Running a successful business is often compared to running a marathon – people can’t just turn up at the starting line and expect to win the race.
Preparation and good foundations are key.
And, so it is in business.
At some point, a growing small business will look for a “big fish” client, but it’s not always easy.
As a small-business owner in a regional area and mentor to other SME owners, I know this experience all too well.
One of our companies, an environmental consultancy, started over two decades ago with one small contract in the resources industry. Like most small businesses, it was all calm on the surface whilst we paddled like mad underneath to deliver what was promised.
That was a steep learning curve, but it went on to secure bigger contracts, and still proudly retains that first client.
We were able to use the skills, equipment and credibility from that first project to bid for, and win, more significant contracts. Our preparation had to go to another level.
Back when we won that first resources contract, we knew about working with big organisations. It was the specific mining-company stuff that we were missing.
Every industry or even every company that you work with will be different. If you want to play a bigger game, you have to know the rules and do your training in advance.
Here are my five biggest lessons from that 20 years of growing:
1 Understand supply chains
We all know what happens when a link in a chain breaks – the whole chain fails. Your big customers see you as that potential weak link. They have customers to satisfy and contracts to fulfil. They don’t want to be let down by you not being able to complete your part. So, get your house in order and deliver what you promise.
2 Your financial health
The fact that many small businesses fail in their first five years of existence is no secret. If you are likely to be one of those businesses, you are that weak link. You may be grilled on the financial health of your business, so be sure you know your numbers.
3 Their financial policies
This is the ultimate irony. While big companies will examine your financial entrails to ensure you don’t present a risk, their own policies are often the precise reason for any financial weakness.
Australia holds the world record for late payments, and the worst offenders are the major corporates. Know what their payment terms are, and what effect they will have on your cashflow. Even if the contract says 30 days, don’t rely on getting paid on time. Ensure you have contingencies and funds to keep yourself afloat.
Big companies talk about DIFOTQ (don’t you just love acronyms?!).
Delivery in full, on time, with quality. Quality, in this context, means “fit for purpose” – in other words, what the customer wanted.
That need not necessarily be the gold-plated, super-duper, best-in-the-world version of your product or service – just the one that the customer wants.
5 Know the industry
Make sure you “speak the lingo” if you are venturing outside your immediate comfort zone – as I was all those years ago. Every industry has its own peculiarities, so you need to be up to speed. I call this “paying the admission price”.
Landing that big client will require a major effort on your part. As much as I would like to pretend otherwise, you’re going to have to do the work if you want to reap the rewards of having that big client on your list.
Bronwyn Reid, Owner, Small Company Big Business
This post first appeared on https://insidesmallbusiness.com.au on September 16, 2019.