part0005

Either you’re an industrious, hardworking small business owner, or you’re someone who’s looking to establish a new business now, or in the near future. Whichever category you fall into, the common denominator is that you have a vision of how it will develop and an ambition to scale it up so that it provides for you and your family. For whatever reason, however, you feel like you’ve been ‘on hold’ and now you’ve been compelled to make a change in your life. Something has triggered your desire for more; you might feel you’re stuck in a rut in your business, job, or perhaps been made redundant which has given you a sum of money. No matter how you’ve reached this point, you’re passionate about your future business vision. You might be lucky enough to have some funding in place, but even if not, you’re excited at the prospect of what lies ahead in the next six to twelve months.

However, you’re aware that excitement and passion alone are not enough. You know potential roadblocks and hurdles lie ahead and you’re unsure how to navigate them. These may be your own doubts and uncertainties leading to your current indecision, to the extent you’re not sure if you’re doing the right thing at all. As a result, you feel blocked, not knowing which way to turn or whose opinion to trust the most. Family and friends all want the best for you, but their thoughts and advice might not be appropriate, or what you want to hear. You feel lost and hemmed in by these walls of doubt, especially if your business is up and running but you can’t afford to pay yourself, even though you ensure that you pay your employees first while suppliers bang on your door. The vision you once had now seems lost in a fog, or it seems so unattainable you no longer know how to achieve it. The result is, you feel like you’ve come full circle and that you’re stuck like a hamster on its wheel. Various business self-help books have only filled you with scant confidence, as you read about other (especially unicorn) businesses achieving X, Y and Z success. You, however, remain stuck at A, B and C.

The problem is, you’re comparing yourself to potentially unrelated, and unfair, examples against which you measure your own shortcomings. It’s a self-fulfilling prophecy – you’re never going to make it or find the funds to kick-start your own dream. It’s never occurred to you that many of those successful businesses might never have done it under their own steam as you’re attempting to do. The effect of this conflicting, hyper-inflated information is that you’re now overthinking your proposition, without considering your own circumstances. The danger is, you’ll end up diluting it in a knee-jerk response to your fears and self-doubts.

My first piece of advice is, don’t give up. Whether you’re starting out, or you’ve reached a crisis point, or you simply want to know how to grow your business, giving up is the easy option when you feel lost, unsupported or conflicted. When you’re faced with so many barriers, pursuing your dreams under these conditions can feel daunting, as I know only too well. What’s needed is a healthy dose of brutally honest self-reflection.

Firstly, take a step back, even if that feels counterintuitive. Your instinct tells you to spend hours on the shop floor, because you feel the need to be busy (but this is ‘busy fool’ syndrome). Resist that and get away from your normal humdrum existence, remove yourself from all distractions, no matter how hard that feels. You’ll be needing both space and time to ask yourself some brutally honest questions that require equally honest answers. You can’t do this in front of your computer, or from the comfort of your own home – you need to escape all distractions. That might initially come as a shock to those nearest to you, so communicate this clearly with your loved ones, family and friends. Tell them it’s necessary time for you, because any sudden, out-of-character ‘disappearance’ can be unsettling and only increases pressure on them, and you. Even if they don’t immediately fully understand your reasons, proactively communicating your intent is key. Knowing that you have their respect for telling them is one thing less for you to worry about.

Choose somewhere you can go and clear your head in preparation for the questions you need to ask yourself. Get away for the weekend, stay in a cabin or rent a small cottage. This is about making way for clear and conscious focus. When you find that space, you’ll have the time and energy to ask yourself the questions about your business that you’ve been long putting off:

These are undoubtedly difficult, searching questions because they raise your head above the honesty parapet. However, they also remind you about what first ignited your passion and fed your initial excitement. In making time to reflect on your original business vision, if you can honestly say that you’re still hungry and passionate, that’s the reason why you’ll jump out of bed each morning to make it a reality.

It doesn’t need to be the best within the next six or twelve months, or even within the next three years, but eventually its aim will to be the best. Think big and think ahead to the point where you’re capable and equipped to scale up your business, as opposed to running a small business in a small town and standing still. Aiming to be the best at what you do in your county, region or even the world tells you that you have a growth mind-set.

Meanwhile, can the business pay you? Too often, business owners sacrifice their own salary in order to pay others or to honour financial commitments. The business might be breaking even, or making a small profit, but you’re still the one taking the risks. On that basis, determine whether the business can pay you a viable salary within a realistic timeframe (dependent on your own circumstances). If it can’t, then consider changing what your business is, or revising your business plan. Otherwise it’s just a hobby and a potentially expensive one at that. Brutal, I know.

