I started my Brisbane business coaching services in 2008. I have learned a lot along the way. In this video, I am sharing with you the lessons I’ve learned in the last 14 years of my coaching business and what successful businesses have in common.
What do successful businesses have in common?
There are a few things that successful businesses have in common. Here’s a short list of those similarities. This list is not in any way exhaustive, but it is a list of important things of factors of success:
Successful businesses tend to nurture a growth mindset and an innovation-oriented or a learning culture. Businesses with this mindset are often solutions-oriented.
They have robust work systems and nurture a healthy working environment. They understand that for the business to succeed, they need to provide their employees the tools and know-how to succeed in their roles and take care of everyone’s well-being. This also means that they invest in their people through formal staff training, cross-training, or even mentoring.
Successful businesses have great customer relationships. They take care of their customers, work hard to understand their needs, and ensure that they cater to them.
They have a good handle on their finances. They understand that their financial health is the foundation their success. Many business owners know that the company’s financial health is important, but not all of them know how to interpret one. If you struggle with that, get someone to help you and explain to you what to look out for in your financial statements.
When I encounter a business owner who struggles to understand their financial statement, I tend to simplify it to them with a few known rules of thumb or specific numbers or ratios to look out for in their statements. By focusing on these numbers, they will get a good idea of how their business is doing, which will allow them to ask better and more well-informed questions.
Let’s take a look at these numbers:
- Turnover. You need to know this figure as a business owner to get a snapshot of how your business is doing over a certain period of time.
- Profit Margin. You need to know how much your business makes relative to your turnover of the business. Understanding your margins for each period will give you an idea of how the business is doing.
- Cost. Know this figure and understand how much it costs to keep your business going. You’ll need to know why your costs go up unexpectedly or down unexpectedly.
- Break Even, or a comfortable figure. Once you are familiar with your turnover, profit margin, and costs, you need to determine a figure that will cover all your costs and to continue moving your business forward. Once you have this number, you can easily determine whether your business is in a stable position so you can focus on building it to make it even bigger and more profitable.
Please note that these are just simple numbers—a starting point in your business’s financial health. There is much more to learn and understand when looking at your financial statement, but this is a good starting point on that journey.
I understand that we are all very busy as entrepreneurs but we all have to start somewhere to understand our financial statements.
How do successful businesses respond to crises?
Successful business owners focus on what they can control. They do not dwell on issues and problems that they cannot. Unnecessarily worrying about things you cannot change takes precious energy away from what matters. Successful business owners go into problem-solving mode and find ways out of a crisis. If one solution doesn’t work, they move on to the next.
For example, nobody had control over the pandemic and how it could affect business and revenue. As a business owner, you have control over your operations. The businesses who survived and thrived during the pandemic made changes in their marketing and operations to minimise the impact of government measures over their business.
Successful business owners focus on their customers. They focus on their customers’ changing needs and wants, and make sure they continue to cater to these needs.
They leverage on lessons learned from failure and mistakes. No business is perfect as we all make a mistake at some point. The important thing is to learn from those mistakes and use that to improve what we do.
What are common misconceptions about success and growth?
One misconception that many businesses have, whether consciously or not, is that sales will solve everything. It doesn’t. If it’s the only thing business owners focus on, it will be difficult to sustain if we don’t investigate other fundamentals.
One important fundamental would be cash flow and accounts receivables. Successful businesses keep an eye on their financial position and good financial housekeeping. You can keep selling many of your products, but if your clients aren’t paying you or you’re not keeping an eye out on your expenditures, it will not be a sustainable strategy.
Another misconception is on how to motivate people. When the startup culture became mainstream, many business leaders thought that perks and rewards will keep employees productive and loyal and that penalties will deter employees from slacking. But these are external motivations that don’t solve root problems or even address intrinsic motivation.
If you have intrinsically motivated employees, they will work because they love what they do and they get satisfaction from doing so. That happens when they’re given the means and tools to succeed in what they do. Your employees will work when they know that you genuinely care for their well-being. You cannot fake that with rewards.
One of the most important things I have learned is that no two businesses are ever the same. Every single business I’ve worked with had a unique story to tell and a unique team dynamic. Because of this, there is no ‘cookie cutter’ approach to working with, building, and helping businesses grow. Sure, it will make my life easy and probably help me scale my business faster if I use a cookie cutter approach. But that comes at the expense of the business and the people I work with.
What I offer to my clients is my ability to see issues they don’t fully realise and articulate them in a way that they understand and appreciate how it may impact their business. I am able to identify risks associated with the direction the business is heading and provide possible solutions to minimise that risk. What allows me to do that is to look at every business client as a unique entity with unique characteristics and circumstances.
Every business I work with is different in their stories and the people working there. As a result, not every business can fit into one-approach-fits-all in building and growing it.
The example I use is that if you want to build your business, you can grow using any ‘cookie cutter’ approach, but to maximise the full potential of what you as an entrepreneur bring to the business, you’ll need someone who can understand what you do, leverage your strengths, and mitigate the weaknesses identified. The difference that I have found in doing that is not only a more pleasant, more challenging, and more achievable journey in business growth, but also a difference in up to 20% in growth outcomes.
This is how I am able to help grow businesses from AU$100,000 to multi-million dollar turnover in a few years. Successful businesses are those built ion solid foundation: a great product base and a business owner focused on getting things done.
Are you one of them?