Everybody has a choice. They can minimise risk and take a leaf out of the book of successful entrepreneurs or worry themselves back into start-up mode.
It's a bit like circumnavigating the globe, you can decide to sail the seven Cs: cash, concentration, control, cooperation, collaboration, culture and coaching, or give up, miss a few out and never accomplish your aspirations.
Cash is all about risk and the value or cost of potential outcomes. Successful entrepreneurs know they are never short of ideas, which exposes them to making 20 decisions in the hope one of them will yield a good result. This is not spreading risk. Lowering risk is about lowering the probability of something going wrong. You will notice that Lord Sugar for example, surrounds himself with conservative advisors, who appear to have an innate talent for 'grilling' ideas.
Write down your top 20 ideas, shortlist and refine them until you have three strong ones. Why make 20 bad decisions when you can make three good ones?
Concentration is the second C. Good entrepreneurs will have definite one, two and three year goals. Those who started setting clear goals a few years ago are far more likely to have reached their target size, revenue and/or customer base than those who have not set such objectives.
These entrepreneurs will manage their natural tendency to juggle too much and discipline themselves to concentrate on delivering or completing one thing well at a time. The most accomplished business people only take on companies or new offerings that are strategically linked, i.e. where one enterprise feeds another. If this involves risk taking, they will focus on the activities required to fill their sales funnel rather than focusing on the sales themselves.
The third C is control. It plays a vital role in successfully navigating a company through economically uncertain times and often means controlling a natural appetite for adventure. In practice this means balancing risk and reward, so the approach to new opportunities and the ability to scale to accommodate increasing sales are of fundamental importance.
Those who have mastered the art of such a balance will be extremely sales margin conscious. Out-of-the-box thinking and flexibility will pave the way to more secure margins and customer longevity. Quieter business periods will be used to systemise business processes designed to make commercial headway. Watch out for self-acclaimed entrepreneurs who have not stopped to address systems weaknesses which can result in instabilities that are evident to customers and onlookers.
Cooperation is the fourth C. The proverb 'birds of a feather flock together' dates back to ancient Greek philosophy and has stood the test of time. Successful entrepreneurs will not be serial networkers; they will select the communities in which they build relationships very carefully to avoid those who could potentially let their business down. They will look for others who do not display panicked behaviour and innovate to help ensure high-quality service and product delivery. When an appropriate network has been established the fifth C comes into play - collaboration.
Although creating collaborations can be low cost, the consequences of getting them wrong can be astronomical. If all business owners were surrounded by commercially strong, honest and highly effective peers this would not be a problem. Unfortunately this is not the case, particularly towards the end of recession or if going into the proverbial second dip. This is why the fourth C (cooperation) is crucial to the fifth C (collaboration).
The combination of the following two facts have generated disproportionally high risks to entrepreneurs looking to collaborate. Fact one: wave after wave of redundancies have fuelled the set-up of many consultancies. Fact two: entrepreneurial directors generally outsource the things that they are disinterested in or take too long.
Although there is enormous strength in understanding your own weaknesses and mitigating them through collaborating with consultants and other companies, getting answers to difficult questions before anything progresses has become pivotal to success. More importantly, getting it wrong reduces revenue while damaging your reputation and brand.
Those who used to work within larger organisations are not necessarily the best small business advisors. Ask about their achievements within your type of SME environment and where are the results. A recent change of career or accreditations without long-standing experience should ring alarm bells if you are about to collaborate with another business or entrust a consultant with your company's direction.
The sixth C is all about culture. The most successful directors of 2011 will be those who have recruited well and optimised all employees. They will have involved staff in quarterly milestones, explained how various achievements link together and each employee will have bought into the company direction. When things go well, this approach delivers a sense of achievement across the workforce. The days of restricting the objectives within your business plans to a few board members are over.
The final C is the importance of coaching. Think back to those who supported the progress you have made in your own career and business. Who has taught and guided you well? Regardless of if they are a passive mentor or professional business coach, think about how they have or can help you attract and retain the right people, customers and suppliers. If they enthuse about the direction you set, people power will propel your company forward.
About the author:
Jon Baker is director of venture-Now and a business coach.
This article originally appeared on AccountingWEB.co.uk.
This article originally appeared on AccountingWEB.co.uk.