Running a successful business is hard work, countless pressure from all directions, but for those with the discipline required to succeed, there is plenty of advice available. Here is our helpful guide to set a path to success.
FINDING & KEEPING TOP TALENT
- Understand your team’s motivations. Don’t just offer the benefits you think they want – be flexible, and listen. Parents might prefer flexible working hours over gym membership, while travel-bugs might want the option of more holidays, rather than a laptop.
- Apply the mantra: “Recruit for qualities, not qualifications”. Get behind the person, not the paper
- Finding people with the right skills can be a problem. Skills shortages can be overcome by recruiting people outside the industry and training them up. An additional benefit can be that people from other industries can bring new perspectives and innovations.
- Providing worthwhile training regularly helps to retain high-skilled employees…
- …but training can be expensive and time-intensive. How do you ensure your staff won’t walk out after you’ve invested all that resource on them? You can create lock-in clauses with training. Contracts written to specify the terms you want such as the employee has to stay for two years after receiving training, or the employee has to pay the company back for the training if they leave before that.
- How do you measure return on investment of training staff? Do a feedback survey with staff. Look at the tangible business benefits training has brought, and assess whether it’s made you better than competitors on key measures, such as customer service. Finding a way to quantify the results of training is essential, so you can assess and improve training programmes
- Giving employees equity allows fast-growing SMEs to pay less, while increasing loyalty and motivation, but ensure the terms are right to ensure a future equity sale is not frustrated by an awkward ex employee.
- Struggling to find tech talent? Eastern Europe is becoming a hotbed for it. You can either recruit from EU countries, or outsource to remote workers who are typically cheaper than London ones.
- For other high-skilled roles, look to countries like Spain that have a high skill base but low employment, so are keen to work on advanced projects, whether in person or remotely.
- Organisational processes are key to managing cashflow – it sounds basic, but everyone knows that cashflow is a potential business killer. That means YOU MUST CHASE INVOICES. Automated credit control, for example through a decent automated emailing system, will help your cashflow immeasurably.
- Give a performance-related bonus to your head of credit control, or incentivise the finance team to achieve zero debt, to really prioritise cashflow management.
- However, when budgeting cashflow you have to be realistic and allow a provision for writing off some invoices, in case some never get paid.
DEALING WITH BUSINESS CLIENTS & SUPPLIERS
- Don’t take every job that comes your way – work out whether it’s really going to add value.
- Not all big business is good business. It might seem like the biggest boon ever to win a massive-name client, but the reality can squeeze you. Many large corporates have notoriously late payment terms – up to 90 days, in some cases. Their procurement process can also be highly complex, especially in financial services, legal and telcom. Work out if you can handle big clients before trying to win them or agreeing to take on their business.
- Spread your risk by having a mixture of large and small clients.
- Healthy business relationships are more likely to thrive: “Everyone has to make money from the relationship.”
- This kind of relationship can really help businesses that suddenly find themselves in a tight spot with cashflow, as you can call your supplier for more lenient credit and payment terms, having built up a strong relationship.
THE OVERSEAS OPPORTUNITY
- If the pound strengthens, there’s obviously a risk that overseas clients will go elsewhere to keep costs down. Counter this by offering clients fixed exchange rates, but be aware that this sometimes loses money, so before you commit ask yourself, is it worth it to retain the business?
A LUCRATIVE EXIT
- Looking to sell? Prepare early. It could take a couple of years to get to the right place to achieve a target price. The target price and you strategy to get there should form the back bone of your business plan.
- Worried about the fate of staff after you’ve sold, or maintaining motivation among a possibly anxious team beforehand. Share the spoils and incentivise people who are vulnerable in the transaction to create a win/win.
- You might think you have a clear idea about whether you want to sell to trade or private equity, but remember that one might be more flexible about terms and conditions. Exiting on very favourable terms might in the end be worth more to you and the team than a higher overall price, so keep your options open.