This time next year Rodney, we’ll be Millionaires!

Most business owners are not Derek Trotter, but many share Del Boy’s ambition when they start out; they see themselves at the helm of a multi-million pound business, perhaps even a multi-billion pound business.

But here’s the harsh reality: statistically, only 4% of business owners ever reach the £1million mark, and only 10% of £1million businesses ever reach the £10million mark (that’s 0.4% of all business owners).

So what’s getting in the way of 2.5 million UK businesses punching through that £1million barrier?

Multi-award-winning business coach Shweta Jhajharia puts it down to something called the Complexity Ceiling.

“The first year of the life of a business is the most critical,” says Shweta. “The start-up year defines whether a business has any survival potential and whether it has the potential to reach the £1million mark.”

Shweta points out that no formal education or qualification is required to starting a business. On one hand, that’s great. Anyone can do it. On the other hand, the ease with which people can start their own business can lead many people to assume that what they already know will see them through. However, it most cases, new business owners discover they have a lot to learn, and much of their first year is spent finding their feet.

And if a business makes this kind of start, it builds the pillars that support the ceiling it will eventually hit. “A business reaches this ceiling when it becomes trapped in what is sometimes called the Hindu Rate of Growth,” explains Shweta. “That’s an average growth rate of around 3% each year, which, most of the time, is just enough to keep pace with inflation. If a £500,000-size business grows at 3% every year, how long will it take to cross the £1million mark? The answer, despite the magic of compounding, is 24 years! Many business owners will have already looked at succession or retirement before those 24 years are up.”

For a business to reach the £1million mark before its owner starts yearning for more time on the golf course, it needs to employ new systems to allow growth to happen. “But because of the way many businesses operated as a start-up, further improvement and growth is too complex for them to handle and pursue,” says Shweta. “What allowed many entrepreneurs to run a successful small business simply cannot support larger, more complex teams and issues.”
So what can someone with a great business idea do to ensure their start-up makes the best possible start?

The advice from Shweta is simple: find out what you don’t know: “For example, a key skill is mastering the language of numbers. Profit, Sales, Cash Flow, Receivables, Assets, Equity, ROI, Average Value Sale, Conversion Rate. These are all numbers that the professional business person must be fluent in. It’s not enough just to understand these numbers, they need to be leveraged for every decision in the business. In marketing, sales, team management and leadership there are key metrics to measure, estimate and average in order to evaluate the probability of effects and justify decisions and calculated risks that will lead to sustainable growth.”

But how does a fledgling entrepreneur find out what they don’t know? They ask. Mike Smith from Ripley Training says “one of the most efficient way is to access training like Finance for Non-Financial Managers, Leadership and Sales and Marketing to help you to develop and enhance your skills and knowledge. Accessing external training and follow up coaching can give you a clearer view on your business and how you plan for the future. If time is on your side, you could also combine this approach with joining a local chamber or networking group and learn from your peers.”

Whichever route you choose, here’s to this time next year …

Are you Inspiring & Motivating your Team?

1. Value People and their significant contributions - People want to feel that they are valued and that they can contribute to others. They need to see that what they are doing is not wasted effort, but is making a contribution. People must see value in what they are doing. Motivation comes not by activity alone, but by the desire to reach the end results. Inspire others by listening actively. Listening to what other people has to say inspires them to open up and put their confidence in you. You inspire others when you show them that you take the time to know and understand them.
2. Good Participation - People support what they create. Being a part of the goal-setting process is motivating and it allows people to feel needed. They like to feel they are making a difference. When people have given input, they have a stake in the issue. They own it and support it. Seeing goals become reality and helping to shape the future is fulfilling. Goal participation builds team spirit, enhances morale, and helps everyone feel important.
3. Positive Words - Positive words inspire positive emotions. Encourage others by reminding them of their talents, skills, and gifts. Focus on what they have done and not what they haven’t done. Project a positive personality. There is no better way to inspire others than by being filled with enthusiasm yourself. This enthusiasm is energy that easily spreads from one person to the next. To be effective, enthusiasm must be genuine; there is no faking enthusiasm. Encourage through difficult times and you’ll be inspiring your staff to see the best in themselves.
4. Be a good Communicator - Increasing your ability to communicate effectively is a critical element for you to inspire others. Watch how you speak and what you say. Invest in your communication skills.
5. Be Vulnerable - Be willing to share your failures as well as your successes. Others will relate to you. They’ll understand that they’re not the only ones with challenges.
6. Role Model - People are inspired by those who “walk the walk”. Do not be afraid to share your own stories of accomplishment. Leaders who inspire practice what they preach and lead by example. People need to believe in what is possible. Stories that people can relate to can be very inspiring. Choose stories that convey the same message you are trying get across.
7. Positive dissatisfaction - Someone said that dissatisfaction is the one-word definition for motivation. Dissatisfied people are highly motivated people, for they see the need for immediate change. They know something is wrong and often know what needs to be done. Dissatisfaction can inspire change or it can lead to a critical spirit. It can lead to apathy or stir one into action. The key is harnessing this energy toward effective change.
8. Recognition – People want to be noticed. They want credit for personal achievements and appreciation for their contributions. Recognition is one way to give meaning to a person’s existence.
9. Show others you genuinely care - People don’t care about how much you know until they know how much you care. Take a genuine interest in other people.
10. Clear expectations - People are motivated when they know exactly what they are to do and have the confidence that they can do it successfully. No one wants to jump into a tank that is vague or a job whose description is uncertain. Motivation rises in a job when the goals, expectations, and responsibilities are clearly understood. When delegating responsibility, be sure to give the necessary authority to carry out the task. People perform better when they have some control over their work and their time. Those leaders whom we love to hate are the ones who challenge us to do our best. A properly executed challenge can both motivate and inspire.

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