Owning a successful business
Everyone dreams of owning a successful business. Aspirations of financial independence, security and satisfaction are not a bad thing. But the truth is, effort is needed to make a sandwich, never mind run a business. Different things drive different people but one thing is certain, effort is unavoidable if you really want to run a profitable business. While you can’t avoid the effort, you can handle the effort if you have the following qualities:
Before you hatch an idea, before you plan your budget, before any aspect of setting up a business, you need to have one thing-self assurance. You need to believe in yourself. Doubts are natural but they shouldn’t weigh you down. Fear of the unknown affects top earning CEOs and small business owners alike.
What separates productive entrepreneurs from mediocre businesspeople is the ability to overcome those fears. Richard Branson doesn’t waste time wallowing in doubt and neither should you. Are you going to make mistakes? Of course you are, who doesn’t? Will you give up at the first hurdle because you don’t believe you’re good enough? How can you overcome anxiety?
- Learn What You Don’t Know Until You Feel Confident.
- Don’t Be Afraid To Implement What You Learn, Even While You’re Learning.
- Ask For Help, People Want To Help You.
- Look For A Mentor.
- Every Day, Tell Yourself, You Can Do This!
PragmatismMany of us are idealists but we need to be pragmatists. What is pragmatism? According to one popular definition, it means:
In short, don’t be a dreamer. For your business to grow, you need to know practical methods that really work, not pie in the sky ‘hacks’ like the ones you see in Facebook ads promising to ‘generate thousands of leads’ or ‘10x your revenue’, avoid such promises like the plague, they are nothing but empty promises from charlatans who want to take your money.
Look for practical advice on sites like the UK Business Forums where you’ll find real business owners who know the advantages and pitfalls of whichever market you plan to go into. A pragmatist is a realist, they don’t suffer from overambitious delusion, they don’t despair when things go wrong. Perhaps another way of putting this is you should be ‘thick skinned’, failure? Water off a duck’s back, let’s move on and try again, see what works this time.
ConscientiousnessThis is the age of self help ‘gurus’ and pseudo psychology. While it is advisable to take most ‘self help’ with a pinch of salt, you can learn from some of it. One such quality that falls under business psychology/self help is conscientiousness. According to an article by Drake Baer for Business Insider (30/04/14):
- Set realistic long range goals and stick to them.
- Don’t act on impulse.
- Be clear with your clients to avoid false expectations.
- Deliver on your promises.
- Make considered and well researched business choices
- Define your goals
TenacityThe Oxford Dictionary defines tenacity as:
If you don’t strive to be the best, you won’t even get close to being the best. The lives of all of history's great heroes in all walks of life can be condensed down to toil, sweat, grit and resolve. Nelson Mandela never gave up, Emmeline Pankhurst kept up the fight and so should you.
Tenacious entrepreneurs persist and persevere. They stay on top of the game. They keep a watchful eye on their competitors and aspire to outdo them. They stay focussed when they’re tired, sick or overwhelmed and they don’t lose sight of their goals, even when it hurts, even when they feel like giving up.
Remember, you’re a business ninja, keep in mind the following description of ninjutsu black belt and professional bodyguard, Roger Stebelton from the March 1987 edition of Black Belt magazine:
Achieve The ImpossibleDo these phrases sound familiar? “There’s no way it can be done”, “You can’t do it”, “That’s impossible” Do you feel deflated and dejected people yell you it can’t be done? Keep away from such negativity, you’re not trying to defy the laws of gravity, you’re doing something people have done since the dawn of time, you’re doing commerce. More than ever, it is imperative to think out of the box if you want your product or service to out perform the rest. Be innovative and open to change. Alyson N.Griffin, writing for entrepreneur.com explains why ‘Successful People Always Chase the Impossible’
Vitality, vim & vigour. You will need plenty of it to get through the daily upkeep of your business. You will be generating leads, dealing with clients, working on tasks for those clients and staying on top of expenses. The finances can be a hassle and impede your work so if you can, hire an accountant.
Free from the hindrance of maintaining financial records by yourself, you can dedicate your time to the important stuff. Asides from the obvious benefits of freedom to concentrate on your work, hiring an accountant ensures safety from mistakes with your finances and getting late with tax returns.
Get-up-and-go is an essential quality for endurance in the work environment. The ability to deal with unhappy and potentially unpleasant clients requires a do rather than defer attitude. Put the annoyance you’re experiencing aside, make that client happy, make sure they come back for more work from you.
Have a routine in place to balance your daily tasks, prioritise them and get them finished on time. Plan for those moments when chaos ensues. Be ready for a backlog or extra workload. If you’re genuinely overwhelmed with your tasks, consider hiring a virtual assistant to manage your diary and carry out work on your behalf.
