Tuesday, February 05, 2013

Things I learned from running my own business

In 1998 I helped found Salt and Light Greetings with my wife, Cathy. It had a very simple premise. She would design cards and I would sell them to shops. Over the next four years we supplied shops from Jersey to Aberdeen, Liverpool to Lowestoft. We also partnered with other businesses to produce calendars, height charts, and cross-stitch kits.
Looking back, there are many things I’d do differently. Of course, the landscape has changed. These days we would set up a Blog / Twitter / Facebook presence and try to recruit fans to the project. We had many comments from people who loved Cathy’s designs. We could do more direct selling to the public, but there are several other things I’d try and do as well.

It took us a while to do a mailshot. When we started out I would drive to shops to make sales calls. This was time-consuming and a day of several unsuccessful appointments was soul-destroying.
I researched mailshots, reading Power Direct Marketing by Ray Jutkins and other books, and based our letters on industry good practice. We had a response rate of 20 per cent for one mailshot, and our response rate never dipped below five per cent.
20 per cent is a miraculous rate of return. The reasons? A highly-targetted list. Clear special offers. Very easy-to-use order forms – including one where all you had to do was fill in your name and address and tick one box to get all the cards at a special rate, post-free. Plus our letter that outlined that we were a small business, but we were friendly and we wanted to work with people.
The lesson: If I was starting a business now I would build a highly targeted list and mail to it sooner rather than later.

Other lessons
After a while I wasn’t afraid to chase late-payers, including faxing or phoning every day until we got our money. When I started out I would often let the 30-day period lapse and wait another month or more before contacting people. I changed when I realised that not paying on time was akin to people stealing from us. So I chased the payments.
I can’t remember which book by Mark H McCormack said you should never be afraid to fire your customers. I took that to heart and we blacklisted persistent late payers and refused to supply them. Continuing to do business with unreliable or unethical people can only harm your business. It can be hard to say ‘No’ to people when you run your own business, but you have to sometimes.
If I did it over again I would seek out more partnerships and licensing opportunities. We had great success partnering with other businesses who wanted to use Cathy’s designs on products we couldn’t afford to invest in. Knowing what I know now I would try to partner with more people. The benefit is that they do the hard work of selling and you get paid for it.
I would also look for premises to operate the business in. They cost money, but the psychological advantage of having to get up and go to an office would be good for personal discipline and motivation. It would also mean I could leave the work behind and get a proper break from it. We spent a couple of years with boxes of cards stacked behind the living room sofa, acting as a reminder of how many we still had to sell. That’s the kind of low-level pressure that builds up until eventually I completely lost my enthusiasm for the project.
Finally, I would network more. I think there is more of an emphasis on networking these days, or maybe I just know more business owners who go to business breakfasts and the like. The pressure was on to make sales and so sometimes I discounted the importance of maintaining a network of contacts who I couldn’t sell to. What I’ve learned is that people buy based on recommendations and word of mouth is the cheapest way of selling there is, so I would put time in to build a network.

A final thought
We set up our own business without really knowing what we were getting into. I don’t think we’re so different from most people who set up their own businesses in that respect. The main thing is you have to want it to work. You can’t go in half-hearted. You have to commit. I think the biggest reason so many small businesses fail is because people don’t realise how hard it can be.
The main point of my sharing these lessons I’ve learned is to help people find it less hard when they decide to set up their own business. I hope these lessons are helpful.

No comments:

Post a Comment