Nine tips and techniques for small business success
For years you’ve been harbouring a secret (or not so secret) desire to start a business. What’s stopping you? Why are you an employee rather than an employer? Possibly it’s because you’ve heard too many scary start-up stories or had too many ‘how to start a business’ lectures fired at you across the barbecue.
The trick with stories and advice is to separate the helpful stuff from the unhelpful stuff.
There is no perfect formula for getting going in business; you need to work out what will work best for you.
To get you going with your plans, here’s a series of proven tips and techniques that you may not have heard before.
1. Stop making excuses
Thousands of Kiwis dream of becoming entrepreneurs, but they never quite get around to it. Instead of thinking of all the reasons why they should start a business, they think of all the reasons why they can’t.
While becoming your own boss comes with a degree of fear and foreboding, it also comes with some very wonderful feelings – like a sense of control over your own destiny. So when you find yourself making another excuse about why you shouldn’t work for yourself, flip it around and think of a reason why you should. Excuses stand between you and your goal. Don’t let them.
2. Bounce ideas
Use friends and family like a business idea squash court. Bounce ideas at them and read their response. If they respond positively, make sure they’re not just trying to be nice. Ask for honesty. And when they respond negatively, don’t be defensive. Take every comment or suggestion on board, write it down and call it research.
Even once your business is up and running, it’s smart to bounce ideas for new products, services or customer experience improvements past people who are in your target audience. These people don’t have to be friends and family; they can be customers or potential customers.
If you’ve invested in the services of a business mentor or coach, listen carefully to their advice. These people know first-hand what works and they’ve survived multiple business mistakes.
3. Build your business around a problem
Instead of building your business around what you want to do or make, try to build it around a known problem that could be solved by your skills and/or knowledge. Problems are always the best foundation for a successful business launch.
Let’s say you’re an avid book reader and you’re thinking of starting a book shop. What problems could you solve? The most obvious one is ‘finding a really good book that I can’t put down’. If you build your business around solving this problem somehow, by how you choose stock or arrange your shelves, then your business has a fighting chance.
Or maybe you’re a corporate project manager who wants to go it alone. What challenges can you help with? You might need to do some research to identify a pain point, like fear of budget blowouts or the danger of missing the deadline, but once you’ve identified the perfect problem platform you’ll be away laughing.
4. Start simple
Keep your start-up relatively straightforward, because you can always add more products or services later. This tip targets the very human ability to make things more complicated than they need to be. If you let your business idea snowball into a blizzard, you’ll never get it off the ground.
A good way to plan your first few years is with a staged approach. Stage one is the core of your business; you’ll stay at this stage until it’s working. Stage two can introduce growth initiatives, one at a time. And so on.
Keeping your start-up as simple as possible is important if you’re testing the waters with something really innovative. You don’t want to pour huge amounts of money and time into an untested idea. Limit your business plan to essential features only. The ‘nice to haves’ can come later.
5. Do the dollars
Starting business is a bit like planning a house renovation. You need to cost it up, then double it (at least). There will always be more costs than you can imagine.
Expenses could include rent, materials, staff, marketing, vehicles, fuel, utilities, furniture and equipment, insurance. Go over every aspect of the set-up stage and first few months of operation. Capture the requirements and cost them up.
You also need to think about your personal expenses, like home loans, rent, food and all the other things that keep your life ticking over.
Once you have a clear financial picture of the way forward, think about how you’re going to find the money. Do you need a loan? Do you want to invite investors into your business? Do you need to find another income source until your business is paying its way?
6. Be prepared to live lean
Not all new businesses succeed, in fact many won't make it past the first few years. But many of the people who fail with their first attempt go on to become successful business owners in the future. Why? Because from failure they learn what’s required for success.
Sometimes the difference between failure and success is time. That’s why you need to imagine life with no income for quite a number of weeks (or months) while you’re getting the business up and running. The longer you can stretch things out, the more time you will have to get your business heading in the right direction.
Plan for a worst-case scenario. It could mean renting the house out and moving in with family or living above your business premises. Holidays, new clothes and restaurant meals might also have to be shelved while you’re in start-up mode.
7. Don’t quit your day job
Transitioning from employee to entrepreneur can’t always be achieved overnight. With all the facts on hand, it might be obvious that you can’t give up your day job until your business is bringing in some cash.
However, this does rather depend on the type of business you’re starting. If it’s an online business or a service you can provide after hours (like cleaning), then keeping your nine to five job could be perfectly feasible. But if you’re staring a bathroom renovation business and you plan to be hands-on with the tools, you’ll have to wave goodbye to your employer.
Another approach could be to run your new business during regular business hours, then supplement your income with an after-hours job, like stacking shelves at the local supermarket. Starting a business always requires some sacrifice; sometimes that sacrifice is leisure time and sleep.
8. Become a shameless self-promoter
To be successful in business, you need to be prepared to blow your own trumpet. That means having your ‘elevator pitch’ sorted, so that you can explain your business in 30 seconds or less whenever anybody asks. It also means grabbing every opportunity for promotion, especially those that don’t cost a lot.
If you’re worried about being perceived as arrogant or a bit loud, get over it. If you can’t talk to people one-to-one about the value of your business, you’re not made of the right stuff to be an entrepreneur. Self-promotion is an important business skill.
It’s possible you’ll need some help to become a confident speaker and sales person. Joining a small business networking group, like BNI New Zealand, can do wonders for your self-promotional abilities. Every session gives you practice at explaining your business and the problems it solves. You’ll also make friends and influence people, which is definitely a good thing.
Another approach is the ‘fake it ‘til you make it’ strategy, where you pretend to be confident. However, “The Confidence Code,” authors Katty Kay and Claire Shipman say that’s not a smart idea. “Confidence isn’t about pretending or putting on an act,” they write. “Confidence springs from genuine accomplishment and work.”
9. Stay on the right side of the law
Whatever your business involves, you’ll need to be familiar with the ins and outs of the Fair Trading Act, the Health & Safety Act and the Consumer Guarantees Act. While there are consultants who can help you to understand these laws, they cost money. Instead, you can go online and start learning. The IRD site, for example, is good at explaining tax things in straightforward language. There are also government sites about consumer protection and employee safety. Another handy resource is the New Zealand Law Society’s ‘Going into business’ guide.
Another important educational exercise involves learning about financial reporting, paying tax and registering a company. For these sorts of things, it’s likely you’ll need the help of an accountant. Ask around for referrals or search ‘chartered accountants near me’. Always enquire about their fee structure before you commit - accounting services can be surprisingly expensive. From the start, it’s smart to learn how to use an online accounting platform like Xero, to minimise the work your accountant needs to do.