Business happiness can come in all shapes and sizes and the key to achieving happiness within your SME is having a BHAG; a big hairy audacious goal.
Thinking and forward planning will help create a logical and direct route to business happiness, which will in turn make your SME a sustainable and happy one.
The experts at Haines Watts have shared six steps to reach business happiness:
Ensure you’re serving the right customers to drive profitable growth
Did you know that it’s the top 20 percent of customers that will drive 80 percent of the business forward? Customers outside of the 20 percent ‘sweet spot’ shouldn’t absorb too much effort or time. Think about who your key customers are: what are their needs? Where do they come from? Why are they your key customers? Tailor your marketing towards the ‘sweet spot’ and don’t be tempted by the other 80 percent.
Retaining your most valuable customers is crucial to driving profitable growth. The cost of attracting new customers is five times more expensive than retaining an existing customer – this doesn’t mean you shouldn’t attract new customers; it just means you should attract the right new customers that will become part of the top 20 percent.
Nine out of ten small businesses grow by upselling or selling to similar customers and long-term customers are more likely to recommend your business; relationship building and customer loyalty plays a huge role when retaining and attracting top customers.
Sense check the reverence of your product and services to your target customers
Are you clearly creating a point of difference versus your competitor? Are you continuously improving and innovating your products and services? Are you giving your customers the best service possible? These are all questions which should be addressed and in order to be business-happy the answers should be YES.
Differentiating your product from a competitor’s and understanding the value will help keep your product or service relevant to your customer; speak to your consumers and understand what it is that they want and what the added value means to them. Keeping the product or service live and up to date constantly is crucial to keeping your customers happy – they won’t care how it’s done; they will just value the results. Keeping the updates smooth and being timely will make the customer feel like you really care about them which will keep them coming back. Remember, staying relevant to your target customers is essential.
Having the right set of plans will make your business more resilient
Resilience can be a huge factor in business happiness and by having an active set of plans in place you’re already well on your way. Financial planning and having financial targets in place help to unify the team to drive towards the same goal. Consider setting out three targets for the team to achieve and make sure milestones are factored in. Consistency, too, is key.
Having a plan in place can help with many scenarios, for example if disaster struck would you know what to do? Do you have a contingency plan in place? Here are a few circumstances to think about:
- Losing a big client – will there be a potential financial risk?
- Working from home arrangements – are practical factors and facilities in place?
- Office flood – is there an option to move to an alternative site?
- Data / IT hack – do you have data and contacts backed up?
- Corporate responsibility obligations – e.g. GDPR, is your business compliant?
Not having plans in place if something goes wrong can cause business paralysis so ensure you plan for external and internal risks. Plan for worst-case-scenarios in order to future proof and make your business resilient to potential problems that lie ahead.
Get it right for the people that work for you and with you
It’s important to make employees feel as though they are part of the business and the culture is reflected by this. Ask yourself, is this the culture you want in your business? Is the leadership style, internal comms and structure aligned with the desired culture?
It’s important to employ individuals who want to buy into and support these values; it may be a case of unravelling what really makes the business tick! In order to get it right for employees and for the business, you need to:
- Ensure everyone supports the company’s values and is working towards the same goals
- Invest in training and development tailored for each member of your team so each individual is able to progress within the company and understands their career map
- Ensure you have the right qualities and support to help grow the business towards your vision
- Have a clear feedback system in place for your team to suggest ideas for continuous improvement and review the comments regularly to make the team feel valued and heard. After all, they are the company’s best assets
SMEs often grow by buying out similar businesses, and in this scenario, it is so important to ensure that each of the business’ cultures reflect your vision and values, and your team’s. Without your team on board with these values, the business is likely to suffer, so make sure this is a priority for the business at the beginning of its journey and review the culture often, especially when new team members are brought onboard.
Review whether your financial performance is robust enough to be sustainable
When you run a business, it’s important to ask yourself what its purpose is – does it exist to provide you with a specific lifestyle, is the plan to hand it down to future generations, or perhaps you’re looking to sell it eventually? Establishing your financial strategy and how it underpins the future is key here.
Think about your business’ growth plan – what shape do you want it to be? Think about how much turnover and profit you’d like to generate and how much you will invest into developing the business.
By taking a proactive approach to your business’s financials, you’re not only ensuring that everyone in the business gets paid, you can focus on prioritising future investments for the company such as new employees or premises, and actively look for any warning signs in the future.
Remember to ask yourself the right questions – is the business performing well and why? What measurements are in place and what’s next?
Successful businesses are aware of the current state of the business – knowing facts, not assumptions. As the saying goes, ‘what gets measured gets managed’, so set some KPIs and keep an up to date dashboard so you can look for trends – this will help in accommodating what the future holds.
With data at your fingertips you can identify the right customers, products and services for your business and filter out customers paying £300 vs £3,000 for your product. If you are in a position to analyse data early on, you’ll be able to find solutions, helping to future proof your business.
Consider how to get the direction of the business right for the future
Take a step back from the business to really think about your vision, where the business is going and where you want it to be. What are you passionate about? Do you want to be the go-to business in your industry? If so, how are you going to get there and how does this fit in with who your customer is? Consider the following:
- How does your business vision help you plan for the future?
- What does the future hold for your business?
- Do you have the right skills and the right people to meet the challenge?
Establish your vision and think carefully about the ‘sweet spot’, working out what is driving the most profit. This will feed into shaping your big goals for the future and help you to identify the steps you need to take to get there.
You might want to rank at the top of Google, or create a recognisable brand – bring your vision to life by doing your research and planning ahead in your financial strategy.
Keep your big hairy audacious goal in your back pocket, and strive to continuously improve the business by forward planning, visualising where you want to be and how you’re going to get there. Only by setting goals and achieving them can you truly feel business happiness.