some should never have even started. However there are also some great business opportunities out there that can truly feed your passion & your brilliance, that can allow you to create a business & a life that you love.
Every Business Coach will tell you that you need a plan & I whole-heartedly agree with that, however without the following a plan is next to useless:
1. Know your why & follow your passion
Businesses that are started because people have ‘making money’ as their prime objective, often fail. This because when times get tough, there is little that will keep you in the business.
If you are clear about your reason for starting your business & you know your ‘why’ & what you are passionate about, then you stand a much better chance of success. When the tough times come, and they will, you can reconnect to this reason for being on the plant & what you are passionate about & it will see you through the tough times.
If you’re unclear about your why, then I would recommend getting some help to work through this & what your core values are as these will drive the business throughout its entire life.
2. Don’t listen to friends & family
I feel terrible saying this, however friends & family are too close to be taking advice from.
They want to be supportive & they want to see you succeed, so will be encouraging regardless of whether it’s a good idea or a good business model.
Or if they come from a traditional background they may be hugely critical about you going into business & might have comments such as, “When are you going to get a real job?”.
Remember that these comments come from their own fears so don’t dismiss them but do take what they say with a grain of salt & instead rely on actual market information to make your decisions.
3. Know your market & know your audience
Again, don’t rely on those too close to you to test or validate your idea.
Define who your ideal customer is, put yourself in their shoes & think about what ‘pain’ you are relieving or what ‘solution’ you are providing for them & come up with some assumptions about what they might want or need.
Then you need to test your assumptions with people who meet the criteria & are not too close to you.
In my experience, if you do these surveys face to face you learn a lot more from the experience than you would using software like survey monkey. When you are in front of someone having a real conversation you can delve deeper & uncover all sorts of things you might not have thought of.
I have worked with clients who after doing their market validation have a whole new insight into what they can offer to their clients.
Market Validation is also not a ‘one-off’ thing.
Things change so fast in the business world & there are new competitors, both direct & indirect, coming into the market all the time, so in my experience, regularly looking for customer feedback is crucial. Continuously testing the market to ensure that you are delivering what they truly want & need, at a price that is right for the value you offer will help you to stay ahead of the game.
4. Be prepared to Pivot or Fail Fast
Sometimes your idea might not be a great idea. I hate to say it, because I hate shattering dreams but sometimes you have to be cruel to be kind. There may not be a genuine need for it or people might not be prepared to pay what you need to charge to make it a profitable & sustainable business.
Don’t be concerned by this & please don’t hang onto the idea. If the market says or shows it’s not prepared to put their hands in their pocket & pay you what you know the value is, then be prepared to pivot or fail fast.
Pivoting is where you change the idea based on feedback, much like taking a different route to get to the same place.
Fail fast is not a negative, in fact it is quite the opposite. I have seen too many businesses, my own past businesses included, where the owner has poured their life savings & a huge amount of time & effort into an idea that was never going to work. Imagine if you could catch that early, put the idea to bed & not lose your house or your sanity over it?
Pivoting can happen at any stage in a business & generally happens following market validation. As your business grows, what you started offering may not be what customers now want, so continue with market validation throughout your business’ life & make changes as needed so that you can continue to pivot or pull out as needed.
I truly wish more businesses would pivot or fail fast rather than hanging onto an idea that they think is great but that no-one really wants or is prepared to pay for. The sooner you can let it go, the sooner you can move onto the next idea, that might be successful!
5. Ask for help
This may seem contrary to my previous idea of not asking friends & family so I want to be clear that I think that asking for help is essential, it’s just about asking the right people for the right sort of help.
As Entrepreneurs & Business Owners, we often don’t want to ask for help as it can feel like failure.
Asking for help is not failing. It’s a smart way to not be ‘alone’ in your business venture & to get some advice that may take you to the next level.
I ask you this. How do you feel when you help someone? It feels great right? So, why would you deny this feeling to someone else who may be able to help you?
Taking on board a coach, a mentor or someone to be a sounding board can be a great idea.
