Raising a Business

A Woman's No-nonsense Guide to Successfully Growing a Small Business

Sonia Williams

• Publisher: Wiley
• Year: 2012
• ISBN:
  9781118319635
• Edition: 1
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

Raising a Business is aimed at women who have recently started, or are planning to start, a business. It is designed to teach women how they can successfully prepare their business for, and manage, growth. It outlines the key areas that business owners need to look at to create a profitable, sustainable and successful business.

The author, Sonia Williams, interviewed several successful Australian businesswomen, who share their strategies, tips and advice for growing a business.

Chapter 1

What does it take to grow your business?

Business growth doesn’t just happen. You don’t just wake up one morning to find your business has grown overnight — you need to plan. Many women start their own business as a way to improve their work–family life balance or make a winning idea a reality, but they will stall unless they plan for business growth.

Enthusiastic business owners tend to forgo planning for growth because they don’t realise the importance of this activity. These are the proprietors who find themselves working flat-out just to keep their business afloat. They end up ‘wearing all hats’, and fail to take the time to consider how they will grow their venture from the small owner-operated business it started out as. They often miss out on real opportunities and eventually find themselves struggling and exhausted, and disillusioned with the idea of owning their own business. They may even decide it is too hard and give up.

This chapter reveals what it takes to successfully grow a business. It’s about planning — there is no such thing as an overnight success. Ask yourself, do I have what it takes to grow my business?

Business growth

Business growth is about taking your business to the next level. This can include increasing sales, gaining a greater market share, expanding your customer base, acquiring new staff or increasing your infrastructure — all while ensuring healthy profits prevail. Business growth is about proper planning to ensure your business goes from a small business to a medium-sized business. Achieving growth does not necessarily equate to success, because the process may be accompanied by a great deal of additional work and stress. Many owner-operators are happy to keep their business small; if this is in line with the ambitions you have for your endeavour, then you are already a success.

The ideal business-growth model

The foundation of any business-growth strategy is built on the extent to which a business owner can generate and motivate positive word-of-mouth promotion. Word-of-mouth promotion is an extremely powerful and cost-effective way to grow a business. When customers are positively singing your praises they naturally influence those around them. There is no greater endorsement than customers promoting your wares to others. Stories about products and services are told again and again, and serve as free publicity. It is advertising you simply cannot buy.

As customers, we buy into these stories, particularly if they are told by people we know and trust. In order to successfully grow your business, you must turn your product or service into a topic of conversation that will be mentioned at dinner parties, tearooms, mothers’ groups and so on. People are more likely to try a new product or service when influenced by positive word-of-mouth promotion from friends, family, trusted colleagues and associates.

Larissa Bright established DIVA Cosmetics in 1998. Initially the company had no advertising funds, so DIVA Cosmetics relied solely on word-of-mouth promotion to generate publicity. Larissa attributes DIVA Cosmetics’s high level of word-of-mouth promotion to the company’s high-quality products. As Larissa says, ‘Create a great product, don’t deviate on quality or integrity, and people will talk’.

Like Larissa, Naomi Simson of RedBalloon Days says her company’s growth is definitely due to word-of-mouth promotion. RedBalloon Days achieves significant growth because its mission is to take care of the quality it delivers. Naomi explains her company’s philosophy below:

At RedBalloon Days we make very strong promises to our customers. It is because we fulfil these promises [that] our customers are naturally delighted — so delighted with their experience that they tell someone else.

To create positive word-of-mouth promotion, your plan for growth should focus on addressing the key areas depicted in figure 1.1 (overleaf). Figure 1.1 outlines the ideal model for generating business growth. The extent to which you plan, design and facilitate strategies that support all steps in this business-growth model will have a positive effect on your ability to grow your business.

Figure 1.1: the ideal business model for growth

Depending on the business and the degree of strategic planning you’ve already undertaken, some areas of the model may be more applicable to your situation than others. Although each step in figure 1.1 builds on the last, you will only generate word-of-mouth promotion through the design and development of a product or service that satisfies its target market’s needs.

Irrespective of the level of research and planning you’ve already undertaken, it’s vital that you start with the first step in the model, identifying your target market, and then work your way up. Some business advisers may disagree and suggest that it is better to start with the coordination and development of the ‘right team’ or the orchestration of a powerful marketing campaign. Remember, if you cannot readily identify your target market, you won’t know or understand its needs; by not satisfying customer needs your business will fail to motivate word-of-mouth promotion and will ultimately stagnate.

It is important to identify your target market. Many businesses fail to grow because they don’t have this basic knowledge. If you don’t know your target market, you will waste valuable resources when trying to grow your business. You can’t expect customers to talk about your business if you don’t even know who they are.

Once you have readily identified your target market, you will be able to develop a greater understanding and appreciation of its needs. You need to ask yourself what solution your target market is looking for and why. When you understand the needs of your target market you will be able to design and develop the products or services that will satisfy its needs. Moreover, how well your product or service meets the needs of your customers will determine the extent to which they positively talk it.

In addition to knowing your target market, providing your customers with extra value gives you a real opportunity to grow. A great way to get customers talking is by taking this extra step. Unfortunately many small-business owners focus on cutting costs to the detriment of the overall long-term success of their business. Instead they should be focusing on how they can provide more customer value and encourage repeat patronage, customer loyalty and positive word-of-mouth promotion.

In order to kick-start the word-of-mouth promotion required to grow your business, implement a tailored marketing strategy that appeals to your target market. Many business owners make the mistake of misallocating their marketing dollars. To successfully grow a business you must know the right marketing message to communicate and the most effective method of delivering it to your market.

