“WIN A FREE BUSINESS BOOK” – GOLDEN RULES OF RUNNING A SUCCESSFUL BUSINESS
Starting and building a business is difficult, there’s no rule book and too often when you’re forging your own path, to find the right guidance can be a game of hit and miss.
The Australian Bureau of Statistics shows a horrific statistic for business failure. Let’s have a look at a few points around this.
People start their own business for various different reasons:
1. Some want to earn more money.
2. Others want to be their own boss.
3. Whilst others saw an opportunity.
4. Some lost their job and were forced into it.
5. And some thought working for themselves would give them more time to do the things they love, like fitting work around their family life.
Whatever reason we started our business, we are often faced with challenge after challenge and can be left wondering, “Is it all worth it?”
Having built Chan & Naylor from a home office into a National business with offices in nearly every State of Australia and more than 160 employees, with around 15,000 clients and more than $20 million in turnover, Chan & Naylor has gone through the various stages of a typical business life cycle.
In that 28 year journey I have also helped hundreds of businesses and after all those years of experience I believe all businesses have the following common challenges:
1. Cash-flow is tight in the beginning as you strive to find a ‘product to market’.
2. Once you’ve got the right product, you then need to find the right method to market it.
3. Once the business starts to scale there can be delivery problems with your product or quality challenges with scaling your service.
4. As sales and demand grow, your cash flow is stretched again as you need to hire more people. You start to realise that managing people and the operational side of a business is a full-time job and where will you find the time to sell.
5. As the team grows and you iron out the delivery issues, staff issues, cash-flow issues, growth plans and try to set a vision for the future, you realise you’re working harder and earning less ‘take home money’ than what you would have done if it was a lot smaller with a lot less staff.
6. At this stage you have to decide whether you should scale down or scale up the business.
7. Many scale down and retain control and earn more “take home money”.
8. However for many businesses it needs to reach a critical mass before its large enough to be more than a “job”. This requires the owner to constantly reinvest back into the business and for some they earn much less money than their employees for many years.
9. For others they may be able to get some finance from investors such as family or friends. For Start-ups Banks require them to be operating for a minimum of 3 years or more, and have real estate security before they would consider lending any money. But for most owners they have simply funded it by taking very little out of the business. A lot less than their employees and sometimes for many, many years.
10. Should you decide to grow the business into the next growth stage of your business life cycle than you have to understand how to manage people.
11. You have to evolve your skills from a GRINDER, to a MINDER.
12. For most people who run their own businesses they are natural FINDERS but they may have started doing both GRINDING and FINDING.
13. However for their business to grow they need to off load the Grinding as soon as possible and move into a Minder and Finder role.
14. Eventually they should only hold the Finder role and have the Grinding and Minding done by someone else.
15. Most people say to me “I wish I could find someone just like me”. That is the wrong way to think. You need to find someone who has complimentary skills and not the same skills. You want someone who can do the things that you are not good at to free you up to do only the things that you are extremely good at. It’s much more productive from an organisation point of view if everyone stayed in their “Flow” and everyone complimented each other skill wise.
16. It’s extremely rare for an individual to be good at all 3, the Grinding, Minding and Finding skills. Normally as a Start-up business you will need to do everything yourself, but it doesn’t necessarily mean that you are good at everything and even if you were one of these rare people who were good at everything, there is not enough hours in the day for you to do everything on your own. Normally you are extremely good at one and moderate at another and terrible at the third. So don’t find people just like you. Find people who compliment you and watch the productivity jump due to synergy of people working in a team complimenting each other. Leverage off each other.
17. The ultimate goal should be that of an Investor when the business runs by itself and pays you a dividend as an Investor.
18. Hence the journey from GRINDING to MINDING To FINDING to INVESTING can be achieved within ones business.
19. Some describe this this as the 4 Stages of the Business Life Cycle as;
(a) EMPLOYEE, “you work for your money” i.e. “You have a Job” namely your income stops when you stop working.
(b) SOLE TRADER, “You work for your money” i.e. “You Still Have a Job” namely your income still stops when you stop working.
(c) BUSINESS, “split between “working for your money and money working for you” you are still a prisoner of your business.
(d) INVESTMENT, “Your money working for you” and you now have “CHOICE” to do what you want, due to the “Passive Nature” of your income.
20. Most of the wealthier people in the world are in (c) and (d) but it’s extremely difficult to go from “SOLE TRADER” to “BUSINESS” and even more difficult to go from “BUSINESS” to “INVESTMENT”.
21. There many reasons why it’s difficult but by far the main reason is Attitude.
22. Some say “How can this be done”? and never give up trying and others say “This Can’t be Done”! and give up.
23. It’s not the challenges in life that defines us, but it’s how we respond to those challenges that define us.
24. Some people “look for problems” and others “look for Solutions”. If you look for problems you will find them but you will find successful people look for solutions and hence achieve results.
25. Some just like to be “Busy” but successful people like to “Produce Results”.
26. Our businesses and our lives are a reflection of our attitudes.
We have a “Chan & Naylor Business Advisory Service” that can assist you with growing and managing your business
P.S. For more detail of how to run and build a successful business, you can buy our book called “Small to Great” by Ed Chan and Dave Naylor.
“The client who can tell us their biggest challenge they faced in building their business and how they fixed it will get a free copy of ‘Small to Great” – send your entry to Mark Krywienko at email@example.com . The winning entry (judged by Ed Chan), will receive a FREE copy.
Good luck in building the life you deserve
(Non Executive Director & Co Founder of Chan & Naylor)
Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.