Never underestimate the value of gaining more knowledge and skills – this is an essential element for future success. There’s complete truth behind the adage, ‘You can’t earn more than you learn’. If you don’t currently have a personal mentor to advise you, there are still numerous ways you can expand your knowledge and skills. Often, I hear people say they don’t have enough time to plough through the plethora of online digital resources, such as podcasts and audiobooks, or even to read real books. I dispute that: there’s always time. If that means going to bed an hour earlier in order to get up an hour earlier before the business day begins, then so be it. The truth is, we all have plenty of spare time just walking around, so my advice (and my own practice) is to turn that time into something useful. You need to own the day with an early start and make sure you fill the whole time with full value to you – and I do include good sleep in that equation. The brutal fact is that most of us waste most of our time in our days with things that don’t help us grow as people. This is fatal for a business owner who’s wanting to grow.

Personally, I consume a wide variety of educational and informational podcasts from when I get out of bed at 5:00am until I arrive at 7:30am, and the same on the way home. As a result, I achieve an extra four to five hours personal growth each day without doing anything differently. That equates to at least twenty hours per week learning. Those marginal gains add up and the results flow into my days, my plans and my leadership. I’ve discovered that by changing how my day is structured (early to bed, early to rise) I achieve much more. I try to focus on income-generating tasks during regular business hours, and deal with emails later in the day when there are less distractions. I’ve also learned to be more patient and reflective, and not to make decisions based on emotion. Learning something seemingly small, such as saying ‘please’ and ‘thank you’ more often, also keeps the ego in check and I then find that people I work with are more responsive, giving and productive. That helps makes any business more successful.

I now realise I had the start of a growth mind-set as far back as 1989. I had just returned to UK shores following an eight-month deployment to Brazil. During that time, I’d been constantly thinking about what exactly I wanted to do with my life. I knew my future didn’t lie long term in the Royal Navy, or at sea. For some reason, after I’d seen Wall Street on board ship, its theme resonated with me, and it triggered my entrepreneurial gene. When I eventually returned home, I became curious and then obsessed about people’s shopping habits and asked myself, ‘Why do we spend so much time driving to the supermarket? There must be a way to bring the supermarket to people.’ At that time, I was a junior rating and not exactly earning a huge wage and so I had little money to fritter away in the bars in Southsea. Instead, I invested in a notepad and took to wandering around supermarkets noting how much stock they carried in dry goods, and fresh and frozen foods. Inside my head, the germ of an idea was growing – I was mapping it all out because I wanted to replicate what the supermarkets provided by offering a home delivery service where customers would phone in their orders. Bear in mind this all predates the onset of internet shopping as we now know it, but at least my instincts were proved right. I didn’t have the experience, knowledge or resources to take the idea forward, but my entrepreneurial juices were flowing. In theory, I was a ‘disruptor’, even though I didn’t yet know the significance of that.

It was as if a safety seal in my mind had been broken. I’d been brought up in a tight and disciplined environment. When I left school I immediately went to sea. Hence, I’d always found myself governed by the strictest of rules. Watching Wall Street , then teaching myself about the retail world, prompted me to ask, ‘Why do I need to follow what everybody else does?’ That innate connection to my sense of individuality is one of the reasons I’m in business today and it’s that same mind-set that’s always helped me through periods when I’ve felt stuck. I know that deep down, I’m a disruptor who wants to make a change, and a difference, in the marketplace. That early desire to disrupt, as I now know it, stemmed from having a growth mind-set developed through learning.

It’s not good enough simply to say, ‘I don’t know’ because with a little effort on your part, you’ll soon gain insights to each of the above through carrying out research. It’s time well spent in understanding where your business sits. Even if you discover that your market share is 0.01% you then know you’ve got 99.99% of the market as a possibility. If, on the other hand, you are completely stagnant and not making any money at all, then it’s time either to try and change the market, or to get out of that market completely. Knowing the competitive landscape and how much of a share you occupy will answer your questions, one way or another. Therefore, learn and discover as much as you can about your competition.

