New Year, New Business?

Thinking of starting that business? redundancy looming? fed up with working for someone else, have a great idea but just unsure of how to make the jump into self-employment?

These are the main reasons that people start their own businesses.

Sadly, the failure rate for start-ups can put you off from even trying. Starting and running a small business is tough. You are subject to high levels of mental stress. You need a solid physical constitution because you may find yourself working longer hours than you ever did as an employee. You have to deal with uncertainty and anxiety and, if you make mistakes, you have to accept the consequences. All that and no absolute guarantee you will even succeed! You may start a small business and find two or three years down the track that your investment has gone up in smoke.
But if you are suited to running a business, you may find that it is one of the most exciting and rewarding things you do in your life. You can control your own destiny in a way that you never would as an employee. If you succeed, you will have the satisfaction of carving out a place of your own in the business world. And you may find yourself wealthier than you otherwise would have been working for someone else.

Your first step in becoming a business owner should be to assess yourself. Can you accept the risks and the hard work? Are you the kind of person who will be satisfied by the rewards offered from running a business?
There’s been a lot of studies of small business people who come up with different ideas about what makes them tick and what characteristics they have in common that makes them successful in business. They find some pretty obvious things like; entrepreneurs as people tend not to like taking orders – they strongly prefer being their own boss; they are high-energy people; they are passionate about their business; they tend to be sociable – which helps when it comes to marketing and selling of course; and they are self-reliant and can work long periods in solitude and without support. More than that, they are resilient, can cope with rejection and failure and still come back for another try. They have mental stamina and can exercise good judgment under stress.

Do you have what it takes?

If you have confidence in your idea and are willing to put your energy into doing what it takes, then the only missing jigsaw piece is knowing the key aspects of creating and developing a business quickly and effectively and getting that right first time round without making expensive mistakes.

Find yourself a mentor, that you know you can work with – who will encourage, push you and make sure you have enough information to make informed decisions as you develop your plans for your business.

 

The Value of Research

I recently watched a student who wants to start his own business, go through an experience that led him to say “this start-up process isn’t as easy as I thought, is it?” – he was learning lessons fortunately before spending vasts amount of money about what you need to know before making decisions in business.

When starting up it is unlikely that you will know all you need to avoid making costly mistakes. For those of you considering a self employed life here are some tips!

  • Ask someone you trust for some independent reality checking of your plans
  • Do your research, about your idea, the market you are entering, your prospective customers, your competitors and your possible suppliers.
  • Try not to view seeking paid for support as a cost, it can be the best investment you consider.

In the students case doing his research and discussing it led to me seeking more specialist help on his behalf, regarding intellectual property issues, saving him £££’s in the longer term.

If you are unsure of your next steps in start-up then speak to someone you trust and don’t just assume everything will be alright!

Till next time….

Leadership Focus

Leadership is based on two things:

  1. Understanding the motivation of the people who work for you, and
  2. Being able to get them to work towards your vision of where the business is going.

You need to look at what motivates people to give their best in the workplace. Without an understanding of this you may set up the wrong structures and simply be adding challenges to getting your team headed in the right direction.

In recent times there has been a move away from the ‘command and control’ style of leadership, where a leader basically imposes his or her will from the top down. These days, effective leadership generally involves giving teams and individuals a degree of autonomy and letting them find ways to work in the most efficient way possible. According to current thinking, you guide and motivate people by giving them frequent and informal rewards and encouragement. Rather than focusing on ways to impose discipline, leaders now focus on trying to ‘catch somebody doing something right’ so that they can reward them and reinforce a particular kind of behaviour.

This change has come about partly as the results from studies about what people really want out of a job. These studies typically approach this by getting employees to rank a number of items they think motivate their team, and then getting the team to rank them. Most commonly, the rankings are widely different.

Employees’ Rank Item Employer’s Rank
1 Interesting work 5
2 Appreciation and recognition 8
3 Feeling “in on things” 10
4 Job security 2
5 Good wages 1
6 Promotion/growth 3
7 Good working conditions 4
8 Personal loyalty 6
9 Tactful discipline 7
10 Sympathetic help with problems 9

From: Niebrugge, Vicki, Declining Employee Morale: Defining the Causes and Finding the Cure, NOVA Group

Note the things that are real motivators for employees. These are the things that you, as leader, need to keep in mind in building your HR policies.

