Being a business owner is exciting. You can make your own decisions and secure your future whilst doing what you love. However, being in business is also complicated. Having a ‘good’ business is about providing quality goods and services; creating and building a successful, thriving business takes specialist knowledge and the commitment to make the hard decisions. Trouble is, how do you know what these decisions are and when to make them?
The decisions you make will depend on the “level” of your business.
1) A SEED BUSINESS is a thought or an idea about meeting a need or solving a problem. It can even be a hobby or something that you are interested in and passionate about. You start to think about how you could commercialise the idea, it is often done in your spare time. At this stage, there is no work or revenue and there is a sense of hope. Asking the right questions and checking your assumptions is crucial.
2) A START UP BUSINESS is when you decide to check out your idea. This takes courage, there is no shortage of “good ideas” but it takes guts to say, “I am going to give this a go”. You want to prove the concept and this is best done when people pay you for this product or service. There is a level of excitement and this is also a time to be careful. Often people get caught up in the excitement and make some poor decisions relating to expenditure and commitments.
3) A SURVIVAL BUSINESS, you have just enough work coming in, you are working extremely hard and there doesn’t seem to be any money. Often business owners at this level feel they would be better off having a job because they are working long hours and not paying themselves a market related wage. Many businesses are stuck in survival mode. It can be difficult to see the wood from the trees. Getting clarity about how your business creates value for your customers and enhancing your business skills is very important.
4) A STABLE BUSINESS is when you have the right type of work coming in, work that is profitable. You can pay yourself a market related wage. You are working a reasonable number of hours and you are back in control. It is easy to get comfortable here, however by focusing on better communicating your value proposition, developing systems and building your team you can then start to enjoy the freedom of being a business owner.
5) A SUCCESSFUL BUSINESS is when you have a steady, predictable flow of the right work coming in, the business is profitable after paying yourself a decent wage. You are being rewarded for being a business owner. You now have the choice to cut back your hours or start to prepare your business for the next level.
6) A SCALEABLE BUSINESS is about getting your business ready to scale or if you choose to sell. You have a predictable flow of the right type of work and now it is about growing your capacity. This can be done in number of ways including improving efficiencies and systems, employing more people, clever marketing, extending your channels and entering new markets. You now lead a team of engaged people and you are focused around the strategy.
7) A SELF-SUSTAINING BUSINESS is when opportunities start to find you. You and your business are in flow, business becomes easy and you have a different perspective of what is involved in owning a business. People want to work with you and partner with you, you have the opportunity to invest in other businesses. You start to review and filter opportunities based on your own criteria. You evaluate opportunities in terms of both a return on investment and a return on effort.
The questions to ask yourself are:
- What level is your business at?
- What level do you want to take your business too?
- What can you do today to start moving your business up to the next level?
- Article by Sam Harrop
Speaker| Author| Mentor