Like possessing a strong marketing plan, having an overall business vision is also crucial to business growth. Business owners are sometimes so caught up in the daily management of their business that they fail to develop and foster a vision for it. A well-articulated vision has a tremendous impact on a business and its ability to grow. A strong vision is like the rudder of a boat — it provides the direction for everything the business represents and does, both internally and externally. A strong vision ensures the direction of the business. It also positively encourages staff to focus on realising that vision.

Of course a business vision is nothing more than a vague idea without the support of a strong organisational culture and leadership style to ensure it is adhered to. A negative culture and a poor leadership style obstruct the successful implementation of a business-growth strategy. Businesses struggle to successfully meet their customers’ needs if their work environment is characterised by negativity or poor leadership.

A good vision is meaningless in a business, however, without the right staff on board to make the organisational culture and vision a reality. Many business owners fail to plan for the employment of staff; therefore, they inevitably employ the wrong people, which can impede their ambitions for achieving growth.

Although the formulation of policies and procedures can seem minor, it is also crucial to your business growth. These are the rules used to operate and manage your business in a systematic and consistent manner. In order to achieve growth, your business must be able to replicate the same desired outcomes time and time again.

Create relationships with those companies that could affect your business and its growth

Like policies and procedures, strategic alliances also aid business growth. To successfully grow your business, create relationships with those companies that could affect your business and its growth. It’s important that you dedicate quality time to establishing these alliances before embarking on a growth strategy.

Likewise, it is absolutely vital that you understand how to account for your business. One of the main reasons many business owners fail to succeed is that they mismanage their accounts and cash flow. Without realising it they ‘beach the boat’ before discovering that they should have managed their finances more effectively. As anyone will tell you, it is extremely difficult to grow a business when facing a financial crisis.

Qualities needed for business growth

During my interviews with the businesswomen featured in this book it became apparent that there were qualities they shared and to which they attributed their success. Ultimately your level of determination and commitment makes the difference between a successful business and a failure. It is not about luck.

It was through determination, commitment and passion that the four founders of sNspice were able to overcome difficulties associated with undercapitalisation. Lucille Sutton recounts their feelings during those times in the following statement:

Because you know you don’t have the luxury of financial independence behind you, it makes it that extra bit harder and makes you also that extra bit more determined to succeed.

You must be passionate about your product or service and your business. Passion is more than just about how you feel about your product or service; it’s also about being passionate about your staff and what you can do for your customers.

Like passion, your level of commitment to business growth will also affect your ability to successfully grow your business. Raising a business can have implications on your personal life, so it’s important that you remain dedicated to your business, even through the tough times. Businesses often fail to grow because their owners struggle to cope with the changes in lifestyle brought on by the stress and hard work of building a business. In fact Naomi Simson believes hard work is the one true key to success, although she admits that no-one likes to hear this.

Many new business owners have left paid employment to start their business ventures, and are therefore accustomed to earning a regular wage each month. Launching a business takes an immense amount of time and energy, and most business owners will not readily receive a regular income from it that compares with their previous salary. When a business does start to show signs of growth, it then consumes more and more of its owner’s time. The owner in turn may start to neglect her personal life — as loved ones start complaining that they are being overlooked — and, worse still, will have no incoming cash flow to compensate for it. The budding business owner can slowly become overwhelmed and may ultimately decide that she can no longer continue to effectively balance her business with her personal life.

Time management

One of the main reasons business owners fail to successfully grow their business is a lack of planning and preparation. Raising a Business is written to provide you with strategies to help you plan and prepare your business’s growth; however, all the strategies in the world will be of little use if you manage your time poorly. It comes down to the 80/20 rule: 80 per cent of your time should be spent working on your business and 20 per cent of your time should be spent planning for your business. Each of these two activities is as important as the other.

The reality is that more often than not business owners find they are responsible for most daily operational tasks and administrative activities. So even though some want to grow their business, they fail because they lack the necessary organisational and time-management skills. Remember that time management is about changing negative habits and behaviours that are consuming your valuable work time.

This discussion focuses on how you can successfully manage your own time so that you can focus on the future of your business. As a business owner, your relationship with your business is similar to that between a parent and a child: the child (your business) is groomed and guided along the path to adulthood (sustainable business growth) by its parent (you). Businesses don’t just grow on their own; their owners play a distinct and important role, by setting their goals and directing them towards the future.

You can’t change what you don’t acknowledge, so start tracking your time to evaluate how you are spending it. Log what you do at work each day for a week, making sure to list the time you spent on each task. Include everything — even the time you take for a break. At the end of the week, analyse the time you have spent on each activity. Are you spending more time on sales-related activities or administrative duties? Can you identify a trend? Do you know why the trend exists? (After looking at their time, many business owners are quite surprised to find that they spend a lot of it dealing with non–business-related matters or attending to issues that could be outsourced.) When you have identified the activities that absorb your time you can begin establishing a daily routine.

Before settling on a daily routine ensure that it is making efficient use of your time. Prioritise each activity you need to undertake each week. When prioritising your tasks consider your energy levels: if you are a person who bounds out of bed full of energy, then make sure you address your high-priority tasks during that time. Alternatively, if it takes you all morning to get your engines burning, delay those tasks until the end of the day, when you are at your best, and use your mornings to address less important tasks. Coordinating your energy levels with your tasks will ensure you work more effectively and efficiently. Attending to a high-priority activity when you simply don’t have the concentration or ene...