What’s Stopping Small Businesses?
According to the Office for National Statistics, the UK economy grew by 1.9% in 2013; its strongest rate since 2007. And it is not just in our illustrious capital where these figures ring true; in the third quarter alone in Rutland, 38 new companies were registered . Great news, our rural economy is emerging from the mist of the recession and is coming out fighting! But is it? We cannot look at growth figures without also casting a glance over the number of companies that were dissolved last year; a total of 23 between July and September alone in Rutland. So why are some businesses going from strength to strength whilst others are shutting up shop?
There are countless books, articles, blogs and courses out there which endeavour to show you exactly what is wrong with your business. But let us be realistic, do you have enough time in the day to read the abundance of literature on the subject? I thought not. Therefore you will be pleased to know that I have done a lot of the leg work for you. As part of our company’s culture, we encourage our team to read an extensive library on a wide range of business and finance related texts. (I get paid to read, every English graduates dream job!) When it comes to business growth, there seems to be three common problems which have emerged; stagnation, not knowing your customer and cash-flow. So how can you impact upon these areas and successfully grow your business?
Stagnation, or rather, getting too comfortable. Changes and developments in the modern working world are something that every business owner needs to embrace and contribute towards. But this is quite a scary thought. As human beings, doing what we know and trust is in our nature. This is fine, along as you do not let you company become ‘fat’ with contentment. Continual development is vital to keep our ‘working muscles’ limber and means that your company will win the business race.
There is a great, and very short, book on this exact topic called ‘Who Moved My Cheese?’, which I would recommend to anyone in business. This light hearted text teaches you to embrace new technologies and advancements (i.e. new social mediums and new, innovative concepts), emphasises the importance of monitoring change, ‘smell the cheese often to know if it’s getting old’, and to anticipate change. You will also discover how to develop a positive attitude, so that hard work and setbacks cannot deter you. To avoid stagnation, it is important to get your whole team on board, through a company culture that encourages continual development.
Knowing Your Customer. This may seem like a very basic concept, but so many businesses get this wrong. Your customers are your business, so ensuring that they feel valued can be ‘make or break’ for your company. Take the time to get to know them; find out why they do business with you, what they love about you and what they think could be improved. Developing this rapport will build trust, which in turn, will transform a customer into a life-long fan of your business. Neglect your customers, and you will destroy your business.
But knowing your customer is more than just this. Once you understand your customers or clients, it is important to keep surprising them and superseding their expectations. This is partially rooted in continual innovation, i.e. preventing stagnation, but there is also a creative element involved. In Jantsch’s ‘The Referral Engine’ (a fantastic book that will significantly reduce your marketing costs), I read a wonderful account of the experience of a lady who bought a coat; quite a mundane act, that was injected with something extra special. Said lady chose her coat, paid and left the shop. A few days later she reached into the pocket of her new coat and found a tiny envelope, with a hand written note inside which read ‘You are a goddess’! A simple piece of paper, with four words written on it, made this woman’s day. So much so, she is now a loyal fan of the coat designer and never buys her coats from anyone else. Certainly food for thought!
Cash Flow. A reality of business is that it takes money to make money. But you do not always need mountains of cash stockpiled in your private vault to grow. The most important thing you can do to impact your cash-flow is to plan. Start by creating a financial strategy, which enables you to maximise return and minimise risk. This can be tricky if you have no experience of finance, so it is always worth seeking professional help from a reputable financial adviser. There are also plenty of events out there, which will teach you the basics. For example, we are hosting a free workshop for business owners this May, where four industry experts will show you everything from low cost marketing strategies to the techniques to plan your finances and watch your profits grow. Call The Rural Business Community on 01572 338001 for more details. Professional help is so valuable when it comes to your cash-flow, whether you pay for advice or attend a course.
Of course another factor that will help with cash-flow is cutting costs. This is often easier said than done, but there are ways around spending huge sums on valuable aspects of your business. In our experience, most of the small business owners who we work with want to grow by using the best people who can deliver the best results. Unfortunately, the best comes with hefty price tag. We saw this as a problem; one that we should try to solve. We want our members and centre users to have access to a whole host of professional services that can make a strong impact upon their business. It was important that we help to also keep their costs down, through providing ad-hoc services that they can uses as a when they need them most. This system means that our members do not have to employ a huge, full-time workforce, which tends to eat up budgets quickly. Instead, they get the best of both worlds; experts at a fraction of the cost. Currently our Rural Business Solutions cover everything from HR to IT, and we are continuously growing our services to cover even more business needs. Visit www.theruralbiz.com/services/virtual-services to find out more.
There is no exact science when it comes to business growth, but get the basics right and you will start to see your business bloom.