As small business owners, it’s almost a rite of passage to make mistakes – and lots of them.
For some, simple mistakes can become a crisis while for others a misstep is a valuable learning experience.
Our Smart50 finalists and winners are growth businesses – they’ve made a few blunders but they’ve endured and thrived. Here, four winning Smart50 business owners share some of their mistakes and how they fixed them as well as some been-there, done-that advice.
Keep cash in your back pocket
Tony Nash, CEO of Booktopia (co-winner of the Community Hero Award), says doing your sums is essential, especially when it comes to raising more capital to grow the business.
“Booktopia is completely self-funded and we spent $3.9m on an attempted initial product offering (IPO) and we really should have had the money set aside from the outset rather than trying to pay for it from the proceeds from business,” he tells SmartCompany.
“Our suppliers had to wait to be paid longer than usual. We called on a lot of favours during that time period.”
Nash recommends setting aside any cash required to do a capital raise before you start to avoid the issues Booktopia faced.
Advice for small business owners: “Mistakes are just one version of doing something that didn’t work. Try another tactic if your intention is to accomplish whatever it was that you set out to do.”
Think outside the box
When Andy Fryer, director of EasySigns (Top Innovator Award winner) started his signage company in 2006 he took advantage of rapidly changing technology to print signs that competitors were still making using cut-vinyl shapes.
He adopted a traditional signage business model which consisted of advertising, sending someone to measure and quote, producing the products in five to seven days, then installing the signs. But he kept hitting roadblocks.
“With sheer persistence we managed to grow the business to approximately 22 staff, however every day was spent frustrated about the number of errors and overdue jobs,” he says.
“When we realised we had made a mistake and that the model we were pursuing was outdated; we were still attempting to scale up but kept hitting challenge after challenge.”
They identified they were good at manufacturing and shipping to customers but on-site measurements and installations yielded poor results.
So he made some tough decisions – they made half their staff redundant and re-grouped.
“We went to work on revolutionising the signage and wide-format printing industry,” he says.
“Three years on from that change, we are in a factory four times the size of the one we were in previously, we have grown from 11 staff up to 46 and instead of seven-day lead times for our products, over 75% of our range is produced in 24 hours.”
Advice for small business owners: “Never stop innovating or doing something in a particular way just because it is what someone else is doing, or is the way it has always been done. It’s never too late to make a change, small or large.”
Be brave in your business
Not backing yourself in your business can be just as detrimental as any other small business blunder. Ben Kingsley, CEO and founder of Empower Wealth (Top Marketer Award winner) says two years ago he failed to scale up his business to meet demand, resulting in much longer wait times for his clients and increased workloads and stress levels for his staff.
“I made the mistake in not believing the strong growth was sustainable,” he says. “Even though I wholeheartedly believe we had a fantastic value proposition in our marketplace, I was slow off the mark in bringing new staff on to handle the growing demand.”
Kingsley says he had to kickstart his own confidence and has stopped being conservative about forecasts for future growth. He has also become more proactive with recruitment.
“We base our future recruitment on these new projections and ensure we hire earlier, giving these new staff time to find their feet with our way of doing things, so they don’t have to jump in the deep end straight away,” he says. “We also went about revisiting our technology, our systems and our processes to find greater efficiencies and opportunities to help our clients.”
Advice for small business owners: “You can’t change the past, but you can learn from it, both the good and the bad. Still, when it does start to grow quicker than you imagined, you need to back yourself and surround yourself with quality people who can help you navigate new and unfamiliar ground.”
Make sure the left hand talks to the right hand
In startups, communication is usually much easier as there are fewer people. But when a business grows, so do teams and, like any once-stable relationship, people can drift apart.
David Vitek, CEO of hipages (co-winner of the Community Hero Award) said when his trades platform grew, his staff stopped collaborating and started to operate on different wavelengths.
“We started to see a certain disconnect appear in terms of consistent strategy building,” he says. “What used to be a straightforward process started to become harder to implement, with five focus teams working on their own strategies. But these strategies were not working well together.”
The disconnect was costing the company time and energy, and Vitek was forced to engineer a process where staff could take a step back, refocus and find a business strategy that worked. He initiated strategic sessions with larger groups, with more than 20 team members working for four weeks on the overall business strategy.
“We needed one that would resonate with each of the teams but also work holistically,” he says. “On top of restructuring the teams, we have started weekly showcases with all teams presenting and keeping everyone up to date with what they are working on. This allows for better communication flows between teams, and ultimately more collaboration.”
Advice for small business owners: “You need to constantly reflect on the overall strategy of the business, involving multiple teams in the thought process and ensuring you have a solid plan that resonates with everyone. Accept that you’re going to make mistakes and understand that it is how you respond to them that makes you a great leader; not the fact that you don’t make mistakes.”
Mastercard seeks to help as many Australian retailers as possible, to grow their businesses by embracing all forms of payment to provide customers the choice to make transactions whichever way they want to, with no restrictions.
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