5 ideas that made a big difference to my business
“Ideas are the beginnings of all fortunes,” affirmed success guru Napoleon Hill, and how true this statement has proven to be. Every successful small business must have a coherent menu of underlying ‘big ideas’, which drive the venture forward. With that in mind, below are five big ideas which made a difference to my business. They might work for your small business too.
1. Choose a flourishing and profitable industry
If you choose to set up a business in a mature industry, a sector without high profit margins, or one which is at potential risk of decline, you may ultimately be competing for a slice of a shrinking pie.
Our business is a real estate buying group that specialises in the acquisition of investment properties for clients, with our founding offices at Mayfair in London and Martin Place in Sydney. London and Sydney have property and investor markets that are swelling rapidly, albeit in rather different ways.
Australians are relatively familiar with the concept of a buyers’ agency, and the industry is proliferating, particularly in capital cities such as Sydney and Brisbane (where we also operate today). The London property investor market continues to thrive, comprised of overseas buyers and residential investment funds to a greater extent.
Targeting an industry which is established, burgeoning and with high profit margins affords your business the best chance to develop and duly compete for market share.
2. Model successful businesses
One of the most proven and effective techniques for achieving what you want in life is to seek a mentor who has already attained your goals and then model or replicate what has worked for them successfully, while simultaneously learning from what has not. In some instances you may be able to accelerate towards your business goals even more swiftly than your chosen mentor could.
While forging your own path and resolving to learn from inevitable mistakes is commendable, a more direct route to success can be to identify the key business strategies that have worked for others in your industry or field, and to replicate and fine-tune them for your own business.
3. Keep your fixed business costs low
As a qualified Chartered Accountant, I have reviewed nascent business plans over the years with ambitious fixed cost projections for plant and equipment, premises and director salaries in the years immediately following establishment.
The higher the fixed costs in your business are, the more this equates to a tough hurdle for the revenues and post-tax profits you must achieve in order to survive and thrive.
How, then, might you resolve to keep fixed costs low? Here are a few considerations:
- Keep staffing arrangements flexible in the early days through outsourcing or using contractor services, rather than immediately employing full time staff.
- Consider operating from home or using a serviced office facility rather than incurring high rental expenditure.
- Evaluate if you can rent instead of buying. This includes cars, photocopiers, IT equipment or other office appliances.
- Always shop around for the best value for money deals for insurance policies, mobile phone plans or other essential business expenditures.
- Deliberate upon your plans very carefully before ever using debt to fund business expansion.
From a cash flow perspective, remember that keeping fixed costs low in a small business remains insufficient if you do not get paid promptly for your products or services. You must invoice clients on a timely basis and always chase late payments.
4. Maintain 80/20 thinking
Pareto’s Law or the “80/20 Principle” is one of the most important rules of small business for those who want to achieve more effective results with less strain. The 80/20 Principle holds that most of what we do in life in achieves comparatively little, while 80 percent or more of your results are frequently derived from 20 percent or fewer of life’s inputs.
80 percent or more of your business revenues and profits are likely to be sourced from only 20 percent of your clients, and in the case of many small businesses, from only 20 percent or fewer of your product lines.
While it is always important to pay close attention to detail in business, from a macro perspective, you should have a clear idea of precisely what your core product is and exactly who your ideal clients are. Rather than trying to be all things to all people, identify your most successful strategies, products and clients and double down on them — resolve to do more of what works best.
In our business, for example, rather than offering an expansive range of esoteric real estate services to homebuyers and investors, our office in Sydney emphatically specialises in “buying outstanding investment properties priced between $700,000 and $1.3 million in the inner west, lower north shore and eastern suburbs”.
We identified that most of our revenue is derived from our core property acquisition service for investors, and we target specifically these clients accordingly. We adopt a very similar approach in our other markets, being London and Brisbane.
5. Over-deliver every time
Finally, remember that success in all fields of life is achieved by adding more value than you are paid for, every time. Always aim to over-deliver to your clients and make them feel valued.
In a small business, your existing clients can be your best source of referral. Where appropriate, request testimonials from your clients, which can be used in marketing documents and collateral. Take the greatest of care in servicing your customers, and in turn, they will take care of your business.