The fundamentals of business success
At HB&O, we’re lucky enough to work with some fantastic clients, from start-up to long-established businesses, all with their own challenges and opportunities to navigate. As organisers of the Leamington Business Awards, we’ve been giving some thought to what, in our experience, are the success factors which are common to all businesses, regardless of size.
While there are many aspects which can influence the success of a business, often the biggest challenge for a business owner is to ensure they are directing their business rather than getting bogged down in the day to day detail. Even micro businesses can operate more cost effectively by enlisting the right kind of support – whether that’s in business planning, financing or administrative support.
In our experience, many businesses are based on great ideas, but it’s how you put those ideas into practice that will determine your success. We advise clients to start with their end goal in mind. What is your ambition? Are you looking to run a business which fits in with your lifestyle and stays small or do you have long term ambitions to expand, employ more people or operate internationally?
This question is important in determining what structure you utilise, the finance you are likely to need and where you will spend your money. It’s not uncommon for business owners to try and keep costs down by doing as much as they can themselves or asking family members to help out with admin tasks or bookkeeping. But beware the ‘busy fool’ – think about your skill set and the value of your time (and that of those around you). Should you be out there building relationships and gaining customers or spending time in the office running your payroll or filling out expense forms?
Pricing is also a fundamental factor. If your long-term ambitions are to grow, you need to be mindful of the impact of running a larger business from day one. How will you fund growth if your margins don’t allow for premises or extra staff? Naturally, your pricing structure should reflect your expertise and be in keeping with comparable businesses in your sector, but it should also account for your long term plans. This is where writing a one, three and five year business plan can make a crucial difference. If you know where you want to be in five years, you are better placed to put the incremental steps in place to get you there in the short and medium term.
Many businesses fail because of simple issues like cashflow. Even the most successful businesses can be sunk if they take their eye off the ball, and with the number of cloud accounting packages now available, there’s no excuse for not keeping your finger on the pulse of your business.
Budget setting and cash flow forecasting can benefit any business, regardless of size. If you always know what your fixed outgoings are, including premises, salaries and supplier costs, you can plan to ensure you have the income to cover them. Your forecasting should take into account seasonal variations and major investments such as new equipment. Be wary of falling into the trap of allowing one client to contribute too much of your income which could leave you vulnerable if their circumstances change.
When it comes to choosing advisers, do your homework. Investing time in developing sound relationships with people you trust will pay off in the future, particularly as your business grows. Ask for recommendations and always take up references – reputable businesses should be only too happy to put you in touch with one of their existing clients for an insight into how their service works.
These are just a few of the essential foundations to consider when running a business. But there are lots of ways in which you can really stand head and shoulders above your competitors. Focusing on delivering fantastic customer service, investing in your employees, encouraging innovation and supporting your local community are all great ways businesses can excel. That’s why the Leamington Business Awards has introduced categories which celebrate these skills, alongside specific categories for new businesses, young entrepreneurs and those working in the non-profit sector.
We are extremely proud to work with local businesses, both in supporting our clients as they grow, and in helping the wider business community celebrate success through the Leamington Business Awards.
To find out more about how we can support your business, get in touch with me by email on firstname.lastname@example.org or call 01926 422292.