All I would suggest is asking the right people & not asking too many people, because everyone has different ideas & it can be confusing. Look for experts or people who have been in your position in the past and can share with you their experiences & what they learnt from that rather than telling you what to do.
6. Make sure you have the right commercial model
One of the biggest mistakes that I see time & time again is Business Owners in NZ not charging a fair price for a fair value. People often undervalue themselves & their product or service.
Price is not everything. If it were we’d all be using no frills toothpaste & driving Skodas. Not that I don’t love Skodas – they’re great cars but they’re not for everyone & I personally like my Porsche 🙂
Be sure that you understand what value you offer to your customer, what it costs to provide this value & what they are prepared to pay for it. It doesn’t have to be an equation of costs of goods plus a profit margin. If you can value price then you stand a much better chance of success.
Also, be sure that you know what capital is required to set up & run your business at all times & plan for it. Get funding help early on, before you need it. For all of us who have worked with banks in our business, we know that it’s harder to get money when you desperately need it than when you didn’t need it, so apply for it early.
7. Choose your business partners carefully
This is a lesson I have learnt a couple of times through my own experience & through working with clients.
Going into business with someone is like getting married or choosing a life partner. You will be together for a long time. There will be ups & there will be downs & there will be times when you just don’t agree on things or feel like you’re heading in different directions. You will also spend a huge amount of your time together, sometimes more than you do with your own family & we all know how families can fight!
There’s nothing wrong with this & if you have chosen the right partner, with the same fundamental values & vision as you, then you will be able to work through these & come out the other side richer for the experience.
My advice is to choose a business partner like you would a life partner. You wouldn’t rush into a marriage or life-time commitment. You’d probably date for a while, get to know each other, talk about shared visons & values & then, and only then, would you decide to enter into a longer term commitment.
Often in business, I guess a little like dating, we get excited when we meet a new person who seems to share our vision & ideas. They might also seem to bring something to the table that you might not have, such as knowledge, connections or money. And all of this can be great. However, if they don’t share the same fundamental values as you, then you could well hit a rock wall at some stage.
Take the time to get to know your potential business partner, spend time with them without the commitment of a partnership (there are many ways to do this) & talk about vision & values. Go through some difficult times together & then once you’ve ‘dated’ for a while then go through the process of writing up a ‘pre-nup’, otherwise known as a Shareholders Agreement & some guidelines for how you will run the business & what your values mean for you & then think about tying the knot. This process in itself will help you to get to really know the potential partner.
No-one likes a messy divorce, so all of this can help create a happy marriage.
8. Be True to yourself
This is your journey & your journey alone. You can get help & advice along the way & all of this can be helpful, however if you are trying to build your business the way that others think you should then you are going to struggle.
Every one of us has great intuition. We know what is right & what is right for us.
Listen to this & make sure that you are owning the journey that you are on & are following your passion & working with your brilliance, not trying to be someone else.
9. Let go of self-limiting beliefs
We all have them. That voice in our head that tells us we can’t do it, or asks us who do we think we are to be doing this, or just generally stops us from having big dreams.
My advice is to find out what these self-limiting beliefs are & work to just ‘Let them go’.
As humans, we are capable of doing anything that we set our mind to.
Work with someone to ensure that your self-limiting beliefs are not holding you back from creating the business & life that you deserve.
10. Have fun!
Life is too short! Make sure you take time to have some fun along the way – whatever that might be for you. Studies show that when we take time out to play & be creative, we give our brain the space to be open to more opportunities. This can lead to more creative & focused thinking.
Plus, who doesn’t enjoy being a big kid every once in a while?
Debra Chantry is an Entrepreneurial Business & Leadership Coach & also the Founder of The Common, which is a Business Club / Community / Playground that enables Business Owners & Entrepreneurs to achieve their professional & personal goals. Ventell, her business coaching practice, has been running successfully for 8 years & has helped over 500 business owners. The Common turns two on the 1st May 2019.