I recently had occasion to celebrate 10 years of running my own business. I thought back to some of the business lessons which I have learnt over the decade, and decided to write them down. I trust that they will be of value to other small business owners as well.
1. A business plan helps, but needs to be updated
When I started my law firm, I had very specific plans, but things soon turned out differently. Where I planned to go, and where we are now, are two totally different places. Yet, the plan is important, as it focuses attention on what is necessary to make the business successful. Update it regularly to keep the focus.
2. Build relationships with stakeholders
This is surely one of the most important aspects in our firm. When problems arise, these relationships help greatly in resolving those problems.
3. Adapt to clients’ needs
We tend to think that we know and understand what our clients need, but this is not necessarily the case. Often, we were able to tailor-make our services to adapt to a specific client’s needs. In this way, we were able to retain clients who would otherwise have moved their business elsewhere.
4. Focus on service, not income
When we focus on getting the work entrusted to us done properly, the income will follow. We have learnt that if the work is done, the income is there, but when you start focusing only on work that produces high income in the short-term, service levels drop, as you are no longer willing to walk that extra mile.
5. Cash is king, profit is less important
This is a cliché, but it is very true and extremely important: without cash in the bank, the business is doomed. From day one, manage the debtors’ book, and do it religiously: it is easier to learn how to do it when monthly income is R40 000 rather than only when it is R400 000, and bad habits have been formed.
6. Save for a rainy day
Once again a cliché, but also very important: every month, put away the cash you don’t need immediately. In this way you earn better interest, and you also build a nest-egg for the day that you need to spend money on expansion.
7. You need money in order to grow
In order to grow any business, you need to invest, i.e. spend money, in growth. This may be in the form of equipment, premises or staff. The point is, without spending money on these issues, you will not be able to grow. And if you do not grow, you stagnate and eventually move backwards, as the competition will move ahead of you.
8. Know when to stand firm and when to let go
Clients, employees, service providers will all come with requests from time to time, be it for increases in salary, reductions in fees or better terms. For this, you need to know and understand your budgets, so that you will know the impact of a potential decision on the finances. This will help greatly in making a decision.
9. Think lean
No matter where your business is in its life cycle, always consider where money may be saved, as, in the end, if you waste money, you are wasting your money!
10. Live according to your beliefs and values
Lastly, but most importantly, write down the business’ values and see whether the team works according to those values. When hiring new staff, make sure that they agree with your business’ values.
