Running a business is not for the faint-hearted. In New Zealand, 96% of businesses fail in the first two years. Despite the odds, 97% of NZ businesses are small, with fewer than 20 employees. In fact, 70% of enterprises have no employees at all. So why do so many fail?
It’s not from lack of skill, it’s not that people don’t work incredibly hard on their businesses, and it’s definitely not that NZ isn’t small-business friendly. Often, it’s because we Kiwis like to do everything ourselves. That love of DIY is in our DNA, and it’s almost a cultural aversion to outsourcing and consultants. Somehow, we seem to think that paying someone else to help us is worse than struggling alone, and doing an almost-certainly mediocre job ourselves.
The truth is, you can’t do everything. The key to success is having experts advise you on the stuff you don’t know how to do, or better yet, take it completely off your hands. This includes obvious things like website and shop fit-outs, but also things that feel like you could do them yourself – writing your emails and managing your books.
Which brings us to planning, cashflow forecasting and coaching – tasks that so many businesses do themselves, or not at all. These three things are the golden trifecta that might just be your ticket to success. So why are they so important, and why should you involve external businesses and consultants?
Business planning
There’s plenty of research that shows that developing a business plan is great for the growth and success of the business. A great business plan does five things.
1. Creates confidence
If you’re looking for a capital injection or more business partners, most require a thorough business plan before they make any decisions. Lay out all your research, plans, facts and figures to give them confidence in the business, and inspire them to join you on your journey.
2. Makes decision-making easier
If you have a goal, it makes any decisions along the way easier. Opportunities that arise or options you have to choose from require one simple question: is this taking me closer to, or further from, my goal?
In a situation where there are multiple stakeholders, a business plan ensures everyone is on the same page. Common goals make the group decision-making process a breeze.
3. Provides a sanity check
Have you thought everything through? You might have grand goals, but if you haven’t done enough research, all that energy might be for nothing. A business plan lets you check that your target market is who you think it is, see any gaps in your business model, and fix any potential problems.
4. Gives you fresh ideas
Involving your accountant, coach or business mentor is part of this process. While doing your goal-setting and research, you might find yourself with new and exciting ideas, or ways to approach things you hadn’t thought about. A fresh perspective can give plenty of new ideas.
5. Offers a clear sense of direction
You’ve set your targets, you’ve got great goals and KPIs, and now you’re ready to take it on. A business plan will have realistic and measurable goals, as well as the steps you need to take to get there. You’ll prioritise them and identify if you need external help to achieve anything.
Forecasting
Cashflow is important. It’s not rocket science to understand that if you don’t have money in the bank, you can’t pay your suppliers, your team or yourself. The beginning of the end will spiral away from there, because if you’re struggling to scrape together enough to pay the bills, how are you going to make great long-term plans and decisions?
Bring your accountant on board to get your cashflow forecasting sorted, so you know you’ll always have cash when you need it. It not only helps your business on a day-to-day level, but helps you make strategic decisions, instead of ones made from a position of fear. If you need funding from an external source in the future, an accountant will also make sure you’re making a smart, future-proofed decision.
Coaching
Regular coaching from someone who really understands your business is vital to growth. They’ll provide accountability to help push you along to reach your goals. They also offer fresh perspective and years of wisdom from their experience in business.
A coach will help you plan your goals, refine your niche or make plans to expand. They’ll also help you explore other ways to grow your business, and make strategic, consistent growth a hallmark of your business (if that’s what you want!) They will offer that bum-kick you sometimes need to keep you focused and moving forward.
Experts give expert advice
You know you’re good at what you do, but running a business requires a lot more than just the talent that prompted you to start a company in the first place. DIY is not the smartest way to progress your business. While it may seem economical on the surface, it could cost you a lot in the long run.
The golden trifecta of business planning, coaching and cashflow forecasting is the real secret to small business survival. Involving experts that understand and care about your business is vital to ensure growth and success. So put aside your cultural bias toward DIY and call in people who can fill the gaps in your knowledge and experience, and help you win the race.