The nature of your endeavours will dictate what kind of routine you can expect on a day to day basis. Are you prepared to balance ever changing priorities in your work day? Have a strategy in place to cover all eventualities. Look for online diary examples and productivity guides for inspiration. Some helpful tips can be found in the Lifehack article ‘15 Ways To Stay Focused At Work’ which include;
- Always find what you do inspiring and fun.
- Get your work station organised.
- Make a daily “to-do” list.
- Organise your Emails.
The best way to organise emails is to set times for checking and stick to those times. Mark any important emails you can’t respond to straight away as ‘unread’ and allocate a time to answer them.
As much as its important to optimise your productivity, the right amount of downtime is vital too. If you’re burned out, you’ll do poor quality work, make mistakes and lose clients. Even top CEOs need a break as attested by research in the firstround.com article ‘ 70% of Time Could Be Used Better – How the Best CEOs Get the Most Out of Every Day’ The article states that top CEOs set up their morning to do the most creative projects. Mornings are the most optimal times for most businesspeople but if you’re not a morning person, don’t worry. Work when you are most productive and rest in between to avoid burn out.
It must be emphasised that high quality service products and services are always in high demand. If you fit into this category, you can expect to earn a healthy profit. You can also expect to be busy. Money never sleeps but you need to. You need a healthy work-life balance especially if you have family (they will make you choose between them and work if you don’t choose yourself).
If you’re able to strike the perfect balance between business and loved ones, you truly are a ninja! This still leaves you with some obstacles to get over. Let’s say you are in a prosperous position with your business, the bank account is looking good, all is well. Just when everything is cosy, a letter from the HMRC lands on your welcome mat and you heart transplants itself into your throat. Benjamin Franklin is alleged to have said:
Whether he really said this or not, it rings true. If you’re making a nice earner, the HMRC will come after you, it’s their job. Hire a reputable accountant, let them deal with the tedious task of finance management and tax reporting, you just enjoy your money.
Invest some of your hard earned money in employees to lighten your load and retain clients. You can have the most Get-up-and-go conceivable but you will never be able to keep going solo if your sales are skyrocketing. Do yourself and your business a favour, get help!
Take ResponsibilityNobody likes this one. Nobody. “I accept the blame for this” said no one, ever. Well, maybe that’s a bit of an exaggeration but it can’t be denied, owning your mistakes is not easy. Ninjas are fallible just like other human beings, you will slip up, you will get it wrong from time to time. It’s a lot easier to take responsibility if you are humble. SEO ninja, Neil Patel writes about ‘10 Mistakes You’ll Make When Starting a Business’ for his site, quicksprout.com. The article is a must read for anyone starting up a business. It contains some cold truths worth pondering over, such as:
When you mess up (and you will mess up) and an angry client is berating you in a caps lock email or an angry phone call, take a deep breath, then ask them how you can fix the problem. Like Neil Patel says, don’t let your emotions lead you in situations like this, put your business first. Many a company has suffered irreparable damage from bad PR because a company rep or even worse, the boss themself lashed out at at a client.
If you feel yourself getting angry at an irritable client, ask them to slow down, explain that you need to hear them properly so you can fix the problem. Alternatively, ask if you can call back, just make sure you do call them back when they ask you to and call back with a clear head. Tell yourself repeatedly: ‘I need to do what my customer wants as they are paying for my service’, if you lose that customer, you lose them to a competitor. If your competitor does a better job than you, you have lost that customer for good and you have lost profit. There is no shortage of competition out there so when you make a mistake, own it and fix it straight away.
Be OpportunisticHere’s an awesome quote about opportunism:
One word leaps out from the above quote-’ unprepared’, preparation is crucial if you want to ‘strike while the iron is hot.’ Lets say you are a brick and mortar retailer. You are aware of the sharp drop in physical shopping and the increase in high street retailer shop closures. How will you prevent your shop from closing? Can you even make a profit in such a turbulent market? The only way to find out is to diligently read up to date information on marketing trends in the retail industry.
Do you notice any emerging trends? Maybe you could run an offline Etsy style store by sourcing hand made decorations that customers can view in person. You could use social listening techniques to learn what retail products people are posting about on Facebook, Twitter & Instagram. Or you could conduct research into which social media platforms your target audience favours. If your ideal customers are mostly on Pinterest, set up an eye catching Pinterest page, make it the digital shop front for your physical one.
