Five essential business tips

Simon Sharwood, editor of My Business magazine. Picture: Supplied
Source: Supplied

AS the editor of My Business magazine, I talk to a lot of people about how to build successful businesses. I’d like to share the top lessons I’ve learned.

1.      Plan your exit from day one

Some people go into business to replace a job. That’s the wrong attitude, because what’s the point of buying yourself a job when business is riskier than being on a salary? And why treat it as just a job when being in business is a chance to build wealth?

Always be thinking about how you might one day realise value by selling the business or the methods you have developed, franchising it or licensing your intellectual property. If you think this way, you’ll build value, not just pay yourself a wage.

2.        Find a way to do what your customers want

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A few months ago I went to a furniture store and bought three chests of drawers. The smallest was 2m long and would not fit in my car. But because it came from the “homewares” section the store would not deliver it. This was insane: I was spending $2000 and deserved better.

The lesson: Don’t tell your customers what you won’t do, just find a way to delight them.

3.      Be genuine about what you do

Australia’s patent office employs more than 300 PhDs, all experts in very, very granular fields. These people are super smart, have umpteen university qualifications and really know their stuff.

I mention this because when I hear a company say it has “the best people” I think to myself that maybe, of all the organisations in Australia, perhaps only the patent office is anywhere near being able to sustain that claim.

There are two things to learn here. One is that claims like “having the best people” are impossible to sustain and therefore aren’t a differentiator.

The other is that it’s way too easy to fall back on cliches like this when you describe your business. Everyone is committed to quality. Everyone is customer-focused.

Except everyone isn’t too. Every business sometimes cuts corners. Every business sometimes annoys a customer.

This means that all these terms are valueless and meaningless. Instead, try to describe your business truthfully. Explain what you do and how you do it, and make it real … not just a cliché.

4.      Don’t put off the hard staff decisions

People management is the hardest thing to do in business, and therefore the easiest thing to put off.

So if someone needs a reprimand, do it fast. And if someone’s not working out, fire them fast.

This may sound harsh, but nothing hurts a business more than the wrong people. And you’ll spend much more time worrying about – or trying to work with – them than you will by finding the right people.

The flipside here is that you can’t put off learning good people management skills and industrial relations laws. If you don’t learn how to reprimand someone without making them hostile or setting yourself up for an unfair dismissal claim, you’ll waste more time than you can possibly afford.

5.      Keep your finger on the pulse

Every business has key indicators that represent their pulse. It could be stock levels, outstanding bills, a sales pipeline or another indicator.

Whatever the number is that makes the most difference to your business, check it obsessively. That way your finger will be on the pulse and you’ll know trouble is on the way in time to react to it, instead of being swamped.

Simon Sharwood is editor of My Business magazine. You can find it at www.mybusiness.com.au, Facebook and Twitter or reach him at mybusinesseditor@mybusiness.com.au.

 

 

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