As the economy rumbles on in the doldrums, politicians are starting to talk up Britain forging more of an enterprise culture, with a new band of entrepreneurs being the ones who will make the country great again.
It's an excellent notion, and one that has a lot of potential for women in particular, many of whom get stuck in low-level roles that are beneath their talents if they have children and home responsibilities to juggle.
But one message the politicos are less hot on is turning half-decent ideas into real profits, month in and month out. The government isn't so adept at staying in the black itself, I guess.
Yet for any business to thrive, we all know it's profitability that counts, since running at a loss just isn't sustainable for long.
Working in a support role to small businesses, as I do, I see first-hand that many small companies struggle to turn profits consistently, but most of them don't need to do anything too drastic to turn things around. They just need to start working smarter to maximise the potential of what they do.
Most of all, then, I find that my work supporting business ends up being heavily focused on the bottom line - that is to say, on profits. It's an approach that starts with a detailed look at where the business is now and how it arrived there, before we develop a plan for a brighter tomorrow.
And what's the most common trap I see companies falling into? That's an easy one: I see them putting a lot of effort into generating new business when really the effort should go into boosting revenue from the existing clients.
For example, recently I worked with a company where turnover had stalled but the company directors were not sure why. My research found that the company wasn't analysing and monitoring the orders it was getting from existing customers and wasn't keeping in touch with them either. And the result of this neglect? Turnover across the top 10 customers had dropped by 30% in just one year.
I then spent some time talking to the company's top customers and found they were unaware of many of the company's products and services. I also asked them for input into the ordering and delivery process, which they were happy to give. As a result of this exercise, and after putting in place a key account manager, company profits have doubled in the year since making the change.
The idea is captured by John Romero, the highly successful video gaming entrepreneur. He says: "In marketing I've seen only one strategy that can't miss and that is to market to your best customers first, your best prospects second and the rest of the world last". It's a truism for all businesses to remember.
Perhaps the second most common mistake business owners make is to build the business around the people. In fact, the business has to come first: that is, the people should be built around it.
What do I mean by this? That it is really important to involve the staff in the business and for business owners to take the time to look at what the business needs and what the staff profile should look like to support this. To get the ball rolling in this area, business doctors often conducts a staff engagement day and follows up with analysis that takes in 'the four Rs'. They are:
Retain - the good staff who support the business model need to be retained and valued.
Retrain - where there may be good people but there is a deficit in their knowledge or experience, retraining is needed.
Recruit - where there is a gap, recruiting the right person/people to fill it is crucial
Release - when necessary companies should be prepared to let those people go who don't fit with the business model or ethics.
Here's two examples of that approach in practice.
I worked with one company director who had built his business and reputation on delivering in full and on time 100% of the time. His business was growing and he employed a new sales director to help drive the business forward. The new director came with excellent credentials but it quickly became obvious that 90% satisfaction was good enough for him. This was not acceptable to the business owner and so they parted company. To take this kind of step with confidence, it's critical to know the core values for the business. The challenge then is to recruit with that understanding front of mind.
The second example covers a very different situation. It was a diamond drilling company whose staff told us that they were embarrassed by the mess in the owner's office when clients visited. They also felt that the company required stronger branding- a sign outside the office, signage on vans, branded overalls, to name just three of their ideas. The owner reflected on the suggestions and made the changes. In the next 12 months company turnover increased by £1m and profits jumped by nearly 20%.
The message to all those small-business owners and would-be entrepreneurs in 2013 is simple: working smarter really can pay off, and quickly. Make the right calls now and you can soon be working on the business rather than in it, and start reaping the benefits.
Suggested For You
SUBSCRIBE AND FOLLOW
Get top stories and blog posts emailed to me each day. Newsletters may offer personalized content or advertisements.Learn more