Has your business hit a barrier which you just can’t seem to break through?  Are you thinking of starting your own business and want to know how to be successful? Do you know someone who started their own business and it kind of, went nowhere?  If you want to know the secret to making your business a success then this video is for you.  I’m going to share with you the secrets you need to make sure you break through that ceiling or start off on the right foot and give yourself the kind of freedom lifestyle you see on Instagram. 

If you believe the current statistics, a whopping 20% of businesses will fail in their first year and if you survive those first 12 precarious months, 60% will fail in 3 years.  This means that roughly only 40% survive.  So what is it that they do, that others don’t which means they reach that illusive 40% club?

I’m in the privileged position where I not only run my own business, but I get to help and advise others on the running of theirs.  I can say hand on heart, that whilst there are some common themes amongst the successful 40%, they have each trodden their own path and had their own experiences.  For every business-owner, it is a unique journey full of trial and error, tough times, creative thinking, fun and enjoyment. 

I am sharing with you today the more common things businesses do to create their success

The most focused business owners will start with a strategy or vision in mind.  This article from Forbes proposes the vision to be the “What, Where or Who” of the business.  

This article from Harvard Business Review goes on to explain that the vision provides motivation through inspiration and is a key element in “why people should get excited about this”.  It should provide an “inspiring portrait of what it will look and feel like to achieve the organisation’s mission and goals”.

To my mind, the vision will change as you evolve as a leader and business owner, it will continue to morph as you discover what works and what doesn’t and it will adapt as the goals you have for your business change and grow.  For me personally, I find the vision comes before the strategy.  Afterall, without the vision, how can we create a strategy which will get us there?

Strategy is a lot more tangible than vision and to me, is the “how” of how you achieve the vision. However, don’t just take my word for it, in this article Harvard Business School defines business strategy as being “the initiatives a company pursues to create value for the organisation and it’s stakeholders”

A strategy can be broken down into 2 camps: long-term strategy and short-term strategy.  I think of short-term strategies as being the rungs on a ladder with the overall long-term-strategy the end-goal which is our vision.

You need to be crystal clear about your vision otherwise, the strategy will become scattered and you’ll be susceptible to distraction or as I like to think of it you’ll have “the next shiny object syndrome”.  Ultimately it means that achieving your vision becomes that much harder.  Look, I find clients often need some help in this area.  They will often have a bit of an idea around what they want their vision to be, but it’s unlikely to be clear enough to create a strategy out of. When we start working with a client on this, we’ll often spend somewhere around a full day becoming crystal clear on the vision and the long-term strategy.  From here we can help them create the short-term strategies to achieve their goals.

For example, you might have a vision which says you want to become largest architectural firm in your area.  What revenue does that mean you want? What lifestyle will it give you? Who will you employ in the firm? What type of work will you be designing? You need to really feel this vision, it is after all a vision.  The long term strategy we would create from here would be around how we would achieve that vision, so we would be generating $20 million a year in turnover by designing bespoke residential and commercial properties for developers.  Then from here, we would create the short-term strategies needed to achieve this.

Once a business has really clarified it’s vision and strategy, it will change it’s attention to the market it operates in.  It seeks to understand that market in such great detail that it will know what the market wants before the market does itself. It’s about knowing their likes, dislikes, what they want from your product, what they are prepared to pay for it, what they aren’t, what they value, what they don’t, what their favourite colour is, how many children they have, are they married?  The more you know about your market, the easier it is to give them what they want which is what makes you money.  

Again, this is where many clients struggle and funnily enough the reason in many cases is shyness, or to put a more modern parlance on it: fear.  They are afraid to ask.  Afraid to look stupid, afraid of what they might be told, simply too shy to stand and ask a bunch of strangers what they think about a particular topic.  Nobody said this journey was going to be easy, and sometimes we have to push ourselves to take that extra step that nobody else will so we can be that extra step ahead.  Generally speaking people are gratified to be asked more so than they are annoyed, so ask away.

Before I go into the next thing which a business does to be successful, if you have learned 1 useful thing in this video, perhaps you would consider heading over and giving it a thumbs up, if you learned 2 useful things, perhaps you would consider hitting the subscribe button and supporting small channels like this one to continue to make useful content for you all.

At this point a successful business will start to turn their thoughts to the finances.  This is a several pronged attack.  They will look at what they need to be running the business including any set-up costs, research and development, proposed marketing spend, their break-even point, profit margin, and return on investment. They will also look at their pricing that is, what they are going to charge their clients in order to achieve the profit, revenue goals and return on investment they have calculated.  Lastly they will look at the physical practicality of managing their finances, so this boils down to cashflow management and how they’re going to make sure they have enough cash at their disposal to do what they want to be doing.

We are frequently called in at this stage to help with modelling and by that I mean, we are called in to help run different scenarios to see what the result comes out as.  This gives them the information they need to make fundamental decisions around their business.  It also helps a more mature business to decide what they want to be doing next. 

We are less often called in to help with cashflow management until there is a problem, however, this is what I do in my business to make sure we never have a shortfall:  we have several different bank accounts which are used for different things.  For example, we have an Income account which receives all the fees from clients.  From here we transfer GST to a tax account then allocate a set percentage out to Owners Compensation and Profit accounts, a percentage goes into the tax account PAYG and super go to the tax account and the remaining amount goes into an Operating Expenses account.  We have 5 accounts in total to manage cashflow.  It works, and guarantees we make a profit each year.

A successful business will focus on customer service above and beyond anything else.  They understand that without their clients or customers they are nothing.  Listen to them, ask for their feedback and listen to what they have to say.  Understand their expectations and strive to exceed them.  Pretty simple, but overlooked more often than you realise.

Marketing strategically is important – getting your message in the right way and to the right people will skyrocket your growth and earning potential without wasting your time with people who are not the right fit for your business.

The last word I have today is around being resilient.  Being in business for yourself can be tremendously rewarding, but it is also a lonely journey which takes a serious amount of time and effort.  Being persistent and keeping focussed on the vision and end goal will keep you going during the difficult times which teach us the best lessons out there.  Thankyou for watching and I’ll leave you with this video to watch next and I’ll catch you in the next one.

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