When I started my first business aged 24, which seems a lifetime ago now, I had no formal business training or experience at all, having left school at 16 and gone straight into an engineering apprenticeship. As a new service business it was all about getting new customers on board and retaining them, which as it turned out I was pretty good at.
The business grew steadily over the next few years, before I knew it we had a staff of 20 and a turnover of over 1m, (2.7m in today’s money), profits were a little erratic with some good years and some not so good. It wasn’t long though before turnover started to level off and profits were falling. I was still keen to grow the business, so I needed to find a solution.
At the time Strategic Marketing was the ‘big thing’, so I thought this could be the answer. We engaged a Marketing Agency and embarked on an extensive (and expensive) marketing and promotional campaign. After 6 months of intensive work, we only increased sales by 10% and profits were still proving elusive.
Slightly disillusioned following the lack of any serious progress, a downturn in the economy and a looming recession, I decided it was time to move on and to sell the business.
Looking back, had I known what I know now, I’m pretty sure I could have turned that small business into a much larger one with serious potential for sustainable growth. We had all the resources we needed to make that happen, I just didn’t know how. Hindsight is a wonderful thing, but I can’t help thinking about what could have been.
I eventually worked out (the hard way) the key ingredient missing, it wasn’t a lack of core competence, sales, marketing or commitment to make it happen, it was a complete lack of a coherent Business Strategy.
It is essential for all businesses big or small, who are looking to increase market share, turnover and profit, to have a clear Strategy for Growth, this applies to existing businesses as much as it does to start ups.
It turns out that my first business was really only a “me too” operation and that competition in the industry was just too strong, leaving no space for real growth. The decision to use the “Strategic Marketing” approach all those years ago was never going to work, no matter how much money was spent to increase awareness, we really had nothing special to offer, flogging a dead horse as they say.
It doesn’t matter how much you spend on operational improvements in Sales, Marketing, Production, or Management, if you don’t have a clear Strategy and a Competitive Advantage, you will not achieve any significant growth.
My biggest mistake was not getting advice at the outset, with no business experience and having never even worked in an office before let alone run one, it was always going to be difficult. The main problem is once you get bogged down in day to day operations, you have no time to back track and think about Strategy, so you move forward without one.
It can take many years to realise this, and many more to rectify the problems it causes. The good news though, is that once you have an understanding of what Strategy really is and what it can do for you, there is a systematic approach that can be followed to achieve your objectives.
I now spend my time Advising, Training and Coaching startups and existing SME owners on how to create effective Business Models and Strategies to allow for sustainable, profitable growth, and more importantly to ensure it doesn’t take them 30 years to get to where they could be in 5 !
David Harris
OBSGroup