So if the ‘leader’ is not out there looking for people who are doing things ‘wrong’ and directing them to do it ‘right’ what are they doing? Well, what they ought to be doing, what a leader’s primary purpose is, is to provide an overall sense of vision about where the company is going, and ensure that this vision informs all decisions on strategic and management issues.

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Are You A Good Leader in Your Business?

To run a business effectively, you need to master the art of leadership.

You may be a good manager, that is, you may be able to create good systems and procedures for your team members. You may be able to draw up effective operational guidelines that will help team members get through the day-to-day detail of their jobs. But these are management activities.

Leadership is more about creating and communicating a vision, and motivating people to work towards it. When you lead, you focus primarily on human nature, rather than on operational details. And you do it with the aim of getting people aligned and moving in one direction–the direction that will make your business really fly.

How many of you are confident of your leadership style?

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Always a great reminder to step out of your business from time to time and work on your end goals rather than fire fight day to day distractions!

Unfreeze Your Ps

Michael Gerber suggests in his book The E Myth Revisited: Why Most Small Businesses Don’t Work And What to Do About It, that it’s a myth that most businesses are started by entrepreneurs. Gerber suggests that many businesses are actually started by a person suffering from an ‘entrepreneurial seizure.’ That is, instead of creating a business that works independently, we create a business that can only work with us in it. This is when the day-to-day running of the business takes us over.

So, once you have stepped back and looked at what you are doing In your business and made some decisions about what you want and have identified some specific goals to achieve, you will need to take action:

The next step is to look at developing simple systems for some of the key functions that your business depends on. Many people are aware of the concept…

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Working On Your Business – next steps…….

Michael Gerber suggests in his book The E Myth Revisited: Why Most Small Businesses Don’t Work And What to Do About It, that it’s a myth that most businesses are started by entrepreneurs. Gerber suggests that many businesses are actually started by a person suffering from an ‘entrepreneurial seizure.’ That is, instead of creating a business that works independently, we create a business that can only work with us in it. This is when the day-to-day running of the business takes us over.

So, once you have stepped back and looked at what you are doing In your business and made some decisions about what you want and have identified some specific goals to achieve, you will need to take action:

The next step is to look at developing simple systems for some of the key functions that your business depends on. Many people are aware of the concept of the ‘This is How We Do it Here’ manual like that in a McDonald’s store franchise. In a small business owners can feel nervous of the work involved in creating this kind of manual, I will always encourage making a small ‘baby step’ approach and look at documenting say 2 key functions a week. This means extracting information that we usually just keep in our heads about the way something is done.

One of the benefits of writing it down, is that once done – SOMEONE ELSE can perform that task and importantly for those of us who become control freaks as owners, is that you can document not just what has to happen but to a degree you can define HOW it is to be completed too.

Once you start to put simple systems in place you will begin to see a number of other benefits:

  1. You can more easily delegate to people in your team if you have one and that can really motivate them to be more involved in your business.
  2. The unwritten rules of your business can be clearly defined and everyone can understand the culture of your business more easily, what you do, how you do it and the standards you set in the delivery of your products and services.
  3. Customer service processes will become more efficient and you will become more effective, so that your business doesn’t suffer from unexpected breakdowns.
  4. Once the business is independent of you it has more value as well.

Now, I won’t pretend that this process is easy – it’s not! You are already overworked and under pressure and this work does mean more in the short-term – but this really is a classic case of short-term pain – long term benefit.

Why not have a go? You may surprise yourself….

If you try and get stuck – email me or give me a call 07760 767025 and I will make some suggestions about strategies to help.

Frozen Ps – Systems Development and Implementation – Alternatively – If you would like to know more or you know that you need to do this but do not want to spend the time or resources on making it happen then please get in touch, as this is a project management service that we offer our clients and with our help you can ensure that it is implemented, we have the resources and the know how and we can help you short cut the process and save you re-inventing the wheel!