I have had the privilege of working with entrepreneurs for nearly 20 years.
Many of them were true startups and some of them were scale-ups.
I have no doubt that the support, service and “stretching” provided to these entrepreneurs through the business incubators I was involved in, added real life value to the vast majority.
I am in a new season of my own journey where I am now leading my own business.
I am thankful for the amazing people I met, and “sticky” learning I learnt, not only from what was shared from our perspective, but also from the stories and journeys of the entrepreneurs, staff and broader networks.
I am now nine months into the journey and I thought to share four of the lessons I have learnt in applying the principles of entrepreneurship in my own business, Entreprenacity business development services:
● Invest in professional help.
Robert Kiyosaki, author of Rich Dad, Poor Dad quipped, “I’m looking for a good system, a good network, and the smartest people I know to build my business.”
He elaborated that he is willing to pay top dollar to ensure he has great accounting, legal and property advice.
I have a business qualification and 18 years of using this knowledge to help others.
I am not an expert, however, and take Kiyosaki’s words to heart.
That is why I am only too happy to pay for great support in marketing/social media and in accounting.
You can and should shoulder a lot of the work when starting up. That is part of the deal. Do focus, however, on getting support in key areas as soon as feasible.
My website and LinkedIn profile are up and running and active and my accounting and financial affairs are in order and on track (Thanks to Bronwyn and Heinrich respectively).
●Leverage the networks you have
Most people have informal networks that have been established in the process of their employment.
When transitioning to starting your own business, it is strategic to leverage the networks you have built and intentionally seek out new, relevant ones.
Part of my own journey meant growing in the entrepreneurial ecosystem in the Western Cape.
Post that era, I am grateful to continue and enhance the relationship with organisations like the Chamber of Business, the City of Cape Town, False Bay College, etc.
This requires investment of time and strategically focusing on those partnerships that add value to both parties.
● Honour the support base around you
I recall an interesting insight gleaned from research into successful entrepreneurs.
When asked about the source of success, they referred to the expected things such as a unique selling proposition, a growing market, focused sales, great systems, etc. What was not so expected was this reply, “A strong supportive environment.”
I have recognised the invaluable role that my chief cheer leader (my wife) has played in my journey. Make no mistake, the journey of an entrepreneur can be an extremely lonely one.
Your public life requires an integrity with your private life. Support from family, friends and mentors is an invaluable resource.
I live in a lovely suburb with a super community. I also honour the support I glean from the business group and the faith-based community I am a part of. Past mentors still continue to stretch, encourage and support me on the journey. May you find similar support around you.
● Focus on building profitability.
I love the quote: “Don’t start a business just to make money. Start a business to make a difference.”
That resonates with me and is why I am delighted to carry on doing what I am doing into my silver years. I am so grateful to be involved in making a difference.
Yet, it is also important to embrace the truth that when you make a healthy profit, it enables you to keep on making a difference in a sustainable way for many years to come.
As author James Collins says, “Profit is like oxygen, food, water, and blood for the body; they are not the point of life, but without them, there is no life.”
Paul Marsden adds, “Business is all about solving people’s problems − at a profit.”
Here are five practical tips you can implement to increase the profitability of your small business:
● Increase your income streams
I started my business by selling the book I wrote. I have introduced three further income streams that have helped scale the income and increase profitability. You can also increase your sales. I found the use of a clear sales pipeline to be invaluable for estimating three months in advance.
● Consider changes to your price points and margins. If you continue to add value, price changes are acceptable to your clients.
● Reduce your cost of sales. This could mean looking for alternative suppliers and/or asking for discounts from these suppliers.
● Reduce your expenses. In order to do that, you have to have a clear record of regular (and irregular) expenses.
A simple income statement can keep you in the picture. You can then regularly look at line items to see what is essential and what may be reduced or eliminated
● Compare your gross and net profits with your historic data. Are they increasing/decreasing? In addition, you can often get insights within the industry you are in to see what “traditional” profit levels are. If you are way off, then it is time to dive deep to understand why.
● Steve Reid has started his own business in support of entrepreneurs, leaders and incubators and may be contacted at firstname.lastname@example.org