Start-up Confidential: Why I’ve ripped up the business plan
Our secret start-up has had an epiphany. But will such a dramatic change in approach work?
This week I had the latest in a series of meetings with people who have successfully started up, run and sold businesses in my sector. It has been inspiring, listening to people who have been there and done it with bells on. It has also been an experience which has led me to completely re-evaluate my approach to growth.
Back at the very start, as a business which sells professional services, I had decided in my first year to target organic sales growth built on strong and lasting relationships.
Having spent the best part of 10 years in my previous job killing myself to win new clients simply to meet sales targets only to see we were unable to hold on to the ones we already had, I had come to the conclusion that there was no point in this leaky bucket approach to client acquisition. I decided to put clients first and let revenues will follow.
So far, doing things my way has worked well. My business has a small but strong group of loyal clients where we do good work. The relationships look set for the long term and revenues are healthy for this year and into the next.
Not bad for the first nine months of trading, I thought.
Well not quite. As the successful entrepreneur I met this week made very clear to me, while it is a good start it isn’t the right start.
Revenues and profits may be strong now, but nurturing existing clients and winning business through networking alone will never be enough to build a really resilient business, he told me. I need to spend more time working on selling the business to new clients than on the business that was coming in.
He is, of course, right. Great businesses tend to become great businesses not just because of a great product but because they have a knack for selling what people want, time and time again.
So I have decided to rip up my business plan and start again from scratch. It’s not a complete change in course – I still want a business built around happy clients and great work – I just want to win a lot more of them a lot more quickly. It’ll mean a lot more risk and a lot more investment of my own money but it should also mean a lot more reward.