While feeling a great sense of achievement you are beginning to feel frustrated by your business’ lack of growth. Your income from the business has not yet matched the salary from the last job you had and you’re putting in 12 hour days six days a week. You’ve also not had a holiday during the past two years. You’re tired and irritable when you get home.
This may be your fault. You are unable to let go and feel that you have to be at the business all the time. You may have become a workaholic. You should read my blog about this.
You may also feel that you cannot trust your staff do anything right. If you reflect on this you may realise that this does not say much for your choice of staff. If you continue like this it will be detrimental to your health and family relationships. You have to learn to delegate. After all your previous employer had trusted you to make fairly weighty decisions. Consider why they did this – and ask yourself why you can’t do the same.
A good manager needs to spend a large part of their time coaching staff – but you feel you have to spend all your time carrying out operational activities. This could mean that you have lost sight of the ‘bigger picture’ – the market in which your business operates and factors in the economic environment which could cause problems for your business.
Surely in your initial business plan there were predictions for growth – or was your business plan knocked out by an accountant friend who could prepare the financials. And you only had a business plan prepared because the bank had asked for one. It is quite likely that the bank gave you finance, not because of the business plan, but because you signed personal guarantees and you own property worth far in excess of any loan from the bank. You’re not alone in this – many entrepreneurs do this forgetting that the most important person the business plan is prepared for is themselves.
It is never too late to plan. For guidance see my blog on ‘Fundable Business Plans’.. Prepare a new business plan for yourself. It will, because of you past two years’ experience, be a useful guide to growing your business.
In addition you are now ready to consider doing a range of things in order to grow your business:
- See which of your customers are the most profitable. It may not be the biggest. Business owners take some comfort from big orders from big buyers. But these are usually at slim margins, they often take longer to pay and they have the power in the relationship. They also demand service out of proportion to the margins you are making on their business – their demands may make them unprofitable customers. Focus on profitable customers.
- By now you should know you customers well. Consider if you can meet more of their needs by taking on a range of products which complement those you already sell to them. As you are already making calls on them no additional selling expenses are incurred by you.
- Are you doing things that you could pay be others to do for you? I often come across business owners who are fiddling around trying to do their own bookkeeping. Surely you time is more valuable that what you would have to pay a bookkeeper. By doing things that could be done by others you are wasting time that could be used to see existing and potential customers – and so grow your business.
- It may be time to beef up you management team. If you are your business’ technical strength and you also do all of the selling you should consider hiring a sales person capable of growing your customer base and sales volumes – this will leave you free to focus on product development. If you are the marketing force you may need to hire someone with technical expertise to develop better and new products.
- Many entrepreneurs view the accounting function as a necessary evil. A growing business needs financial expertise. Get some on board.
- Are you really qualified to hire people or do you merely hire people you think you will get on with in your business? You need to seek expertise in this area.
When you prepare your new business plan you must allow for these costs. It may mean that you require extra funding. Growing businesses always need funding not only for additional costs (until additional profits fund them) but also to fund additional assets such as higher accounts receivables, inventories and equipment.
Your business plan is something you should review on a regular basis. This will enable you to modify it as you become aware of new factors within the market environment and within the business itself.
Be aware that the biggest challenge for you may be letting go – standing back so you can have a better view of your business as a whole.