It’s not such a labour-intensive exercise as it was for me back in 1989, because there are so many new tools available at your fingertips. Obviously, internet search engines and Companies House records are immediately accessible and fantastic resources to begin with. However, there’s nothing as good as simply picking up the phone, posing as a potential customer and listening to your competitors’ sales processes, or even visiting their premises, especially if you’re involved in retail. Seeing your competition in action first-hand can provide you with useful information, but ensure you return on different days and at different times to observe customer footfall variations and look at what they’re buying. If your business happens to be fish and chips and your premises has only three customers on a Tuesday night, while two streets down they’re queuing out of the door, you’ll soon learn what the competition’s unique selling points are. Don’t be disheartened by what you discover; instead, view this as an opportunity to learn and grow your own market share. Ask the people in your competitor’s queue why they think this is the best chip shop in the area. It might be nothing more significant than its location, on an estate or outside a factory, and little to do with the quality of the fish and chips. Collate all the information in a matrix or a spreadsheet that you can revisit and update. We’ve used a competitor matrix on many occasions to position ourselves outside the reach of our competition.

Your customers are also part of your knowledge bank, so ignore them at your peril. I’m still surprised to discover business owners who don’t look for customer feedback. Their input is essential to your growth, as it’s through them you’ll discover where you need to add more value or improve your offering. It might result in having to invest more in producing/distributing your products in return for a lower margin, but if your volume turnover increases, your profit will too, and this will enable you to scale up. The hard truth is that what prevents some businesses from growing might just be the fear of actually growing and what will happen if they grow too quickly, taking them into uncharted territory. They’re scared that something’s bound to go wrong.

No, I’ve not printed a line from an algebra textbook by mistake. Instead, it’s a prompt point to ask yourself, what’s your unique value to the customer? If you don’t already know, look at the question from your customers’ perspective: ‘What’s in it for me?’ (or WIIFM, as I call it). Translated, that means: are you providing unique value? This leads to another key question, ‘What persuades your customer to purchase from you? Are you FMOB?’

The FMOB test helps you identify what differentiates your points of unique value. Now run your findings through the SFW indicator (So f*****g what?). It’s a surprisingly useful test that I often use, and you’re probably wondering how to apply it. Let me explain using my fish-and-chip shop example. If yours is the only unit that serves its chips in blue polystyrene boxes, that might not pass the SFW test. If, on the other hand, you only fry using a certain oil that’s tasty, but is also healthier, that would pass the SFW test because it differentiates you from the competition, attracts custom and provides unique value.

I often wonder what would have happened if brands, such as Kodak or BlackBerry, had put themselves through the [WIIFM + FMOB + SFW] test. Kodak, for example, never seemed to grasp the brutal fact that digital imaging was emerging as a dominant market share, despite the fact they’d actually invented it. If Kodak’s executive team had taken itself away for a weekend, as I described at the beginning of the chapter, and been ruthlessly honest about their product and changing consumer trends, the brand might have long survived and dominated. The fact they owned the intellectual property (IP) in the technology meant they could have uniquely differentiated themselves from the competition and gained market dominance. Similarly, the leaders at RIM Technology (owners of BlackBerry) lost sight of their mainly corporate customer base preference for their products. In attempting to compete with Apple’s sexier, shinier iPhone (more geared towards consumer tastes) they seemed to abandon all that was unique about their product. That strategic decision, or the lack of applying the [WIIFM + FMOB + SFW] test, killed them.

I’ve learned from experience that asking myself difficult questions is both valuable and productive. When the infamous credit crunch of 2008 hit, many business owners, myself included, were forced to ask some deep and searching questions. I took myself to a country hotel on the Northumberland coast and spent the weekend walking the beaches, going over and over those brutal questions, while trying to work my way through the answers. At the time, the business was highly profitable and growing fast (we’d been in the UK Fast Track 100 a couple years earlier) with just under £6m turnover per annum, and with a future order book equivalent to roughly the same amount. Much of the business relied on orders from shipyards based in the Far East, but within the space of a week those orders had been cancelled, leaving us with just under half the £6m we were expecting. Within a month, those orders were barely worth £500k. All incoming emails slowed to a trickle and the phones stopped ringing almost overnight because the whole industry, based on the finance sector supporting the building and purchase of ships, had been severely impacted by the global economic crisis.

Only by facing brutal facts head on could we find the solutions to our problems. There were no easy answers, and we knew some hard decisions were being forced upon us. We needed to act quickly. Immediately, we suspended all directors’ salaries and, unfortunately, we laid off 20% of our workforce. We also placed the whole business on a four-day week, to be reviewed in three months. Fact-facing and acting decisively on the outcomes, we avoided those ‘salami cuts’ that saw other businesses slowly disappear. Because we faced the brutal facts with honesty and without ego, we acted decisively and managed to save the business. Within three months, we’d returned to a five-day week.