As an entrepreneur, I know first-hand that running a business is a challenge that some thrive on and most find very difficult. Unexpected issues can appear when you are least expecting them and most of the time there isn’t any guidance or advice on how to avoid these situations and make your business thrive.
After successfully exiting my first business, Australian Green Clean last year, I was humbled to see interest from the business community wanting to learn from my experience – which is why I launched an advisory firm and called it Iconic Growth.
At the core of our advice to the ambitious business owners that are seeking growth are our three golden pillars namely profit, purpose and people. I firmly believe that these are the 3 major items you must get right before being able to grow a business successfully.
Profit is important
For a business to thrive, it must have a solid plan to ensure it is commercially viable from the beginning. This doesn’t mean that you must be making a profit from the beginning (as I know that it takes time and capital to grow a business). However, it means you must have a strong plan for the business to become profitable and to have a commercially viable business model. I recommend doing in depth planning to ensure that the services are able to be delivered in a profitable manner and that the business will get you closer to your personal and financial goals. Planning at the beginning can save you from years of work that may not pay off.
Alarmingly, there are more than 2 million small and medium businesses in Australia and only 30 per cent of them have no debt. This means that more than two thirds of Australia’s SMBs (70%) are risking failure due to the pressure of repaying the loan principal, interest and the fees, not to mention dealing with the pressure of meeting the liquidity and performance ratios of the debt covenants, which will affect your capital structure and also the other decisions you make in the business. I do note that I am not against debt in a business, however you should be very careful of going into debt at the beginning.
If you are able to fund the business yourself and not give away equity at the early stages, I recommend this. You will thank yourself later because you will learn how to run a lean business and make it work and the strict principles that surround this. In addition to this, you will have more equity to dilute in the future (at a higher valuation) if you do need to raise capital.
In summary, get your business model right and ensure it can be profitable before investing funds into growing the business.
Have a purpose
I see many hard-working entrepreneurs with a lot of passion but little purpose. What I mean by that is often they have identified a gap in the market that they can take advantage of and they are seeking to exploit it-so far so good.
However, the purpose of filling this gap needs to be more than what I often hear such as to provide an income, deliver a dividend or to create a lifestyle. To run a successful business your purpose of existing must be much more meaningful, as well as tangible.
I’m not talking about a mission statement where your business indicates what you want to achieve in two or five years. A purpose is much more of an aspirational goal. It is the big picture and your reason for existing. It is basically your company’s north star (your Polaris). Know this and you’re on your path to running a successful business.
Two questions you need to ask yourself to identify your businesses purpose are: how is your business making your customers’ lives better? What positive effect does the service you offer have on society?
As an example, Apple’s purpose is: ‘To humanize technology’, Google’s is: ‘To organise the world’s information and my businesses is: ‘To enable great businesses to grow’. Find your businesses purpose and run with it.
Employ the right people
With the noblest of purpose and a sound business model, a successful business still won’t be achieved without the right people working towards your goals.
No matter what business you are running, your people are at the heart of it. They work together to make your business and facilitate its ultimate success.
Of course, everyone has different strengths and every role has certain requirements. The best teams have a diverse pool of talent with each employee matching the unique needs of that position. But one thing I see across the board is that ‘attitude’ is of paramount importance.
In my first business, Australian Green Clean, we were a cleaning and waste management company. When I started the process of employing people (when I was 21 and had never done it before), I noticed that everyone had the skill of knowing how to ‘clean’ on their resume. Everyone has to clean something in their life (albeit some people clean a lot less than others). When I had 10 staff I noticed there were half doing a great job and the other half who were not. After analysing the situation, I realised that although they all had the skills, their success came down to their attitude. From this, I developed a values matrix that drove every decision regarding staff performance and from that point forward, we employed based on the core values of a person – not their skill. I grew that business to have 400 staff using that exact values matrix and even today Australian Green Clean employees still amplify the high level of attitude alignment (and therefore high performance) that we created.
This is also very true for businesses that sell technology or are a SaaS business. When you are looking to employ people, in which a lot of technology businesses employ people rapidly when they are growing, I recommend having the core skills (e.g. UX dev or UI dev) as a core requirement but then the decision is based on that employee having the right attitude – which is the attitude that aligns with the business’s purpose and goals.
The winning trifecta
The trifecta might look simple but it is definitely not easy to implement. If it was easy, everyone would be doing it. By virtue of reading this article you most likely have the other winning attributes of successful business owners that is, perseverance and willingness to learn. I’ve found both to be crucial for achieving growth whilst enjoying the journey along the way and I hope you too can achieve success.