I have been in business for over 25 years, and though I have much more to learn, and there are many things I might do differently now in hindsight, staying in business for that long is no mean feat. In fact, the usual statistics indicate that somewhere between 60-80% of all businesses go out of business within the first five years; and over the next five years, a similar number drop out. Anyone familiar with the Pareto principle will see that these numbers more or less accord with the 80/20 dynamic!
The question of longevity in business has become more pertinent than ever in our modern world, where the ever-shifting landscape of technology and culture make building our house on solid ground very difficult indeed. Many businesses who remained in the Forbes 500 for decades are now defunct. Many businesses that did not exist fifteen years ago have reached billion dollar evaluation. It remains to be seen whether the latter of these will also stay the course or burn out. Sometimes, it is indeed the tortoise that wins the race!
So, how can we ensure longevity? How can we make the 20% cut and go on for five, ten, fifteen, or even fifty years?
These are my top three tips for anyone who wants to start a business, be that with small resources (like myself as a sole trader, back in the ‘90s), or even with huge resources and backing.
What I am about to share with you was not, of course, obvious to me at the start back in 1995 when I gave up my job. It is also worth me mentioning that I am no longer a sole trader and currently run a very different type of business with Motivational Maps (and have done for the last 15 years). However, all of this experience is very relevant, and it is worth reflecting on what we can learn from the past, even if we have moved on. So, this is what I have learned – and happy is the person who can learn from others’ mistakes!
1) Avoid The Trap of Specialism
First, and probably foremost, it is vital not to fall into the trap that so many businesses, large and small (but especially small) fall into. We need specialism, but it can also be a deadly trap.
I started business life as a trainer, and I wanted to be the best. In fact, I specifically wanted to be in the top 20% a la the Pareto Principle. And beyond that, in the top 20% of the top 20%. In other words, I set myself a goal to be in the top 4% of trainers! A pretty ambitious feat. But based on what? Revenue? Size of Company? Number of employees? None of these were of interest to me. I wanted to be a superb trainer in a technical and efficacious sense, to get those shifts in people who attended my training; I wanted to become a top trainer on the basis of excellence.
I have received a lot of feedback from my training over the years, and I am fairly convinced that in this regard I did succeed in becoming an excellent trainer.
But this is the danger. Whether you are trainer, a plumber, an accountant, a tree surgeon, a lawyer, a web designer, or whatever, a service supplier has a tendency to focus on the technical quality and the execution of what they do. What we are good at, and our self-esteem, are locked into that activity. And this is not always conducive to running an effective business.
For a sort of proof, let’s ask this question: if Richard Branson were interested in setting up a plumbing business, what would he be most concerned about establishing first: the technical capability of staff? No, that would be a given that followed afterwards. The key question would be: what is the market for this type of service and how can we effectively access it?
So, my first business tip is get the strategy and marketing right to begin with. Remember that strategy and marketing go hand in glove: they need each other. Often, businesses conflate these two things, but they are distinct, and mastering them even at the early stages is crucial.
A final point to make about this is that when we start thinking about our market, we are shifting our attention away from what we’re doing to what our audience wants. To us, as experts and specialists, there may be nothing more exciting than the nitty gritty details of how motivation works. But is this of interest to our potential clients? By focusing on the market, marketing, and strategy we shift the focus onto the person we are looking to make a difference to, and away from ourselves, which is a vital step in developing a business and ensuring it lasts. If we keep giving people what they want, they’re likely to want us to stick around!
2) Energy > Expertise
Back in 1995, I have to confess my strategy was extremely weak, and my grasp of marketing was also defective. But sometimes you can succeed despite that if you can sell anyway. That I certainly could do and still can. And I am reminded of Brian Tracy’s wonderful dictum about selling: namely, “at least 50% of any sale is a transfer of enthusiasm.” How true! Enthusiasm and motivation are pretty synonymous – it’s about the energy you bring to work, you bring to your business, you bring to your clients and to the world. This energy is infectious and people want to be near it.
Thus, lacking a strategy and even a half decent marketing plan, you can still go a long way if you are enthusiastic and motivated. If you run a company with staff, then this is even more crucial, because your motivation impacts them, and this leads to ever higher levels of productivity and success.
Becoming motivated, then, is really essential and in any case has become the basis of my whole work. When I started, I had the quality of high energy but I did not consciously rate it as highly as technical excellence – now I know better! Energy, or motivation (I regard the two as virtually synonymous) is arguably the most important factor in business success. Highly motivated and energised people work harder because they love it, they are more creative, they are invested, and they can go the distance because the work isn’t grinding them down. This applies as much to us, and to those we employee or work with. If you aren’t motivated by what you do, then the chances of longevity are slim!
3) Don’t Go It Alone
Finally, my third top tip is one I have also learned the hard way. In 2006, I abandoned self-employment and set up the Motivational Maps Ltd business. Those who know Motivational Maps will also know that “Friend” is one of the nine motivators that drive human behaviour. For some people, it is a vital component of gaining satisfaction at work; for others, it is no big deal. I am in that latter camp. “Friend”, or the need to belong, is low on my motivational map, although I would describe myself as a friendly person.
What has emerged for me as core since setting up the Maps business is the importance of relationships: deep, consistent, sincere, powerful and compelling relationships. In fact, when relationships get to the compelling level we can use another word or words: allies and alliances – all based on true relationships.
This gets us away from what I would call commodity or transactional business and into transformational and value added business. Further, it becomes a filter. I now actively look to have deep relationships with every supplier, client and “friend” involved in my work; put another way, I don’t want to waste time with people I really don’t like and who at the end of the day are likely to cause me problems.
Ask yourself three simple questions about your suppliers, staff, and clients. One, do you know them? I mean, knowthem? Two, do you like them? And finally, do you trust them? If the answer is yes to all three, then you want them, in whatever capacity, in your business.
To sum up: work on that strategy and marketing plan, be motivated at all times, and surround yourself with people you know, like, and trust. There’s a good chance if you do these three things, then you will have a superb and long lasting business – and a lot of fun along the way!