Being a survivalist entrepreneur or running a small business in survival mode is much the same as being a patient in the ICU unit according to John Gillespie, a financial consultant and founder of Beyond the Bottom Line.
Just as critical-care patients are vulnerable to unpredictable ups and downs, so too are entrepreneurs in survival mode susceptible to being stuck in a reactionary mindset for far too long.
As a result, he explains in an interview with Entrepreneur.com, that many entrepreneurs and small business owners are not capitalising on opportunities to generate new revenue streams.
“If you’re always focused on preserving the assets you have and you’re afraid to commit to future plans, you’re going to miss opportunities. If you’re in firefighting mode and every day you’re stepping back and saying: ‘Phew, I’m glad we solved that crisis’, you’re never going to grow,” he says.
In SA, programmes like Raizcorp and Nedbank’s Simply Biz Shift Questions workshop – designed to help small business owners change the way they think about their business and approach to development – are helping entrepreneurs “unlock” new opportunities and ultimately accelerate business growth.
Raizcorp CEO Allon Raiz says entrepreneurs need to realise that there is no ‘copy and paste, one-size-fits-all’ formula to business development. Rather, he says, the key to moving your small entrepreneurial venture into an established enterprise lies in asking the right questions at the right time, and most importantly, in the right sequence.
“Many people have this notion that if they follow the exact steps that a ‘successful’ entrepreneur took in their own journey, they too will become successful,” says Raiz.
“As a young man I asked my mentor what the secret was to becoming wealthy. He gave me a rather unexpected answer and said the secret to shifting my own mindset as well as my business was asking myself the right questions and answering them honestly.”
Here are five strategies you can adopt to move your business from survival mode to an established and attractive enterprise.
1. Know where you stand
A good place to start in determining whether your business is ready to undertake the move is understanding where your business lies on the survival-growth scale.
“You’ve got to first figure out whether the patient is stabilised. Self reflection and reality checks are important before you proceed and you want to make sure you can calm down and get your bearings so you can honestly assess where you stand,” Gillespie advises in the article.
He suggests that you ask yourself three basic questions to help you gauge where you currently stand: is the company at cash flow break even? Can you tackle your growth initiatives with existing staff? Does your company have existing cash or credit lines that can be used for growth?
2. Focus on Human Resources
Gauging your employees mindsets is just as important as knowing the financial standing of your business and this means knowing whether employees are ready to trade in reactionary thinking for proactive thinking and the cultural changes that go hand-in-hand with growing a business.
“In turnaround I’ve dealt with it has been important to have some honest conversations with existing staff members to find out if they have the stomach to focus on new inititatives or if they’re tired and out interviewing someplace else,” says Elizabeth Gasper, MD of Beyond the Bottom Line’s West Coast operations.
3. Know why you’re surviving
- This is where the role of a mentor plays a critical part in helping you understand the value of your business and assessing your company’s strengths and weaknesses.
Enterprise development programmes like the Vuka Mentorship Programme, which connects corporates with SMEs to advise small business owners on the measures required to make their businesses more sustainable.
“Through a structured, verifiable and measured approach, the programme is engaging with corporate businesses to help numerous entrepreneurs shift their business mindset and implement measures that will make their enterprises more sustainable. Subsequently, the programme is helping to significantly grow the community supplier base of corporate companies,” says Sharon Reed, founder of the Vuka Mentorship Programme.
- Plan for transition
Planning for the big move, Gillespie says, is akin to “transferring the patient from surgery to a gurney”, so it means informing and preparing your key clients or customers about your growth plans and talking though some of their anticipated future needs.
It also means conducting extensive market research and securing additional financing, whether it’s in the form of creating new lines of credit or securing enterprise development grants or loans.
- Mitigate risk
“You have to ask yourself if you’re ready to ride that roller coaster of pursuing a new venture and understand that you may stumble along the way from time to time,” says Gillespie.
Always devise flexible backup plans to mitigate any risk that may occur during the growth transition phase.
Gillespie says employing consultants over full-time employees is advantageous when you want to facilitate growth acceleration with a lowered risk.
“When you want to grow quickly you want to be able to pull people in from the marketplace without taking in a lot more fixed costs,” he advises.
Pavlo Phitidis’ top tips to building an asset of value:
Serial entrepreneur and Aurik Business Accelerator CEO Pavlo Phitidis says moving your business from surviving to thriving means building assets of value.
“Passion is important since without it you won’t even get out of the starting blocks, but purpose is equally important and the purpose of an entrepreneur should be to build their business into an asset of value. A survivalist entrepreneur by no means has or will ever have an asset of value unless they change their mindset, and most importantly, how they build their business,” he advises.
- Understand what makes a business attractive to a buyer. Put yourself in their shoes and ask: ‘Would I buy my business?’
- Understand how to value a business and then value yours. Again, you are acting as the buyer – happy with the result?
- Look at how you can improve the valuation of your business and build a course of action
- Stick to your programme. A course of action with no discipline is either sloppy or will never be implemented
- Don’t blame. Look at all the things you want to blame for whatever reason and that’s where the opportunity to act and take responsibility lies in solving or innovating your business challenge