5 Years to Reflect and Grow
In my first 5 years of business, I had grown my business from a sole trader with $2k of savings in the bank to an established multi-disciplined contracting business with numerous opportunities with a turnover in excess of 1mil…. link to story
The Principles of Change
While it had taken my business 5 years to become established, I had always struggled with unpaid debts….
It is unconscionable for people to request work to be completed without ever intending to pay for it.
My experience of working in those first 5 years were based upon remote and regional private sector contracts. They were small in value and arduous to implement because of their size. Small and inconsistent projects made it a challenge.
Even though my customers in the region were generally supportive, I consistently had ~10% of unpaid debts. 10% was my basic margin of profit. So while I wasn’t losing money, I wasn’t making a profit from those people.
I learnt early, ‘the money that you lose is money you never get back’. It’s not like you can charge your next customer for the money you had lost earlier to make up for it….
“The money you lose is money you never get back.”
Unless I undertook to change how I operated my business I would need to look elsewhere. Something had to change:
- I wanted project consistency,
- I wanted customers with financial stability,
- I wanted to be paid on time,
- I wanted to be able to program my workforce to be efficient,
- I wanted to create growth opportunities for my business.
These are the issues that I had faced for my first 5 years and I wanted to change.
Finding Growth Opportunities
Before I began taking an objective approach, all that I noticed was my geographic remoteness and lack of population density. These were my excuses for business stagnation….
Finding growth opportunities while working in a business is quite difficult. This is because you become so accustomed to how you do business, opportunities seam to blend in with everything else that your business is doing and they are easily missed.
During my first 5 years I had never really taken an objective approach to my business.
I had always understood the concept ‘that setting goals will help you focus on what is important in order to achieve them’, but I had done what every other business does….. just keep an eye on the bottom line and make sure the bank balance is growing and not falling.
My business was stuck in a stable but primitive business balance. This is because business is much more than just the bank balance. If you want to succeed, work on improving your weaknesses while maintaining your strengths.
“Improve your weaknesses and maintain your strengths”
I realised that I was in a financial limbo, that things weren’t really growing and they weren’t exactly getting worse either. This is when I knew there was something that I could do to begin finding opportunities again.
I made it my purpose to re-examine what my business was all about. I took the strategic focus of building a structured review of myself and my business. I made a plan.
Once I began to approach business with a plan, it felt like I had a greater purpose. That purpose fuelled business possibilities and enabled me to actively seek opportunities.
Taking a Step Forward
I had already focussed on expanding my geographic footprint to increase my customer base.
The next obvious choice was to begin exploring other opportunities that were available in the region. That included diversity of customers, diversity of services and what integration I could adopt with my existing business.
There were various revenue opportunities that immediately came to surface. I wrote down each of them; pastoral services, government services, energy services. These were all clear opportunities that could be avenues for revenue growth in my region.
Then I wanted to understand what made these ‘suited to my needs’. Because “business is a 2 way street”. The perfect customer will have an expectation from it’s perfect supplier. It’s when both the customer and the supplier know what each other want that they have the best chance of building a long term business relationship.
“Business is a 2 way street”
I decided to target all of my listed opportunities. While there were clear synergies with each of them, it became obvious that there was a clear gap that each fell short on….. “I wanted project consistency”.
It was at this moment that I understood what my pastoral and government services required. This was all very healthy for business, but they fell short of consistency because my services did not offer those customers what could be converted to reliable ongoing projects.
It was only during this time that I could see how to close the gap and create an opportunity for project consistency (which is what I needed).
I could easily see that the global market for energy resources were constantly increasing, and, wherever energy could be immediately sourced, would be my best opportunity for immediate growth.
Once I had my focus, I was relentless in my pursuit of building an energy industry presence.
It was a formidable task, and there were times that I felt it was nothing more than a wasted effort. But my persistence rallied with a small success. . (link to story)
As the effort grew, I had to find consistency by seeking complimentary customers.
I remember printing a list of ALL listed ASX energy companies. I went through and marked off each company with a revenue and location that suited my ‘target customer’.
I knew that my systems were inferior to major construction companies, but those companies rarely serviced small to mid tier energy companies with the respect that they required.
I had found my niche. I knew that I could provide my target customer with exactly what they wanted. However, for me to grow the business beyond their vision I had to develop my business to satisfy future scaled business needs.
Be Ahead of the Curve
To anticipate where the business will end up is somewhat difficult. Although my focus was on:
- Being better than my competition,
- Knowing what my competition do well,
- Be a stand out performer in what my competition does poorly.
- Become a safe supplier of choice,
- Under promise and over deliver,
- Continually improve,
- Build a reputation for success.
If I was to master these aspects of my business, it would unlock countless opportunities.
To be ahead of the curve, I noticed that (A) Tier 1 supply companies were at their peak…. (B) That they had founded processes which controlled their market position…..
These are the gaps as I could see it:
- They were vulnerable to nimble and lean competitors,
- Mid tier customers wanted simple, lean and safe suppliers,
- They performed poorly in remote “decentralised” locations.
I focussed on these weaknesses. If I could get these right, I would be ahead of the curve.
Setting Wheels in Motion
Over the course of my next 5 years:
- I had began my controlled business journey with a plan.
- I had discovered my ‘best fit’ customer.
- I had quarantined myself from the inconsistency and financial stagnation that had been keeping me trapped, and
- I knew what I had to do to grow.
Through those years I had began a growth trajectory for the business. We grew from a $1 million revenue company to a $20 million revenue company that employed ~100 people at its peak. We had developed a credible company with an integrated management system that controlled Health, Safety, Environmental, Quality, Human Resources and Operations.
The business had built long term business relationships and long term contracts.
The next 5 years would see our business grow, become internationally certified, become an award winning business and then suffer an incredible legal battle.
Written by Geoff Pike, Entrepreneur, Speaker & Business Mentor
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Geoff founded a sole trader plumbing business in a remotely located and vastly underpopulated location in outback Australia. Starting business with only enough money to pay 4 weeks wages, Geoff persisted by growing the business into a multi-disciplined trade services company. Over a period of 12 years, the company Geoff established grew to employ a workforce of over 300 personnel covering an area almost half the size of Europe, receiving international award recognition with an annual revenue of over $30mil. Geoff knows what it takes to overcome adversity.