INTRODUCTION FOR NEXT MEETING TOPIC:
INTRO to this meeting topic:
This fortnight’s topic is contributed by Ann Cooper-Smith, a chartered accountant and business strategist. In this article, Ann shares her thoughts on ‘business growth’ through 3 different lenses – the micro business, the small business and the ‘large’ business. Read the article below and consider ways in which YOUR size business can best move forward and grow, even in the uncertain business environment we’re living in. Then, choose one to discuss as part of your 60-second introduction.
To Grow or Not To Grow? By Ann Cooper-Smith
We go into business for all sorts of reasons – to be our own boss, redundancy, a bright idea, turning a hobby into a business, and so on. Very few start people with a strategic approach to their business.
Once in business we “grow” the business through trial and error, making expensive mistakes along the way. But “growing your business” is an overused term. Growing sales, profits, team, market share, business value or lifestyle may require different strategies.
There are three main SME types:
Self Employed (Micro Business)
The simplest way of being in business is working for yourself, whether as a sole trader or a company. As sales and demand for products and services increase the self-employed often hire staff to assist. A “Self employed” person may have 2, or even 5, staff to leverage their time but essentially the owner is still the business and little income is earned unless the owner is working IN the business.
Being self-employed can be an ideal structure for the highly skilled, especially if those skills are non-transferable – for example a brain surgeon or a barrister. The self-employment option is also preferred by those not wanting the hassles of managing staff, or those who want to balance family/lifestyle with income earning activities.
The self-employed business growth strategy is to maximise productive time and revenue, minimise costs and downtime, treat the business as a cash generating machine and invest surplus cash into passive investments (that earn income while you sleep).
When you have sufficient passive income you can choose to stop working, and you may be able to sell your stock/customer list for a small amount, but the sale price will be woefully inadequate to fully fund your retirement.
The Business Owner (Small Business)
Successful self-employed people may evolve to become business owners with between 5 and 15 staff. Having more staff allows revenue to grow, as does business complexity.
Business owners wear many hats – sales, marketing, production, systems, leadership, HR, IT, finance etc. Being a business owner can be stressful because while business owners leverage their time, they have so many more responsibilities to cover.
Unfortunately, the complexity of small business can cause overwhelm, and some business owners scale back reverting to self-employment once again. Or they sell the business as is, for a low price multiple (the business is very reliant on them and therefore less valuable from a purchaser’s perspective). Or they go broke because they did not develop the necessary cashflow management and business planning skills to continually feed a cash hungry growing business to success tipping point.
The business owners’ growth strategy is to work ON the business to build a strong brand, processes and systems, ensure adequate capital and cashflow for growth, as well as nurture a high performing team and business culture. If successful then revenue / profits / cashflow will grow, and the business will remain manageable with trained staff and excellent systems covering all vital areas of the business from sales to HR to cashflow and risk management.
The Business Investor (Larger SME)
Successful business owners who grow and scale their business to 15 or more staff create a much more valuable business that is no longer reliant on them.
The business investor’s growth strategy is to continue to grow revenue, profitability, and invest in systems to the point where the business successfully runs under management supported by high performing teams. The business owner earns director’s fees and dividends, and perhaps a salary if they choose to continue to work in the business (either full or part time).
Since the business can successfully run under management the business value multiple will be high and the business owner could sell all or part of the business for a substantial sum. Alternatively, the business owner may retain ownership and earn passive dividend income. We recommend business investors reduce risk by diversifying their other investments.
Which Strategy is “Best”?
If you are an Elon Musk, Bill Gates or Steve Jobs you’ll be driven and not stop until the business becomes a global success story.
But for those looking for their most suitable growth strategy we recommend either:
- Being self employed with support staff and treating the business as a cash cow to build significant passive investments outside of the business, OR
- Grow the business aggressively through the business owner stage as quickly as possible to avoid burn out and reach the business investor stage where scale allows the business to run smoothly under management.
Being self employed is often seen as the poor cousin of business ownership. However, the stress of being a business owner employing 5-15 staff without strong systems and processes in place, or without the necessary business management skills can be stressful and bad for mental health.
Understand yourself, your resources, skills, and motivation – then be intentional about your business growth strategy. Thinking strategically about growth will help you avoid costly mistakes and make for a happier and more successful you.
Find out how Ann helps her clients by checking out her website below:
Chartered Accountants and Business Strategists
Next Meeting Topic
As you think about your 60 second intro this week, consider the following:
- Are you telling the stories you want in your business?
- Do you feel what’s written in and for your business – in your promos, in your social media, in your emails – clearly communicates what you’re about?
- How else could you harness the power of writing and story to help your business grow?
Harness the Power of Story By Jo Morris
People connect with stories. Businesses that utilise this fact prosper, particularly when their stories resonate with customers’ values. Even simple phrases have power – Nike’s ‘Just Do It’ campaign was so effective that people began to contact Nike with their own stories of how they “just did it.” Currently, many businesses are using words like ‘sustainable’ or ‘free range’ to connect their products to stories customers hear about climate change and animal welfare.
Stories resonate with clients and customers, so telling your stories effectively will help you engage with them. Learning how to tell those stories well is an essential part of the growth of your business. To tell your stories, you must be able to write fluently and clearly. Let’s look at some specifics.
Let Clients Know Who You Are
Writing well means that your clients know who you are and what you stand for. You can represent yourself – your beliefs, your moral compass, your intentions, your goals – in a way that will help sell what you have to offer. As well, these qualities distinguish you from your competitors, who are offering their own stories.
Say you’re a real estate consultant. There might be 20 others in your area – so how can your bio separate you from them? How can you compress who you are into 150 words? By writing well.
Look Like You Know What You’re Doing
How many times have you winced when you received an email, or were copied into a colleague’s? Maybe the writer didn’t punctuate correctly, or maybe they were far too chatty in a business communication.
Writing well means that you look like the professional you are (or aim to be!). This is true across businesses but also, if you have staff or colleagues, within it.
If you can write well, it means you lead from the front with your written communication, modelling the company tone and style for staff as well as clients.
Control Your Online Image
Your writing endures where personal interaction doesn’t. Nike’s ‘Just Do It’ slogan has survived long after the 1998 campaign where it first appeared. As well, whatever you post on social media stays there – just a scroll away.
So it’s important to get what you say in those spaces right. Many of us in Venus do our own social media. But how many properly utilise its power? Writing for social media has its own set of rules, its own style.
You might be thinking – ‘but I get someone else to write my social media and marketing materials. Why do I need to be able to write?’
Even if we are outsourcing a lot of our writing, it’s important to know what works and what doesn’t – and how it works (or doesn’t). The more clearly we can explain what we need, the more likely it is we’ll get it.
Write Less, Say More
Clear communication with clients means happy clients. That has two clear benefits. The first is less time spent communicating – in other words, you can stop sending emails and do more of what you’re actually good at! The other is that happy clients are much more likely to come back for more, and to give referrals. So clear communication means growth.
Telling your story will help your business grow, whatever mode or moment you’re in. It will help you connect with clients, express who you are and what your company does.
Get in touch with Jo to find out how she can help make that happen for you!
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