Wednesday, January 16, 2013

How To Run a Business

How to run a businessPerhaps you’re thinking of starting up a small business? Or maybe you’re already running a business and looking for some tips on how you can run it more effectively?    

Here’s five core lessons that I’ve learned from over 20 years of running a corporate consulting business …….

1.   Before starting up a business, make sure you’ve got the right temperament for it

You’ve got to be able to work independently and be a self-starter. If you are the sort of person who wants to be told what to do, then chances are that small business is not for you. You require persistence and you’ve got to have mental toughness, because there will always be ups and downs in running a business and you need to maintain faith in yourself and your business model.

2.   Don’t lose sight of your bigger picture

It’s all too easy to get side-tracked when you run a business and get caught up in relative trivia without even realising it at the time.  Your business plan provides your business with the overall direction that you need. Every year, you set goals in all of the major areas of your business – sales and marketing, finances, equipment and technology, and training (for yourself and for your employees if you have them).

Setting these bigger picture goals for the business is all well and good. But what determines whether these goals will be accomplished are the actions you take on a daily basis. So set some daily goals for yourself and keep a checklist of tasks you need to accomplish …… And if the list is getting too big, step back and identify the top priorities and ensure that these items get done before doing anything else. Forward thinking and planning, combined with self-discipline and healthy routines are essential to maintaining a sense of control and focus in your business
So thinking about how to run a business effectively cannot be considered in isolation from regularly reviewing your own personal efficiency. Wisely manage your own time each day and keep your bigger picture goals in line of sight - so that you ensure how you plan your day will move you closer towards these goals.

3.   Listen to your customers

If you’re running a small business or home based business, then it’s your ability to build close and loyal relationships with your customers that is one of the potential edges you have when competing with the bigger guys.  

Sure, being friendly is part of it ….. But more important is understanding the needs of your customers and how they are using your product or service. Listening to them and learning more about the problems they have and the pressures they experience can give you more ideas for innovating new products and services that provide solutions to their problems. Existing customers are often an untapped pool of additional sales and more business – but you’ve got to listen and ask questions to discover these hidden opportunities

4.   Internet marketing lets you compete against the big guys

You may run a small business or a home based business, but on the internet highway you don’t need to have a huge advertising budget to succeed in winning traffic to your website. It is worth investing in a professional looking website that is constructed with search engine optimisation (seo) in mind – there’s no point having a website unless you can get your website found by Google. And this means appearing on the first page of Google results for search enquiries with your keywords.
Alternatively, if you’re not competing effectively in the organic, free search results, then consider trialling an Adwords campaign and paying for your website to appear in the advertised section of search results (the column on the right hand side in Google). But monitor carefully the number of enquiries your Adwords campaign generates in order to assess whether it is worth the cost as you move forward.

Another key element in your internet marketing campaign should involve the selected use of social media to help raise the profile of your business.  Whether it is Facebook, Twitter on LinkedIn – try to find ways of engaging potential customers into your business. Again be careful that you don’t invest too much time into social media unless you find it is generating a reasonable return in enquiries from potential customers.

Regardless of whether your business services simply a local market, or whether you target a wider national or even international market, the internet has helped to level the playing field for small businesses and home based businesses so they can more readily compete against much larger organisations. You don't need a huge advertising or marketing budget, but you do need to be willing to invest some time in learning how to get your website found by Google

5.   Increasing your profits

When you’re running a business, you can increase your profits broadly speaking in one of three different ways ……. Either    

i)            Increase your revenue by increasing the volume of your sales. …. This sometimes can be achieved by more effective internet marketing, and improving your search engine ranking. For example, undertaking some SEO to your website might result in lifting your website organic (unpaid) ranking for your keywords from number 9 to appearing number 4 on the search results page – which of itself could increase the volume of enquiries by as much as 20% in some cases. Of course, you still need to work at converting the enquiry into a sale

ii)           Increase the price of your product or service ……. But this needs to be considered carefully, with a close eye on the prices of your competition – there’s no point pricing yourself out of the market (unless you really do own a niche space)

iii)          Reduce operating costs in running your business ….. This doesn’t have to mean becoming a penny-pincher, but simply becoming more prudent with your expenditure. It could be as simple as sometimes questioning whether you need to really purchase that new leather chair for the office. Or maybe scanning the marketplace again to make sure that your suppliers are really providing you with the best deals that they can

Also intrinsic to running a profitable business is managing your cash flow. It’s all too easy to find yourself in a situation where your monthly expenses and the bills that are due outweigh the cash flowing into the business. And this stress is not being caused by inadequate sales revenue, but more because of a problem with late payments from customers.

6.   Before you hire staff …..

There comes a time when some small business owners become confident they’ve found the formula for business success. They see such a steady growth in their business, and they realise they can’t handle it all themselves and so they start looking at hiring staff. But staff recruitment and staff management are a whole new set of skills – so make sure you get some good advice and training to help you before taking this step. Recruiting the wrong employee can do considerable damage to your business brand – and managing them poorly can mean they won’t be as productive as they could be. For some quick and simple recruitment advice, read Hiring Tips for Small Business and for staff management tips be sure to have a look at Management Skills Development

So in closing, if you’re thinking about how to run a business effectively, don’t be afraid to ask for help and guidance from other people who have succeeded in business themselves. Maybe your local community has a Rotary club or some other network of business people that you can join with. And check out the Australian government website for possible eligibility to access government grants and funding to support the launch or expansion of your small business enterprise.

Copyright 2013. Brian Carroll is the founder of Performance Development - a corporate training company based in Melbourne that delivers management training and leadership development programs.