EPISODE 014 | APPLE PODCASTS | SPOTIFY

the 5 RED FLAGS FOR ALL START UPS & SMALL BUSINESS OWNERS 

A few days ago, I came across an article title in the magazine Fast Company, that caught my attention - 5 RED FLAGS TO WATCH OUT FOR WHEN WORKING WITH START-UPS. The article was insightful, and from my personal experience over the last 14 years, it really did focus on the areas that matter the most, and it also highlighted the areas to avoid, the areas where we can easily waste our time and where we shouldn’t be focussed.

The concept of the article was to help investors make sensible decisions when investing with start-ups, but it was bigger than that, as it also offered superb insights for anyone who was thinking about starting their own business and business owners at all stages of start-up and growth.

In the busy-ness of our days, as we are juggling multiple roles, it can absolutely feel overwhelming when we try to figure what needs the most attention within our business, or for budding entrepreneurs, where should we be placing our focus in the future. What are the key aspects that will help us to refine and grow, and ultimately for us to really enjoy the day-to-day successful running of businesses.

My goodness, I have definitely been there where things have felt messy, and it has taken me many years to streamline processes and understand where my attention should be placed. And I would love to fast-track that for you, to help you avoid some of the mistakes I have made and the detailed learnings I have gone through. I really hope this episode will help you enormously.

I hope you will be able to quickly identify the areas where you are already strong and the areas that might need a little attention, and you can then apply these quick and practical strategies to get you back on track, and into a wholly positive place.

RED FLAG 1 - NO CLEAR STRATEGY

For me, a clear business strategy includes an understanding of your market, awareness (albeit not a fixation!) of your competitors, a clear understanding of your exact target audience and your own clear business goals, a mixture of both specific projects and financial targets.

This doesn’t need to be a full-blown business plan, but it’s really important that you can comfortably and naturally describe and explain all of these aspects, almost without thinking, they need to be completely natural and fully embedded within you.

If you find yourself a little lost for words with any of these, then set time aside over the next few days, where you can fully focus and write brief paragraphs for all of them. They don’t need to be perfectly constructed paragraphs, and fully formed plans, we are not looking for perfection, it’s simply to get you started, and clear with your overall understanding and plans.

It’s really important that you know that your plans can all evolve and change, so simply focus on where you are today, and your very initial thoughts. We can come back and refine later. But what’s most important, is to have an initial outline – that’s significantly more powerful and helpful than thinking you will come back to it and do it properly later.

If you know you are a little unclear in any of these areas – your market, your competitors, your target audience and your current business goals - at the end of this episode, mark a day and time in the calendar over the next few days, and find a quiet spot to give yourself time to think, and write your thoughts for each one. And keep this close to you, read frequently, update as you need, and know them inside and out.

RED FLAG 2 - UNDEFINED ROLES & RESPONSIBILITIES

It might well be that your role covers all current responsibilities – I have absolutely been there, where I have had to take responsibility for every role within my business in those start up years. If though your company is a few years in and you have business partners, permanent employees, and/or freelancers, it’s essential that everyone has clear set responsibilities, with everyone working towards achieving the same goals.

Within our business today, we have very clearly set roles and defined responsibilities, together working towards achieving the same projects and goals simultaneously. My roles fall primarily into marketing, content and strategy, alongside creating and teaching our Masterclasses, and I am very much the face and voice of our brand. My other two directors look after our processes, finance, customer service, set building, filming and photography, production and editing, as well as supporting me within our Masterclasses, marketing and strategy; and we have a dedicated team that looks after all our finances, plus freelance support for PR. We are a small team, with very defined roles, with everyone working towards the same strategy.

It feels very streamlined today, but it definitely wasn’t always the case. I have learnt and we have got better. And there are still days where we discover something has been missed. At that point we make a collective decision and someone within the team will take responsibility going forward. It doesn’t mean it’s entirely on their shoulders, it simply means they are leading and planning it, they will ask for support when needed and make sure it gets done in time.

If you are at the stage where you are almost ready to bring in support – and this is something I wished I had done right at the beginning - write a clear role description of what that help will look like, what it will entail, the specific tasks they will they be responsible for and the goals they are working towards, to ensure you are fully supported and together you are working towards achieving the same larger goals.

If you have a team of people and you recognise that some of the areas of responsibility are a little blurred, take time to redefine everyone’s roles and areas of responsibility. When everyone knows what they are responsible for, they feel empowered and in control, and this always leads to far greater efficiency, happiness and growth within your business.

RED FLAG 3 - POOR FINANCIAL MANAGEMENT

I once heard an incredible entrepreneur say that the one thing you need to focus on as a business owner, is never running out of money. And albeit it a little tongue and cheek, and it seems easy enough to say, it’s essential you have a strong grip on your financials.

It’s essential that you have a clear view of our outgoings and revenue, and that this is set against financial targets.

One of the very first things I did, was to invest in an accounting system dedicated to small start-ups. I know that this is not one of my areas of strength, so it was important that I kept this calm and simplistic, and that I removed any stress. In the early years we used Quickbooks and today we use Xero.

In the early years, my main offerings were service based, and I structured my business so that I received an initial deposit from my clients to secure my service, this paid for my initial time so I could fully focus on their projects and I then always asked for payment before I delivered the final project, so I could pay all my suppliers promptly and I was never in a position of having to chase money. This structure helped me immensely, particularly within the first few years, without having investment to fall back on.

