BOY FROM BEHIND THE PRISON MAKES GOOD
I'm probably just like you! Like everyone in life I've had some ups and downs. I've grabbed and made the most of some chances and let others go. I wouldn't say I came from a poor background, but it wasn't a wealthy one either. Growing up, I lived behind (not in!) Edinburgh's Saughton prison in a council house.
I've learned over time that what's important to me is my family (2 grown up kids), my wife (married since 1998) and my health. Added to that, I'm passionate and interested in business - my own and other peoples. And I like to watch a bit of rugby and enjoy a beer (or two).
Wealth to me means having the financial freedom to make the choices I want without having to think too hard about the financial consequences.
I always dreamed of having my own business, but the earlier part of my life, took me further and further away from that. I went to the local state primary school, but had a teacher and headmaster who recommended that I try for a scholarship to an Edinburgh private school. I was lucky enough to win one and as a result was able to attend one of the top academic schools in Edinburgh. The focus was very much on maths, english and science with the natural route seeming to be university and then a professional career in medicine, law, accountancy, banking or something similar. There was no career guidance for starting a business.
16 years in industry left me higher up the career tree, but further away from ever having my own business as personal commitments were growing to match salary increases. The risk of giving it all up seemed to be higher every year.
What I hadn't clicked on to at that point, was that working for a business where someone else is making all the decisions that can affect you, is just an illusion of security. Your only a decision from a boss or a boss's boss, away from a redundancy, a move to somewhere you don't want to go, a move into an area or function you don't want to be in, or something else.
In my case it was a move to the other end of the country, to take on a role that was less interesting, at a grade and salary that would be frozen for two years and which was more than 400 miles away from my family and friends.
No thanks! Suddenly, setting out on my own didn't seem to be such a big risk.
That was in 2004 and I haven't looked back since.
WHAT I'VE LEARNT IN BUSINESS
Anyone who has been in business for themselves has a story to tell. Something has driven them to it and no matter how large or small their business, or how successful they judge themselves to be, or other people judge them to be, they will have learned a lot. A business coach once told me that the best form of personal development was to start a business!
I've had some successes in business and also some things which haven't gone so well. You could call them mistakes, or opportunities for learning! The whole purpose of this site is to pass on shared knowledge so that you can avoid the mistakes that others have made, or take shortcuts by using the successes of others to guide you on your own journey.
So here's my top 6 tips based on my own experiences:-
1. A great technician doesn't automatically mean a great business owner. Just because you're good at something, don't fall into the trap of thinking that'll make you great at running a business in that field. The skills are often very different. I was a pretty good accountant (CIMA New Management Accountant of the Year in 1997 no less) and thought that would equip me to be a great accountancy business owner. I'd like to think I'm getting there, but with hindsight, I didn't have many of the skills to run a successful accountancy business - limited marketing ability, no formal sales skills, poor delegator, too focused on doing the work rather than organising others to do the work, and the list goes on......
This holds true for lots of business owners - being a great chef doesn't immediately make you a great restaurant owner; being a fantastic barista doesn't mean you'll be a successful coffee shop owner from day 1; being an expert consultant in your field doesn't necessarily qualify you to run a successful consultancy business. But the good news is that these skills can be learned. Have a read of Michael Gerber's the E-Myth. He explains it better than I can.
2. Keep investing in yourself and your team. As an accountant, I've got to undertake continuing professional development (CPD) to keep my technical knowledge up to date. As a business owner, no one is telling me what skills I need to develop or how to get them. That's on me. I'm often amazed at how easily some people will part with a few thousand pounds for their website, but will go ashen faced at the thought of spending a few hundred pounds on self development or team training!
3. Get a coach. I've benefited from some great coaching relationships over the years. I wish I had taken them on earlier in my career as a business owner. In my experience, if you use a coach they can help you to achieve your goals - not by doing, but by helping you to prioritise what's important, to get you focused on working on the priorities and holding you accountable to yourself. It's taken for granted in sport and yet in business I often see the value of a coach being questioned.
4. Take responsibility - there is no one to blame but you! As an employee, when things aren't going your way it's easy to deflect the blame - it's your boss, it's your co-workers not pulling their weight, it's your team who aren't up to the job. Well that doesn't cut it when you own a business. Whatever it looks like, it's you that has fashioned it in your image! If you don't like what you've got, it's up to you to change it. There's no passing the buck - it stops with you.
5. Really think about your pricing. If your business model is to be a price leader and be the lowest cost in your sector that's ok. But you have to have your business set up to do that. If you're competing on price, but don't have the cost leadership then your quite possibly going to end up in a downward spiral of declining margins, lower profits, working harder to stand still and frustration. It doesn't have to be like that. If you spend time really understanding the relationship between your products and services and the cost to produce them, you can make better decisions. Price is only one element of the marketing mix, and not everyone wants the cheapest price. If they did, then how come we're not all drinking instant coffee from the local cafe rather than Starbucks?
6. Use management accounts. I don't think any business is too small to have management accounts. If you're running your business without them, you're probably running on gut feel, your sales numbers and your cash in the bank. To me, that's a bit like your bank or credit card company not sending you a statement, but only telling you what your balance is. If your financial systems can't show you whether you are making or losing money, whether you are growing or shrinking, what your cash needs are and what your tax liabilities are going to be, then how do you know if you are doing the right things? If you are losing money, selling more could be making things worse!