How to build long term sustainability in your business?
In this episode, Rob discusses how one can build long term sustainability and by asking yourself what is the legacy of your business and do you want to be remembered?
Discover how to maintain consistent growth, the art of selling and how you too, can balance sustainability with scalability in your business.
Sustainability: For your business to be sustainable, first ask yourself what is the legacy of your business? What do you intend it to be at the end of its life? Do you intend to have got a personal computer in every home? Do you intend to help as many people across the planet invest for freedom, choice and profit? Do you intend to sell it in three to five years? Do you ever start to build, sell three to five-year rolling business strategy? Do you want to sell shares? Do you want to sell the whole business? Would you like to be a management buyout? Would you like to pass it on to your children who come through and end up becoming the MD when you become the chairman? Are you clear on what the end of your business looks like? Start with why but start and build your why as you go and do not fail start because you haven't got your why? Do you plan to build an empire? Do you plan to build just a lifestyle business? What’s the end that you want to get to? The more clear you can be as you go and grow in your business, the clearer the direction you have and the more long term sustainability you have.
The next question becomes, how do you maintain this consistent growth? In your early years, you're picking the low hanging fruit of the communities the followers, the fans and the contacts you already have. Then you hit this point where you kind of like sweat, the contacts I already have. Now you got to start doing marketing you've got to do paid ads, you've got to create multiple streams of leads. And then as you do that, and you figure out which am lead sources work for you, then you may be hit another point where you're maxed out in terms of resource and capacity that might be staff or that might be systems. So then you might have to look at staffing up, changing your culture for growth, hiring up before you need, it might then involve doing partnerships and collaborations and joint ventures, so that you can grow to the next level, because obviously, you can achieve a lot more with leveraging others, basically a company to do joint ventures and collaborations with companies. Collaborations, joint ventures, having trainers, partnerships, contractors, consultants take you to the next level of growth.
Next then is do you want to sell? Do you want to retire? Do you want to sell shares on the markets? Do you want a management buyout? Do you want to hand over to your children? If you design your business and systemized it and have good processes and automation and software so that could sell and you make yourself redundant not reliant and you have a good management structure and you have good training processes, even if you decide you don't want to sell it, you can sell it. So you're in a strong position. And you might think that you want to sell the whole thing, but then you may only want to sell shares in it because you've fallen in love with the business, or you want to be involved in its next stage of growth.
Next then is balancing sustainability with scalability. Its kind of like business tends to go in waves. Things break, you need more staff, you need more systems, you've got more to deliver, there's more onus on you, if you're selling products and services that are involved in you, sales are great, grow the sales, but then you increase the customer service, the follow up, the systems that need to cater for, the sales that you've made and this is a balance. And in some ways, it's good to prepare for scale. First, by setting up systems and being ready, having anything that needs to be automated before you go on a big sales push.
Systemizing and staffing before scaling. So if you decide that you want to launch a new vertical, a new product or service and you think that that might bring one to two million pounds into the business, before you think how many staff will be needed? What could break in advance? What's broken before? And what resources needed? What current resources whether that’s staff or systems might be maxed, it might be working now but then might break et cetera, thinking about these before you go on this massive growth path and not just focusing on sales is important.
Next then, is having sustainability and scalability and durability in your business is about preparing for harder times well in advance, prepare for the recession, prepare for Brexit, prepare for staff leaving, prepare for legal challenges, reputational issues, prepare for Lena sales times with cash in the bank and that's really important because if you don't prepare for the worst, then the worst will happen.
Next then is diversifying your risk, your assets, your sources of leads and your sources of income. Believe in multiple streams of leads. Don’t depend on one lead source, like word of mouth or referral, you are at risk. What if there's a reputational issue to your business and no one wants to refer to you anymore? What if your main referees just decide to refer someone else? Then you go from good business to no business.
Trust and training and great staff, communicating your legacy and rescaling of the vision. Sustainability is an ongoing thing, you build layers and levels of protection. That could be you draw some money, but you only draw half of your net profit so that you've got half of your net profit in retained earnings. So that is consistently drawing some money, but paying yourself, which is really important in your business, but also leaving good capital in the business bank account, that's a layer of protection.
Looking at your preparation for exit. Do you just want to keep growing? Are you systemized in your business so that it could be sold or it could run without you? Are you preparing for due diligence process when someone comes in because if someone wants to buy your business, they're not just going to buy it based on what a few spreadsheets and a few management accounts that you send them, they're going to do a full on due diligence process, they're going to want to know that the business isn't reliant on you, they're going to want to know that the management accounts are accurate and the net profit is accurate and there's not much that isn't included in those accounts, they're going to want to know what your reputation is like online, they're going to want to know what systems and processes work and don't, they're going to want to know how much room there is for growth of this business. What capacity is this business at? You’re going to want to be well systemized, you're going to want to have your reputation managed well so that you can go through that process in a relatively short amount of time and then exit your business, whether that shares, or sale, or management buyout, et cetera.
“Start with why but start and build your why as you go and do not fail start because you haven't got your why?”
“Start with the end in mind.”
“Knowing what the legacy of your empire is going to be, enables you to make sounds strategic and not flippant, emotional decision.”
“Collaborations, joint ventures, having trainers, partnerships, contractors, consultants take you to the next level of growth.”
“Scaling, breaking, fixing systemising, and that is business and that happens.”
“If you don't prepare for the worst, then the worst will happen.”
“We all need to know where we're going and why we're doing what we're doing, otherwise, it's just a job.”
“If you want to sustain the growth of your business for the long term, you've got to be reliant on other people.”
ABOUT THE HOST
Rob Moore is a philanthropist and author of 9 business books, 5 UK bestsellers, holds 3 world records for public speaking, entrepreneur, property investor and property educator. Author of global bestseller “Life Leverage” Host of UK’s No.1 business podcast “The Disruptive Entrepreneur”
“If you don't risk anything, you risk everything”