Blueprint for success

Building a team

Another area that business owners tend to struggle with is team building (assuming they have a team).

When people start a business, they often end up creating a job for themselves without the benefits that come with being employed by a big corporation. Practice owners can often be found working on evenings and weekends, troubleshooting issues, and, as they only get paid when they produce work, they are constantly worried about the next move beyond survival. If they disappeared for four weeks, the business would cease trading.

A thriving business venture can be defined as "a commercial and profitable enterprise which works without you." This can only be achieved when you are able to delegate work. In other words, a thriving business is defined by a thriving team.

Consider the graphic below.

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The red arrows denote all the problems that, in most businesses, get directed to the business owner or founder. As a result of this bottle-neck effect, the practice owner becomes overwhelmed, is unable to do it all and operations are slowed down or even paralysed.

This is why it is a good business strategy to focus on effective team building:

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When a business owner's focus shifts towards team building, a self-sustaining business is born: the practice owner looks after the team, the team takes care of the clients and their problems, the satisfied clients take care of the business, and the business sustains the founder.

Adopting a circular business model is therefore beneficial for all parties involved. But how can you shift towards it?

Recruitment and management tips

• Start recruiting before a hire is urgently needed (ie, when someone leaves, or a big project comes in) to be more selective.

• Focus on finding and developing star players that well align with your ethos.

• Recognise good performance frequently and address poor performance swiftly - good management involves effective communication and engaging employees to care about their work.

Take action

• Rate your team-building skills out of 10 (0 meaning you have no written recruitment strategy and do not understand how building a team leads to building a business, 10 meaning you are a premier league-winning team builder where everyone is working towards the same vision and knows their role (in writing!) in getting there).

• Now ask yourself what one action you must take to move 2 points forward.

Maximising profits

A third area business owners often need a change of mindset in is profits management.

Profit margins are crucial to creating a resilient business, but practice owners often find themselves over-servicing their clients for little return and with limited resources.

The leading cause of this dynamic is the fear of losing business opportunities when new ones arise, or when clients make requests outside the initial project brief. To remain competitive, practice owners usually sell their services at a discounted rate—either formally by advertising a reduced fee, or informally, by spending more unpaid time on the project.

Yet, regardless of the price at which you sell your services, your overall costs remain the same, so discounting has a direct impact on your profit.

Consider the diagram below:

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If you discount your service by 10%, you must sell double the services to make the same profit you would have had if you had not discounted at all. On the other hand, if you increase your prices by 10%, you can afford to lose 1/3 of your clients, yet your overall retained profit remains the same.

Most practice owners are afraid to lose clients, yet the ones that would be lost when fees are increased are normally the ones that would pay the least anyway—the ones that would cause the most problems by requesting additional services post-brief and are the least profitable.

Improving profitability tips

• Cost management: track budgeted versus actual time spent on projects and say “no” to extra, unpaid work.

• Pricing strategies: avoid the discounting trap and instead focus on marketing to generate more opportunities and position your firm uniquely.

• Sales training: modern sales training emphasises listening, helping, and building genuine relationships. Skills like pitching, objection handling, and negotiation can significantly improve success rates in securing projects.

• Team coaching: train your team to manage client expectations and avoid doing free work outside the initial project brief.

Take action

• Rate your money skills out of 10 (0 meaning you have no idea how much profit you make or where your money goes; 10 meaning you are financially literate and understand how profits lead to building successful businesses).

• Now ask yourself what one action you must take to move 2 points forward.

Summary

By mastering time management, implementing effective recruitment strategies, and enhancing profitability, you can evolve from being ‘just’ a technical expert (aka, a competent engineer) to a thriving business owner.

Achieving success and becoming a more adept version of yourself is a journey that takes time and is often more fruitful with the guidance of a coach. Just as athletes like Usain Bolt and Tyson Fury, and entrepreneurs like Bill Gates, rely on coaches to reach their full potential, business owners can benefit from an external perspective to achieve their goals and maintain accountability.

Business coach Kuldip Singh Sahota will share insights on improving your business practice at our upcoming SME Business Practice Conference on 10 October.