5 tips to succeed as a mid-market business
What do you do when you’re stuck between being a small business and a corporate titan in the world of the mid-market business?
According to the Australian Bureau of Statistics, just 2.4 percent of all businesses in Australia are classed as mid-market.
Why is that a problem? Because there’s very little support available for the mid-market business.
Most government focus lies on the small businesses because that’s where the majority of votes are, and the big end of town because that’s where most of the money is.
Basically those in the mid-market have few resources to help them achieve success.
This doesn’t mean it can’t be done, however.
1. Build a team
As the business grows, it can no longer be dependent on the owner.
In most small businesses the owner is the main income producer — and he or she may also be the bookkeeper, marketing manager, HR manager, receptionist and cleaner.
To succeed as a mid-market business, the business owner must realise they can no longer do everything, and they have to employ a management team to help build the business.
If you don’t have robust recruitment and HR systems in place however, this can create its own headaches.
It often takes business owners a few attempts to get this right.
Keep in mind that adding another layer of management into your business will increase your overheads, so you need to be comfortable that you will be able to generate enough revenue to justify the increased costs.
2. Act like a big business when it comes to systems
Large corporate entities are built on a foundation of a strong corporate governance framework.
It’s imperative that medium-sized businesses implement systems, process and procedures that enable them to maintain control of the business.
I have seen large businesses attempting to use off-the-shelf accounting software to manage the operations, and they can’t understand why they don’t have control over the business.
At a certain point, almost all growing businesses will need to implement enterprise class software solutions such as an integrated ERP system that allows you to collect, manage, manipulate and analyse data from various sources.
We often say business owners need to ‘act like a big business,’ which means putting in place the systems that are appropriate for the size of the business to maintain control.
3. Form an Advisory Board
As your business grows and you start to lose control and let go, it can become a very lonely existence — everyone in your life has a vested interest in your business so they cannot give you impartial advice.
An Advisory Board is a group of independent, external advisors who provide non-binding strategic guidance, advice and support to the owners or shareholders of the business.
They can provide insights and advice that can only be provided when you are external to the business and not involved in the daily firefight.
With a strong management team and robust governance systems established, the business owner can now focus on working on the business — not in the business.
4. Surround yourself with trusted advisers
While an Advisory Board is about your business, you still need people to help you.
It’s a good idea to collect an external team of trusted advisors and mentors who you can call on for advice and guidance.
These include an accountant, a lawyer and a bank but could include many other advisers and consultants.
It’s worth your time to seek out professionals who have specific experience working with mid-market businesses and who can take a whole-of-business, strategic approach rather than focusing on one area of expertise.
As the traditional African proverb says, “It takes a village to raise a child”.
5. Think of your business as an investment
A lot of small business owners effectively think of their business as a job and have no plans to build a larger business in which they can build equity.
In fact, over 60 percent of all businesses in Australia don’t employ anyone — this could be the self-employed sub-contractor tradesman, or possibly a home-based businessperson who is happy earning enough money to fund his or her personal life.
An owner of a mid-market business must think differently.
You must think of your business as an investment. Your ultimate aim is to get a return on your investment, and the only way to do this is to make money.
Every decision you make will have a financial impact. Remember to ‘act like a big business’ to grow and ultimately increase the value of your business.