Whatever your niche is, put time aside to conduct daily research. Some services are evergreen, people will always need utilities for example but there may be a shift from common energy sources to renewable energy, maybe you could profit from switching to renewable energy if you are a gas/electric provider. If you provide financial services, you need to stay updated with important changes in legislation like GDPR law. Those who are quick to react to trends always have an upper hand in the market, they are opportunists. At the very least, by staying up to speed with new developments in your chosen profession, you have the chance to influence your existing customer base before someone else does.
Confront Your Fears And Obstacles
To conclude, we return to a previously mentioned point. Change is a constant, industries change, markets change, trends change and some trends die out, never to be seen again. This isn’t as disastrous as it sounds, the fact that industries and markets change is a testament to their longevity. Of course, these continuous changes present new obstacles. This can cause anxiety and fear of failure for some. A positive, entrepreneurial mindset is critical to tackle such fears. You can either stick your head in the sand or you can ask, inquire and learn, the choice is yours.
Those who made it to the top of the ladder got there by confronting fear and doubt. Don’t let the fear of failure hold you back. We have all heard the saying “When one door closes another opens”, what most of us don’t know is who this phrase is attributed to. This saying is credited to Alexander Graham Bell, the inventor of the telephone, no less!
Every fruitful business is the result of a solid business plan, plenty of creativity and properly accounted finances. There is no cause for fear, help is available every step of the way. You can look up business plan templates online, take a business degree or contact your local chamber of commerce. As for the finances and the dreaded tax, an accredited accountancy firm can alleviate that fear for you. Adopt the qualities mentioned in this article and you’re already halfway to becoming a business ninja!
Business Is Booming, Now You Need To Get Some Help
You have attained business ninja status, the orders are coming in thick and fast and the money is rolling in. That front page of your website is full of glowing testimonials from happy clients. You’re on the rise, well done! So far, you’ve managed to run a tight ship, everything is in order, but as your business continues to grow, so does your workload and you only have so much capacity to handle it.
To ensure that growth continues, you need to invest in a support structure. You’re going to need help with those accounts and an extra hand or two on board to assist with the overflow of requests for your services won’t go amiss. It’s time to get yourself a team of ninjas to make sure you stay on track and the cash flow doesn’t dry up. Winston Churchill is alleged to have said:
Let’s not dwell on who actually said this statement, let’s focus on the universal nature of the statement and how it applies to the workplace. Companies are born from the efforts of individuals like Jeff Bezos (Amazon) and Pierre Omidyar (ebay) who built e-commerce giants from their garage (in the case of Bezos). Perhaps it time for you to expand your horizons too. Home or even a small office space is fine for a bit of freelance work.
You can conduct consultations via Skype and Go To Meeting but the top consultation firms don’t operate out of their spare room! Once you have built a solid client base, its a good idea to consider professional appearance. Despite the existence of messenger and video conferencing apps, people still like to meet face to face.
Imagine that you have attracted the interest of an angel investor who is willing to inject a considerable amount of cash into your service or product. They read your proposal, now they want to meet you in person. A smart office is a no brainer here, it sends a positive signal, it gives the impression of authority-it tells your potential investor, you are serious about what you do.
Is It Time To Form A Company?
It makes sense to fly solo when you are still finding your feet. It’s entirely possible to build a fantastic business from the ground with zero budget and limited assets. The best entrepreneurs are those who started out with nothing. Believe it or not, WhatsApp CEO, Jan Koum was a poor Ukrainian immigrant to the US, after Facebook acquired WhatsApp, Koum’s net worth skyrocketed to a staggering US$9.7 billion.
Oprah Winfrey’s net worth is estimated at $2.9 Billion and she could well be the next US president yet she came from humble beginnings in a poor Mississippi family. Still not convinced? How about George Soros? Soros fled Nazi oppression in 1947 Hungary. He arrived in London where he used his meagre earnings to attend the LSE. Today, Soros’ investments have given him an estimated net worth of $25.2 billion. Forbes listed Soros as the 19th richest person in the world in 2017.
It’s true you don’t need an office or staff when you are starting out. But you will need both if you get good at your business. Once you reach this stage, you have a few options.
If you do work in the UK, you fall under one of three categories in most circumstances: Self Employed, Worker Or Employee. When you set up a small business/enterprise, you will normally be considered self employed as a sole trader or an independent contractor. www.gov.uk defines self employment in the following terms:
As an independent contractor, you can work for more than one client and you can hire other people to do the work. You agree the price for work undertaken, your hired help is responsible for their own taxes.
You could hire independent contractors as remote workers. Using Slack, Skype, Email and good old fashioned phone calls, you could assign work to your workers and collaborate with them in real time. Meetings could be done through telecommuting or hiring a room every now and then. The obvious advantages of employing this system to allocate tasks include not bearing the responsibility of tax deductions.
