05.04.09
The unofficial top 5 tips for starting and growing a business
As PeopleHub enters its adolescence as a business, we thought we’d reflect on some of the key things that have got us to this stage and share them with you to assist you in your business.
The mechanics of starting a business are well published on several Australian government sites. So rather than reproduce some already excellent information and advice, we’d thought we’d provide you with our top five considerations when starting a business.
- Do something you love – This is one old chestnut that gets trotted out by everybody who has written a motivational or self-help book. It is almost a cliché, but the simple fact is there is no such thing as “Mondayitis” if you are doing something you believe in and are passionate about. In all honesty, PeopleHub was not founded to be a payment business, we are passionate about helping small business and by providing a reliable and flexible direct debit solution we are achieving exactly what we set out to.
- Map out your business model – I cannot believe how helpful this is to a start up. The business model explains how you take the inputs to your business, convert them into a product or service that is of value to a market and then get paid for them. There is a great episode of South Park where the gnomes are starting a business selling underpants; their business model is reflected in this picture . At the very least your business model will help you develop the assumptions with which your financial projections are based. And the great thing about documenting your assumptions is that you can revisit them if your business is not performing how you expected it to.
- Put together an official board or ‘friends of the company’ – The Napoleon Hill classic “Think and Grow Rich” describes the establishment of a “Master Mind Group.” In principle these are people who have specialist skills and knowledge in areas you do not. At PeopleHub we have a group of mentors that we share information about our business and obtain their feedback. This has been extremely useful in identifying other revenue opportunities, getting the company structured right and generating new ideas that we simply could not have developed on our own. Through our mentor meetings, we discuss strategic issues and generate an activity list that we go away and work on. We provide feedback on the progress that list of activities at the next meeting and then move onto the next part of our business.
- Understand whether you are selling plain milk or flavoured milk. This was one lesson that took us a long time to learn. Yes, you want to be a client focused organisation and yes you do want to offer good customer service, but all of these things need to be considered in terms of your pricing strategy. Virgin understands that it sells white milk or a no frills product. If you want to watch the little TVs in-flight, then you pay extra and if you want to eat a packet of chips, you pay extra. On the other hand if you are flying QANTAS, all these little ‘extras’ both in terms of service and product are seemingly provided free. The trade-off is, that you will generally pay a higher ticket price when flying QANTAS. In the end, you are not doing your customers or your business any favours by over-serving and under charging them. The reality is, in most cases, it is not sustainable. We’ve found that when you offer your customers a fair price and are upfront about optional extras they may be interested in, both you and your customer wins. You can earn a return on your effort and your customer enjoys that additional flexibility or utility of the product extension.
- Always look for ways to improve your business – The successful businesses of today were not the same 20, 15 or even 5 years ago. While it is easy to poke fun at a business like Microsoft, they are embarking on a series change to their business. They have dominated the desktop market for the best part of 15 years. They are now focusing on ‘search technologies’ and web-based software products because they believe those areas represent the future.We are always debating what will make our customers more successful. The 3 areas we focus on are; giving you more time, more money and more flexibility. We are constantly developing concepts around these areas and the PeopleHub of 2014 will be much changed from the PeopleHub of 2009.
What are some of the lessons you’ve learnt in business? We’d love to hear your stories, so please take the time to comment on this blog and share your stories.