I like to work with owner managed businesses where trust, professionalism, service excellence and a high and repeat loyal customer base are must haves.
In the 15 years or so that I’ve been doing this work I’ve found that there are three chasms that businesses have to cross.
Let’s explore the challenges, the do's and the don’ts that are associated with these chasms.
Chasm 1 - Moving from Corporate Life to Running Your Own Business.
The first chasm is when you move from corporate life to being self-employed and let me tell you this is sizeable change.
Challenge 1: If you’ve got an idea for a service or a product, try and get somebody to pay for your product as soon as possible because that way you will begin to understand what it is that people buy, what they value and where there’s likely to be a market for what you have.
Don’t imagine that having made the sale that the money is miraculously going to turn up in your bank account like your corporate salary on the 29th of every month. You’re going to have to chase the money in all probability so you need to be really, really focused on managing your cash flow.
Challenge 2: The second challenge is understanding how to use your time well. A lot of people tell me that they didn’t realise how much has to be done and how little time there is when they start to run their own business.
So keep a diary and understand how you are spending your time and make sure it has a direct relationship between the performance and success of your business. Don’t waste time, make time doing the right things well. Being busy is not enough; you need to be doing things that contribute to the overall success of your business.
Challenge 3: The third challenge is getting a network of support around you. Actually running your own business is quite a lonely enterprise so you’ll need to rely on family, friends and a professional network, people like myself who coaches and mentors to give you that support.
Don’t imagine you’ll know everything you won’t, so don’t be too proud to reach out and get support, there’s plenty out there and people are more than willing to give it.
If you have time do have a look at Steven Covey's book on The 7 Habits of Highly Effective People.
Chasm 2 - Growing Your Business Quickly and Profitably
So now for the second challenge, you’ve established your business, you’ve been going say for two or three years and let me tell you that you’ve done really well because two out of three businesses fail within the first two to three years.
Challenge 1: So you now want to generate profitable growth and a lot of companies find as they grow their turnover the profit actually goes down and that’s because they are probably carrying a lot of customers in their customer base where the returns one way or another are not worth having.
So as you build your turnover make sure you do it profitably and have a look at delisting some of those customers who destroys the value. There is a saying that turnover is vanity profit is sanity.
Challenge 2: Building your team you’ll want to get now and the people around you that will help you grow the business and become a more properly structured business.
Recruiting, you’ve probably had some experience of this, is quite a tiresome process and fraught with danger so do take time, be clear about what you want people to do for you and slot them in, look at flexible employment contracts so that you can let them go or they can go at their own accord if there’s not a good fit. Remember that a badly recruited employee can have a really toxic effect on your business.
Challenge 3: Up until now you’ve been a business and the business has been you but you’re going to let things go, you’re going to have to delegate and be more hands out than hands in., you’re going to have to invest in processes and you’re going to need to build a team around you who can contribute to the growth of the business as well.
If you don’t know how to do that you’ll become pot bound. So do keep an eye on key performance indicators but do give people space in which to do their own thing.
Chasm 3 - Exiting Your Business
You’re thinking now about exiting the business, you’ve achieved your goals, you’ve achieved your dream, you want a better work/life balance, you want to perhaps do something different people who run businesses do get bored and like a change of scenery.
Challenge 1: The first challenge you’re going to have is finding out what the value of your business is and, if as we spoke about earlier, you started with the end in mind then you’ll have been investing in things that have value like brand, like a good customer base, like a niche market, like a good range of products themselves, process and intellectual property. Don’t take the first offer think about what you want from the business but don’t be stubborn either about what the value is.
Challenge 2: The second challenge is to find some good advisors. It really helps if you like them because they’re going to be around for some time so find some people you trust and you can get on well with.
They’ll be wearing different glasses of course, so they’ll have a different perception about the value of your business than you do but don’t procrastinate, get to a good conclusion and when the time is right make sure you’ve got some choices and options and don’t let people hold a gun to your head.
Challenge 3: The third challenge will be an emotional one, losing your baby. You built this business, you’ve taken time, you’ve put a lot of sweat into it I guess and now you’re letting it go. Take time to reflect, think about what’s gone well, what hasn’t gone so well, what part of it you’ve really enjoyed because you might want to take that forward into your next chapter. Talk to your friends and family they’re usually good observers of what makes you happy, what makes you tick. It’s a time of change yes but change is good because it presents challenge and challenges keep us all going.
I’d be very interested for research purposes in hearing what your experience has been