Even though it doesn’t take an MBA to run a successful business..
Approximately 1 in 3 businesses are truly profitable –is yours one of them?
Currently approximately 1 in 3 businesses in Australia is genuinely profitable, 1/3 breaking even and the remainder losing money.
Pretty shocking numbers if you think about it, especially if you have the courage to look at your own business and find that yours is actually one of the latter two.
It is also food for thought when considering your prospective clients; who you want to provide with services and goods. There is a 2 in 3 chance every time you provide credit, that your client might have cashflow problems.
Why are only so few businesses really doing well?
To understand why so few are doing well, it helps to ask how they began trading.
A lot of businesses are started because of the owners/founders’ industry skill and a passion for their trade or product.
Most small businesses, especially the trades have an initial influx of business, which is often a result of their immediate network of friends, family and existing trade contacts.
This initial inflow of business, without the input of marketing effort, leads to a perceived sense of success, that “business is pumping” and that running a business is actually not that difficult.
Which leads to another critical error many people make early in their career. – They employ their life partner to do the admin. Now don’t get me wrong, in a few cases this does really work well, but a lot of the time, the partner being employed is not a professional bookkeeper nor trained in admin.
Often this choice is made to either save money or keep the money in the family. The reality though is that often it is a case of “the blind leading the blind” where neither the founder nor the bookkeeper have the necessary experience and/or knowledge to run a successful profitable business that provides a good lifestyle for the owners.
So what does it take to run a profitable business?
There are a few, key elements, that differentiate a successful business from one that is just going through the motions.
1: Successful businesses are systemised
Just look at McDonalds and you see successful and repeatable systemisation. Until recently, for most prospective business owners it was a matter of either buying an existing business with systems already in place, buy a franchise, or developing your own business model the hard way, over years of trial and error.
Thanks to the internet and recent leaps in mobile technology, SME’s now have access to state of the art business management software that reproduce successful, and profitable business systems such as JGID – Just Get It Done!
Well established successful business systems, such as those within the JGID business management software, can save people years of painful learning, and allows SME’s to use turn key solutions to business management within a matter of hours without huge upfront investments. Systems like JGID and XERO are based on industry best practice, passing on years of experience without the learning pains.
2: Successful businesses consistently have good marketing
Marketing is something most business owners don’t like thinking through, doing or talking about.
Try thinking of it this way; marketing for a business is necessary like fuel is for fire. The more you put in the bigger the fire burns.
When you make a fire, some fuel burns very well and others not at all.
It is important to pick the right marketing fuel i.e. the methods, the channels and partners.
Business cards, clean uniforms, presentable staff and a good website should be the basics for any business.
Whilst the first two are reasonably easy to obtain, in the days when each and every business owner is bombarded with emails and phone calls promising professional webdesign and 1st page of google ranking, it can be difficult to decide who to trust.
Best is to work with people who have a track record of good web design or can verify reaching sustainable SEO targets before making any engagements. We have used many design teams, and experimented with various SEO companies, so if you like our website and find our content easily at JGID.com, please feel free to contact the team at JGID to find out who does our webdesign and SEO.
As a rule of thumb, the best marketing tools to invest in are channels you can measure, for example your website or Facebook page. Also it is a good practise to always ask new prospects how they heard about you. This will allow you to get a better gage on how much business really comes from SEO and to know how much business comes from referral or the sign writing on your vehicles for example.
Press here if you would like to download our free new enquiry form. Print out a few and keep them next to your phones or in your car, to make sure you or your admin never forget to ask all the relevant questions during that first call.
3: Profitable businesses invariably have their books done by professionals and regularly reviewed by the owners
Bookkeeping is something many business owners don’t like doing, and probably shouldn’t be doing either. It’s simple. Do what you are good at. Hire professionals for the rest. Hire the right bookkeeper and for a very small fee each month you can have peace of mind and don’t risk ruining your marriage along the way.
Thanks to very user friendly cloud solutions like Xero, business owners can have up to date financial transparency via the internet and on their phone. So they know how their business is doing at all times without requiring much IT knowledge at all.
We work with very good and affordable bookkeepers all the time. Press here if you would like to be introduced to the people who do our bookkeeping. They are amazing.
4: Successful, profitable business owners treat their people well and don’t have secrets
This is probably the most important ingredient to success.
Unless you want to work 24/7 until you drop, you will at some point need people who help you. People are what make or break a company.
It is the people you employ who deal with your clients. If you treat them well, they will treat your clients well and they will do their job well.
A thank you at the end of each day, recognition of good work and effort put in, will often go a whole lot further than a pay rise or bonus.
Once people have their financial needs covered, most people will chose their workplace based on the people they work with and the environment they work in.
Build a good culture from the start and you are on the right track. Successful, profitable teams consist of positive and proactive workers.
What holds may businesses back is loss of key team members, but keeping your business finances relatively transparent actually helps prevent that disgruntlement and loss of top performers.
If the team is made aware of all the time, money and effort that goes into Marketing, Equipment, Insurance, Admin, Sales, HR and Accounts, they realise that they are not “the only ones doing any real work”.
5: Successful business owners exchange ideas with and learn from others
Business is about exposure to people, ideas and methods. Every business can improve. The journey never ends.
Methods that might have been efficient a few years ago, might now be antiquated and slow compared to what is available today.
It is easy to get comfortable doing things the way they have been done for a long time, but it is the businesses that continue to improve and change that eventually evolve into successful and profitable businesses. Don’t be busy fools, embrace change and use your team’s experience and ideas to expand into the emerging market opportunities.
Andre Quin, CEO of JGID and advocate for the services of EC Credit Control, is a passionate business owner who has been involved in a number of trades businesses and online start-ups. He has been exposed to and seen behind the scenes of hundreds of trades businesses over the years.
To this day, Andre loves to talk to business owners from any background and makes a point to stay approachable and contactable for anyone. “People call me for advise but every time I try to help, I also learn something myself” he said during a recent interview.
Press here to book a phone call with Andre Quin if you would like to ask any question on how you could improve your business efficiency & profitability or if you would like to simply run an idea past him.