Ann Hawkins, Inspired Business Mentor

David F Smallman, Managing Partner of Pathfinder Team Consulting,  invited participants in The Inspired Group to ask him any question about business. These are his answers:

Q. What advice would you give someone in their first year of business?

A. Don’t lose the passion. Ever. Not even in your 42^nd year.

Q. Is it wise to use an untested business model?

A.  No. Get it tested.

Q. How do you make sure a new idea doesn’t get stolen before you develop it?

A. Keep it out of the public domain until you’ve had it patented, trade marked etc. Non disclosure agreements are hard to enforce.

Q. What is the best way to price your services?

A. Price the project according to the value to the customer. This may mean that you charge two very different prices for the same work. Charge 25% up front, then two further instalments of 25% and 50%. In over 40 years in business we’ve never had a significant bad debt or had to waste time chasing money.  Cash flow is vitally important and this way, your expenses are covered before you start.

Q. What is the single most important ingredient in creating a successful business?

A. Passion (as above)

Q. What one channel would you choose to market a business?

A. It depends on the type of business:
Manufacturing – distribution / sub contractors
Service Provision – figure out how your customers/clients like to buy and meet them there
Accounting / Financial services – traditional routes are still working

Q. What will the future economic power of the UK be like?
A. Look out for a debate between David and Phil Jones of Excitant Ltd on this topic. David recommends reading The Big Short by Michael Lewis.

Q. If the three essentials of business are producing the product or service, managing and marketing, what time should a business owner spend on each.
A. In a 60 hour week (which most business owners admit to working)

Marketing 55%  – 33 hours
Making       35% – 21 hours
Managing   10% -   6 hours
Anyone spending more than 6 hours managing a business needs to streamline or outsource and ask themselves if they using this as an excuse not to do the marketing.

Similarly, when marketing, use the same equation:
Existing customers 55%
Short term prospects 33%
Long term prospects 10%

Q. Should we strive to continuously make our services or products better?
A. Excellence can sometimes be the death of a business. Quality is what is good enough to satisfy the customer.

Q. Is social media providing businesses that use it with an advantage?
A.  Many big businesses just haven’t got it yet but many smaller businesses are using Social Media to great advantage so it gives them an edge in engaging, listening and providing what customers want.

There are more questions and answers on the LinkedIn discussion http://lnkd.in/Hw4QVb

Questions that David didn’t have time to answer:

Is there a particular hobby or pastime  associated with business success?
Is there a difference between leadership and management? (See http://lnkd.in/xMdyjG for this discussion)
What is the best strategy to cope with a business failure?