Virtual assistants are easy to find through sites like Fiverr and People Per Hour, you can look at their approval ratings online, read what others say about them and check examples of their work. There’s nothing wrong with doing things this way, it can be very effective, especially if most of your business is within the digital realm. Hiring virtual workers can be cost effective and efficient if it’s a good fit for your business model.
As your business grows, you might want to explore different options such as a partnership. Should you go into a partnership, you will need to register with Companies House as a limited company, limited partnership or limited liability partnership. Be aware this is a big step up from sole trader/independent contractor status and the HMRC will be keeping a keen eye on your financial records.
Limited companies are regarded as separate legal bodies which means your personal assets remain safe in the event that your company ends up in the red. Any debts incurred in such a situation will fall on the shareholders and directors. Even then, shareholders are only obliged to pay up to the value of their shares.
The laws surrounding limited companies are complicated and confusing, it’s easy to turn a blind eye to them hoping you will never have to deal with insolvency or a tax audit/investigation. If you are fully committed to becoming a limited company, it would be wise to acquire the services of a trusted accountancy firm. For both limited companies and limited liability partnerships, there is a much higher level of transparency and accountability. While there are some perks like favourable taxation and more security against loss, it’s a question of whether those perks outweigh the potential hazards you may face if things go wrong.
IR35 Rules: Paying Yourself As A Contractor For Your Company
As a sole trader, things are fairly straight forward, clients pay you for work undertaken. But how do you deduct a wage for your work in a limited company? Companies pay employees through PAYE (pay as you earn) or through ‘off-payroll working’ (IR35). You can register with the HMRC to set up and administer a PAYE payroll system but do remember, this means taking the responsibility of recording employee details, calculating and recording pay and deductions and reporting all of this to the HMRC. When most busy sole traders have an accountant, it would far better if your company has one.
IR35 applies to you providing end services to clients through the intermediary of your company. You still do the work but pay is made to the company and you deduct a wage from it, effectively you give yourself a salary. The purpose of IR35 is to ensure NICs and income tax is paid without any ambiguity regarding the status of completed work. If your choose to pay taxes through IR35 status, your company can claim admin costs as business expenses, asides from this there is little if any difference to the outcome whether you choose to employ yourself through PAYE or under IR35 rules.
What’s important here is that you are 100% clear about your role, are you a company director? If so, declare you are the company director and you work for your company, don’t attempt to pass yourself off as an employee to try and claw back tax money. The HMRC will investigate you if they have any doubts regarding your role within your company. And yes, to run a limited company, you do need to have a director.
Get An Accountant To Set Up Your Limited Company.
Having read up to this point, you may start to feel a headache. All that work? All that effort? All those sleepless nights and anxiety filled days? How will you manage the transition from your freelance status to limited company while managing your workload at the same time? The good news is, setting up your company won’t take a lot of time. You can register online with Companies House and have a business bank account set up in 24 hours or less. You will also need to register for VAT and corporate tax with the HMRC. Accountants offer ‘formation packages’ where they set up your company for you.
Not only will they set up your business, they will also handle payroll and taxes on your behalf and act as your business advisor. This could be a viable option as you will get instant and ongoing support with tax management, freeing you up to focus on growing and developing the actual business side of things without undue stress and burden. The fees for formation packages are not only affordable, they ‘pay for themselves’ by taking the prickly task of record keeping off of your already busy shoulders.
This might sound like fluff designed to scare you into hiring an accountant but that’s not the case. The are many factors to consider if you are going to upscale from a small operation to a medium or large one. The nature of your services offered is something else to consider as is how you carry out work and who does the work for you. According to the degree of specialisation involved in your profession, you may be subject to complex regulations regarding tax. If you specialise in something, you need a specialist accountant who understands your specific operations and how they affect your tax status.
The more niche your market is, the more inherent risk it may carry. For example, you have this great start up initiative of mail order snacks but you need to get a grasp on your expenses like the VAT on packaging and all that nice exotic dry fruit you’re importing, this is where a specialist accountant can provide expertise.
Asides from lovely dried dragon fruit and baby coconut slices with plush packaging, there is storage, transportation, distribution and a number of other factors that will play into tax and expenditure. Your accountant should be experienced, knowledgable, tech savvy and up to date on important new legislation. It goes without saying that they should conduct your taxes in a timely an efficient manner and the easier they are to reach out to the better, online and offline.
We have covered some considerable space on the tax side of things, lets take a breather from all that number crunching talk and dive into another essential aspect of business development-planning.
