As you may know, Brett Abikhair and I participated in No More Practice Series 2 & 3.
We went on that journey to raise money to grow our business. We were able to raise the money and are now on the next stage of growth. However, the lessons we learned along the way were numerous and I’m hoping that some of them will be valuable in growing your business too.
Lesson 1: An external perspective
It’s funny that when you’re in the thick of it that even common sense isn’t that common. Brett and I had been running pretty hard at our business for three years and had grown new revenue five-fold in that period. One of the things that we had lacked was an external perspective. Our BDM at our dealer group was excellent in providing a sounding board. However, the No More Practice series allowed us to meet numerous people from different vantage points that gave us fairly frank advice.
Most of that frank advice, when we heard it, wasn’t ground breaking; it was stuff that we knew and maybe weren’t doing and I think that was the really great thing. Most of us have been in business quite a while and we take our eye off the basics. So one great lesson I would suggest that you do is to take time out of your business (i.e. get the hell away from your normal stomping grounds) and talk to people about your business. Tell them the warts and all and be open with the feedback (trust me, your baby looks beautiful to you, but maybe not to others).
Lesson 2: Don’t bite off more than you can chew
As you’ve heard, we grew our new revenue more than five-fold in three years. When you’re growing that fast, you need staff and systems, but you also need cash. We burnt through a lot of cash growing that upfront revenue and as a result we started to create alliances and joint ventures that took us away from our core. This put pressure on our team, distracted us from what we should have been doing and ultimately ate profitability.
I’ve heard it referred to as ‘mining’ and given the heat in that sector, I’ll repeat the analogy. A small business is a drill rig. You only have one and it takes time to set up, get the drill down and look for ore. In our business (and I think many others), we would set the rig up, start drilling and then pull the drill up, relocate to some other wonderful rich vein and start drilling again and then pull it up, and so on. What we didn’t realise was that if we stuck to the original hole, if we continued to exploit it, we would likely have been in a better place.
I’m not beating myself up here – there were reasons we did what we did, however with the beauty of hindsight, we would not have gone down those paths. Although I have a habit of biting off more than I can chew… and chewing like hell! I think that you’re better doing things one small bite at a time.
Understand your offering and your niche and mine it, mine it, mine it (by the way, your niche is not “I’m a financial planner”).
Lesson 3: Pick your targets and care for them
Another great thing that we got out of the series was learning more about who we wanted to do business with and how we were going to do it. We painted very specific pictures of who our ideal client was and what we wanted to do with them. We then started to meet and talk with those people so that we better understood their language and the types of things that they wanted help with.
We also conducted the nerve wracking exercise of surveying our clients – something that I was very concerned with because we didn’t know what they were going to say about us. Luckily we did well – I say luckily because we didn’t really have an on-going review process in place. I’m not talking about the “12-month do you want a review?” call. I’m talking about giving them a call randomly to see how they’re going, sending them an unexpected email on a topic they might like. Again, it is all common sense stuff but we were running so hard that we had, to a degree, ignored it.
For me, these issues as well as staffing are areas that you can’t spend enough time on. The more time you spend doing things for your customers, the more they will love you and the more they will refer to you. This helps small businesses and gives an unfair competitive advantage over the big guys. Maybe it’s our only one, but if we’re not using it, then we may as well pack up shop.
Ian Jordan appeared alongside his business partner, Brett Abikhair in No More Practice Series 2 & 3, where they raised $1 million to invest in new technologies and resources for their growing business. You can see Brett speaking on the Practice Innovation panel at the No More Practice live event in Sydney on August 23rd. Book your tickets today and take advantage of special industry early bird rates only available until 30 June 2013.
