Easy, you start with R10m!
When I suggest to people that they start their own business their first reaction is “I don’t have the money! or “I must first get enough capital!”
However, is this necessary when starting your own business? The answer is NO!
Discussing this recently with the members of my network, who are all in business themselves, we decided to identify exactly how each of us had started and so provide some broad guidelines to those who currently feel as we did then.
We came to the following, sometimes surprising, conclusions:
• Firstly, most of us had decided to “do our own thing” because we were unhappy with “reporting to a boss”. We were dissatisfied with our lives in general and struggled to get out of bed in the morning. We also were definitely not going to get rich on a salary!
We concluded that we had regarded our original jobs as a method of getting money to do those things we were interested in. And these activities happened after hours or over weekends e.g. writing, playing in a band, taking photos, writing computer programmes etc.
• Secondly, we all had very little money when we started out - we only had our previous month’s pay, leave payment and our retirement benefit amounts as the banks were absolutely no help at all! Note: Banks are only interested in lending you money when you do not need it!
• Thirdly, we all started offering the same, or similar, services to those we had been delivering when we were employees e.g. those in human resources started with an employment agency or head hunting or training services, those in production planning offered project management services, those in sales started selling property - or cars - from their homes, those in IT offered website design, those in engineering started making security gates etc. In other words, our skills dictated what business we started. Since then each of us has expanded on the range of services/products offered and some have even moved into different fields.
• Fourthly, all of our first sales were to our previous employers and/or to people referred to us through our previous employers, our friends, family and their acquaintances.
We identified that we had received the most help, advice and work from acquaintances and not from friends or family! The latter were mostly critical and negative about our chances of success.
• Fifthly, we had all adopted the approach that each sale made had to generate enough money to enable further sales activities. In short, the income from each sale had to be enough to meet the bills and cover the costs of the next sale.
• Sixth, sales activities were, and are, ongoing with the most successful methods being person-to-person and word-of-mouth. In the beginning most of us spent 80% of our time networking and doing the resultant administrative work after hours and over weekends. But you know what; because we loved what we were doing and we were being paid for it - it was no longer a job!
• Seventh, we had all used friends and family to help us start/design our websites, stationery, bookkeeping systems etc.
We concluded that the most important factor for our success had been, and still is, the number and quality of our relationships as these had, and still do, lead to more work and referrals.
Because of our then unconscious realisation of the value of our relationships we had all taken informal steps to:
• Get and update our contacts’ information - even following them when they changed their employers
• Keep in regular contact with them, personally and telephonically - some more regularly than others.
We are now formalising the management of our relationships with our clients to strengthen and expand them as this will have a positive impact on our bottom-lines.
We will be basing this on the following information.
When we started we made 2 basic mistakes when following up, namely:
• either we didn’t follow up often enough. When follow-up was inconsistent and infrequent, time and marketing spend was wasted. Our contacts didn’t remember who we were and those that did simply regarded us as nuisances.
• or, we followed up too often as a result of which our contacts took active steps to avoid us.
Each client has his/her unique reaction to follow-up activities, some get upset, some see them as being too infrequent etc.
Below are some key, follow-up principles we will be testing to find out which is the most effective:
• Enough messages must be received and read/heard to keep our name fresh in our contacts' minds
• Follow-up must be consistent
• Our messages should be building a relationship with our contacts i.e. the purpose of follow-up is not only to ask “Have you signed the contract yet?”
• Valuable and educational materials should be sent as well as our marketing message
• We must be personal, real and a little entertaining.
I think that the most suitable method and frequency of follow-up will be decided by the specific individual contact and this can only be determined from a fairly in-depth knowledge of the individual him-/herself as well as of his/her occupational and personal circumstances.
Again, the knowledge gained from strengthened and in-depth relationships is critical.
