I’ll pay you twenty dollars for that cat.” And the owner says “Sold,” and hands over the cat. The collector continues, “Hey, for the twenty bucks I wonder if you could throw in that old saucer. The cat’s used to it and it’ll save me from having to get a dish.” And the owner says, “Sorry buddy, but that’s my lucky saucer. So far this week I’ve sold sixty-eight cats.” — Salesmanjokes.com
At the last BusinessLink Networking breakfast meeting held on March 30, business strategist, Simon Bere, delivered an excellent presentation on why most SMEs remain small. One of the reasons is that many of the people running enterprises do not know the fundamentals for growing a business.
Simon said there are five essential things you must do to set up a viable business, which are as follows:
Have something to offer that people need
Offer it to as many people as possible
Offer it well
Offer it as frequently as possible
Charge for it
The five points cover one of the most important essences of business, what I would call the first business fundamental, which is sales.
As I touched upon in last week’s article — without sales, you don’t have a business. But sales don’t happen on their own; no matter how good your product is, you need to plan and take action in order to get people to know about your product and make a purchase.
A unique strategy
The second fundamental is your unique strategy; the differentiator between your business and hundreds of others plying the same trade. A common mistake made by new entrepreneurs is falling into the trap of supplying “me too” products and services.
You see someone doing well in a certain trade and you copy it hook, line and sinker. Without a differentiator or something unique about your offering, you will only build a “so so” business.
You will never achieve the rapid growth and high profit margins that are essential to building a sustainable business. Most businesses will never be sustainable until they reach a certain level, the critical mass at which they deliver enough profit and cash flows to enable investment in the physical, human and intellectual resources necessary for optimum performance.
If you get into a common “me too” business, you will struggle to find room for the growth required to attain that critical mass that will lift your enterprise from mediocrity to high performance.
Working with other business experts
BusinessLink has developed a “Graduate Entrepreneurship Kick-Start programme”, an on-the-ground practical programme aimed at developing a new crop of young business owners who will build fast-growing enterprises.
The programme covers the essentials of business, from concept development, power selling, business skills, financial management, business systems and all the way up to building a business that will be a valuable asset. More details on this programme will be sent by email upon request.
No need to reinvent the wheel
Information on the best practices of business management has been documented by experts over many years of study and research. A new entrepreneur needs not start from scratch and learn from experience as many entrepreneurs have already done before us. It is much easier to study what has been proven to work and apply it in your business.
Since no-one can know everything, such help from experts will help you set up business systems that will enable your enterprises to run without you working in it all the time. That is the third fundamental for a growing a business.
Winners of the quiz in the March 24 article will be announced next week, keep your answers coming, there are still seven DVDs to give away. If you missed the quiz, please go to our website http://smebusinesslink.com.
Put in place business systems
As soon as your business reaches a certain level, such as the number of employees, turnover or volumes of products, it becomes difficult to run as a sole entrepreneur. A team is needed. But for a team to work harmoniously and efficiently, business systems have to be in place.
A business system is a set of documents that describe procedures, guidelines and benchmarks for the key areas of an enterprise, such as operations, human resources, procurement, sales and so on.
Because the information is written down and available to all, everyone knows their role, position and responsibility in the entire business process.
Work flows, according to the system and your business, runs like clock-work, even when you are not there. The system allows your business to grow well beyond what a single person can manage.
Phillip Chichoni is a business planning and financial management consultant who works with entrepreneurs and growing businesses. You may contact him on email@example.com.