Taking the small business leap
Almost everybody has had an idea for a small business at some point in their life.
But ask people if they’ve actually stoked that ember, developed the idea and turned it into a profitable enterprise and those numbers drop away very quickly.
The barriers stopping most people from taking the plunge are sometimes daunting and usually scary. There’s both a financial and emotional commitment as well as a significant investment of time.
Business coach Wayne Gillan, from Excel Coaching, has a few key pieces of advice to help make your dream a reality and to ensure you’re prepared for anything that might eventuate.
You need to love what you’re doing or it’ll be too easy to pull up stumps as soon as things get tough.
The most successful small business start-ups, Gillan says, are passionate about what they’re entering into.
“They need to have a dream that’s bigger than them. Some people do it out of spite, if you like. They’re working for an idiot and they don’t want to work for an idiot anymore, so they say ‘well I’ll go and do this myself’,” he says.
“Those that tend to grow and be a bit more successful have a passion around doing something.”
Like it or not, there’s one skill that every small business owner will eventually realise is almost as important as his or her chosen trade. It’s salesmanship, and you need to master it. Quickly.
Started a plumbing business? You’re now a salesperson. Launched a yoga centre? You’re now a salesperson.
Gillan says that to give your business the best chance of success, you need to put yourself in front of as many people as possible.
If you want to be a small business owner – you need to master salesmanship.
“You’ve got to learn the art of proactivity. It ain’t just going to come to you,” he says.
“If you’re waiting for that word of mouth to come along, well that’s nice. But you’ve usually got to have a level of success before that becomes real.”
“Sales is a real skill, it’s not something you’re born with. You need to learn to understand your market. Who appreciates what I do the best? And how can I do it better than my competitors?”
Know it, plant it
Gillan says that taking time to create a business plan can be valuable not just because you’ll then have some clear goals and targets on paper, but because it ensures you’ve taken the time to think the important things through.
“Working out how much money you need is important. Setting some targets is important so you know what it takes to break even or turn a profit,” he says.
“What you actually write down doesn’t matter as much as the thought process you go through.”
Digital savvy: 3 must-have tech assets for your small business
Take the knocks
One of the hardest parts of turning your brilliant idea into a profitable business is understanding that not everyone will love it as much as you do.
A very small percentage of the people who see your product or service will actually buy or use it, so expect to receive a few sobering reality checks along the way.
Business owners need to develop a thick skin.
“You’ve got to be persistent. You’ve got to develop that thick skin. You come up with a sensational idea and you pitch it and you get ‘no thanks’. You never, ever give up,” Gillan says.
Find the right people
We’ve all got that uncle or family friend who’s full of worldly advice, but are they really the best person to be basing your important financial decisions on?
Seek out people who’ve been in your position and made it work, as they’ll be better placed to spot any potential pitfalls in your plans and steer you on the path to success.
“Start hanging around with business owners. The worst advice you can get is the free advice from family and friends. They think they’re helping but often they haven’t got the knowledge,” Gillan says.
“My advice is to seek a professional mentor and an outsider’s perspective. Get some outside input and test your ideas.”
Real people: Humanising the workplace
Crunch the numbers
One of the most challenging parts of moving into self-employment is the cash flow – or lack of it. Can your wallet handle it if a client or customer doesn’t pay for months at a time? Will you have enough in the kitty to cover your costs while stock sits unsold in a shop?
“Most businesses need some level of working capital. If you run a products business, just imagine what it’s like: you’ve got to go and buy an initial order, you’ve got to put it in your warehouse, you’ve got to sit on that until it’s sold, and then you’ve got to ship it out to someone,” Gillan says.
“At the end of the month, or probably up to two months away, you’ll get paid. That’s the working capital requirement and that can impact how fast you can grow.
“Test to see whether it’s a viable business model and see if there’s demand for it to cover your requirements. Work out the resources you need to make that happen, why people would come to you and who your target market is.
Go figure: 7 steps to creating a business budget