On the surface of it, the idea of some long drawn out plan sounds tedious, right? You’ve got this great idea, people are going to want to invest in it. You’re going to get on the internet and market, market, market. Jokes aside, it’s plain and simple common sense to have a plan in place. Who is your target audience? How and where will you sell this service? This is just the awareness stage I.e. the short term plan, what about the long term projections? How will you cope with changing trends in your industry? How will you adapt to these changes and what new services can you add to the existing ones?
Adapt Or Die
How does an established and successful business adapt? One way is through research and development that leads to new processes and discoveries. This could translate into something as familiar as a regular survey sent out to clients. You could place the survey on your website and social media and even invest a little in paid online ads to gather valuable data that leads to the next big breakthrough.
Adapting to change could also mean embracing new technology. Do your customers obsess over new apps and social media platforms? Are they looking for ways to make a deeper connection with your brand online? Could you design an app that connects people to your business? Would adopting social selling techniques bring a bigger return on investment?
For a little experiment, head to Instagram and type #lumber into the search box. At the time of writing, this hashtag brings up 175,487 posts consisting of images and video. It might not seem a lot but some of those images have been ‘loved’ 304 times. It is interesting to note the following observation from the ‘Logging-US Market Research Report’ (February 2017, www.ibisworld.com)
There’s a podcast for pretty much everything these days. No surprise then that a Sawmill Business Podcast exists and has been sharing stories of logging and lumber entrepreneurs since July 2016. You might not have much interest in logging or timber but these podcasts are worth a listen.
Discard the image in your mind of big burly men in checked shirts hacking away at trees. As you listen to the fascinating and insightful interviews on this podcast, you will get to know people from the tech industry, former bodyguards and other professionals who now work in the sawmill business. And guess which popular social media platform comes up again and again in discussions around marketing. That’s right, you guessed it..Instagram.
Plan, And Plan Together
Peter Ferdinand Drucker was a university professor, management consultant and a writer. As far back as 1966, Drucker was mastering the art of click bait headings like the title of his book ‘The Effective Executive: The Definitive Guide to Getting the Right Things Done’. Like the professor said, you need to commit to a plan, a plan that evolves.
If you’re going solo, you need to take time to plan out your day, plan out your tasks, plan out when and where you will have some down time. If you’re part of a partnership, you need to sit down with your partners, assign tasks and discuss ways to move the business forward. Use these meetings to set and revise key performance indicators, allocate budgets, evaluate past performance and any other essential matters.
Marketing: The Key Ingredient To All Good Business Plans
Part of your plan is your marketing strategy formed on the basis of your marketing analysis. Where are you going to generate leads is the question you need to be asking as you devise this strategy. How will you promote your service and which channels should you focus on to deliver your message.
Earlier in this article, mention was made of social selling. Hubspot defines social selling in a single paragraph:
For you, this could mean a well managed blog or Facebook/Twitter/Instagram page that solves problems for your potential clients. The act of social selling serves a double purpose of attracting clients and collating data to help build up buyer personas/customer avatars.
You need to plan how you’re going to outmanoeuvre the competition. For this, do some competitive analysis. Something as rudimentary as a google search for [market] [location] will bring up all the local businesses in that industry with a first page Google ranking. For example ‘social media management birmingham uk’.
Whatever the industry, you will find the top ranking websites have well positioned, well written text, a good user interface and popular keywords related to that industry. You will also notice there is little variation in the text on these websites, they all seem to say and do the same thing. Those businesses may be early reactors to an emerging trend or they are at the advanced stage of the business life cycle whereas you are still at the informed phase of this journey.
You can learn from the best by observing what they do well and finding your unique selling point. It’s not necessary that you do something radically different from your competitors (if you can, that’s great), maybe you can do the same work but more cost effective or with a quicker turnover. Otherwise, you could think out of the box and try some old fashioned tactics like dropping leaflets through the doors of local shops encouraging elderly shopkeepers to add a digital front to their brick and mortar shop floor. Adapt your plan and plan to adapt. Revise, rinse, repeat.
Running and growing a business looks easy on the outside, it’s not! But the reward is great, not just in terms of monetary gain (although it is nice to make money!) but for the sense of fulfilment it can bring. It’s a wonderful feeling to know you deliver a service that brings happiness to peoples lives. The recognition of being a leader and an innovator in your field is a reward in and of itself. To get a good head start in your aspirations, you should:
- Plan Out Every aspect Of Your Business In Advance.
- Learn The Requisite Skills Of Your Chosen Niche Until You Feel 100% Confident.
- Get Help!
- Get Your Finances In Order Before You Even Start.
Now go forth, business ninja and conquer!!!