Macleay's Marty Sammon shares the secret to starting a successful business.
I have nothing but admiration for people who want to start their own business and live their dream. Over the years, I have seen a few win, and many close down. I suspect that in a lot of cases, good or bad luck might be a reason, but sometimes I wonder if those who close have really done their homework. Why set up in that location? Do we need another coffee shop? Do we need another gift shop? How will I compete with online low cost businesses?
What drives a successful business? From my experience, once established, there is a champion who is an expert in that business and customers naturally turn to that person for the product or service on offer. This is usually the owner. The second feature is the values of the business. You may well ask – what do I mean by values?
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A Business Is Like A Person
They both have great, good or poor values in aspects of their personality and behaviour. The recent Hayne Royal Commission into financial institutions observed the impact of banks falling down on their stated values, and as a consequence, public trust in banks is at an all-time low. Values are your business’s cornerstones and foundation. Integrity for your product, honesty in your dealings, empathy with your customer deadlines, evidenced by your follow up support as required for after sales satisfaction and belief that you can provide your business promise to the required quality.
Macleay Business student Zafira has started her own catering company called Whisk.
Treat Your Employees Well
Lead by example by treating your employees with the same values of integrity, honesty and empathy. There are lots more values that make up your business philosophy, and you need to understand and message your values strongly. Ultimately, you will be judged by how well your business reflects your values. Your employees will also be motivated by your values if they are practiced by you.
Know Your Competition
Our society is competitive, and when a potential new business owner takes the plunge, this is the first reality one confronts. Study your competition, and differentiate and articulate the new approach you will bring to the market. Customers want value for money and good service. They want quality, and quite often, not prepared to pay the price for quality. They will shop around, and try to get the best deal.
Quality Over Quantity
Remember the old adage – Quality is remembered long after the price is forgotten. Stick to your value proposition, and learn to sell the benefits of your offer. This is difficult advice when starting, but if you have a great business proposition, don’t chase new clients or customers at all costs – sell your business case and choose those customers who respond to you and your business message.
Perfect Your Plan
I am a great believer in business planning, but it is difficult for a start-up business to do, with no track record. Banks will usually insist on one, and the shorter the better. The key benefit for you is to document your thinking and analysis at that point to measure future progress. I strongly recommend that a one page strategy analysis of the market opportunity is essential.
Perfect your plan before jumping into a new business.
The First Rule of Business
You must be able to prove to yourself and potentially your sources of finance “Where is the demand coming from?” Know thy market – the first rule of business. How will you service the market? Are key relationships with customers critical for your success? They usually are, so it is vital you identify this early and build genuine business friendships to grow your business.
It Makes Cents
An oldie but a goodie is the rule to look after your cents (and customers) and the dollars will take care of themselves. Be careful, but you are now in the business of risk taking and following your own judgement. Your best tools are your eyes and ears, and listening is a great business skill. Evaluate risk, and consider your options. Take advice from trusted advisers and business friends, but ultimately you will have to decide which option will work best.
Share the Dream
If one is starting a franchise, one great competitive advantage for strong franchises is that you have a recipe for your new business that works. You pay a royalty for this strength, but depending on your personality, this can be a great way to start your business. The opposite is true – if starting the dream on your own, you are on your own and it can be much tougher than you imagined.
The winners of Macleay's last Pitch Day.
People Are Your Strength
Finally, surround yourself with the best people. Choose your staff, accountant, lawyer, insurance broker and market adviser carefully, test your marketing plan and be prepared for hard work and lots of challenges along the journey. Consider the use of business mentors to guide and support you. Remember to embrace and manage technology.
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