As a small business, ensuring your model is based on a healthy cashflow is so important. I didn’t always get it right though and my goodness I learnt from that. Within a few years from starting up, I agreed to invoice a corporate client for monthly work, after I had supplied my services.

At the time it was a big account for me, and I was focussed on securing it, so I made an exception, but within only a few months I found myself spending more time than I ever imagined chasing late payments. It became so stressful, and it was such a negative focus of my energy. I should have stopped the account much sooner than I did. It was something I learnt from and didn’t repeat again. I know it can be tricky to say no, particularly when it feels like an exciting opportunity, but please always listen to your intuition, it’s almost always right.

I have recently been writing a new guide which covers a number of different business models, specifically those don’t require initial investment and lead to very healthy cashflows. The models work perfectly as small businesses, either as successful side-lines, but brilliantly they can also be scaled to much larger ventures. I can’t wait to share more about this guide with you soon.

And as always, if you have any questions, you can send me a DM on Instagram, I’m @philippacraddock.

red flag 4 - AN INABILITY TO ADAPT

I think this is hugely, hugely important and it goes hand in hand with having a growth mindset and being resourceful. I also love this most about entrepreneurialism, it’s that focus and willing to adapt when you need to. If this is not something that comes naturally to you, then it’s so important that being willing and fully open to adapt becomes something that you actively embrace.

Almost every single one of us, as we are building and growing our businesses, will fail at some point. It is inevitable. We all get things wrong, we all make bad decisions, usually they come from the very best intentions, perhaps something happens unexpectedly or has been overlooked, or perhaps something that we never could have predicted or controlled. The huge difference between those who succeed and those who falter and stall, is almost always down to a willingness to adapt. I love the phrase that describes a method of success, is to fail fast and pivot quickly; it is so so true.

In addition to being willing to adapt and focussing on finding solutions, even if you are incredibly fortunate not to encounter obstacles, the world still moves pretty fast around us - technology and our customers’ needs and desires can change at a fast rate – it’s important we remain aware, openminded and nimble, we have to be willing to adapt.

red Flag 5 - POOR COMMUNICATION

This applies both outwards to customers and internally, within your team. A healthy focus on openness and clear communication is paramount. And it’s important that we communicate at a human level. Avoid complexities and jargon, and ensure every part of your business is transparent, with a high level of trust amongst everyone.

Externally, clear communication is best when it is told in story format, this includes your story behind your brand and the authentic benefits of your products or services.

When you get your communication right, and you combine it with exceptional customer service, you will fly with your brand. This is a topic we cover in detail within the Creative Business Masterclass.

Right now though, one element that you can apply straight away, is ensuring your offerings are explained through the benefits they provide, rather than a description of what they are. For example, in our Workshops, Courses, and Masterclasses, we emphasise specific outcomes and benefits. We discuss how you'll feel after applying each of the frameworks I share and how you can tailor them to make the best of your unique strengths and skills, instead of merely outlining the contents.

Let’s take an example, looking at the brand Huel, one of their opening paragraphs on their website homepage is “You could save five hours a week just by replacing your go-to lunch with Huel. No more meal prep. And no more meal-deal sandwiches or overpriced salads for lunch. Prep a Huel meal in minutes, give your body all the healthy goodness it needs, and get back to your day.”

You instantly know how the product will benefit you, and you can quickly decide if that works for you. They have a very specific target market, and if you reacted in a way that you what to find out more, then chances are you are their exact target market. What’s interesting and hugely effective, in the opening paragraph, there’s no mention of flavours, smart packaging, ingredients etc. the only focus is on the exact benefits, for their target market. It is such clear, effective communication.

Have a look at the way you currently describe your offerings, and without a full overhaul, you can quickly change your focus by thinking from your target customers’ perspective, why your offering will benefit them. Do this as a first step, and if you feel your descriptions need more work, then spend time at a later date working on your copy. But as a quick fix, by simply changing the description of your main products or services, you are making positive changes, that will make an impact.

Think from your customers’ perspective, why will my offering have a positive impact on their lives and explain exactly that. And please remember, we are not looking for perfection here, if this is a new approach, start with one product or your opening website paragraph, and come back to it to tweak and update.

Communication of course also applies to how you communicate internally; effective communication includes listening to everyone carefully and being open to receiving feedback. Keep all your communication simple, never over complicate anything, and always recognise those who have worked hard and achieved great success. As much as we love to share good news, we can equally find it hard to share bad news, it’s always a better tactic to be open and share any areas of concern, alongside solutions, rather than to let gossip or worry overcomplicate things.

We have recently gone through a significant change in direction within our business, that required very, very clear communication, from initial idea to actual execution, covering both communication internally and externally.

I was feeling more and more aligned to helping our target audience with business insights, marketing and strategy, to step away from teaching floristry techniques and project management. It was perceptively a big change, and it was so important that my initial idea was communicated to everyone internally, to hear their thoughts, to gain their commitment and also to be able to share our change openly with our customers. Internally, it was a conversation that started about 18months before we communicated anything externally. Initially was just simply an idea, where it was important to have everyone on board and all of us clear on our new mission and focus. And we then worked out the right timing, so we could support our customers in the very best way possible, and to make a plan to help us communicate clearly.

The external communication came very naturally. We wanted to ensure that everyone had access to our final flower masterclasses, so we shared this openly, to make sure no one missed out, and then we also combined this communication, with the reasoning behind our change in focus. It is a big change, but we weren’t concerned at any point, as we had talked about our change for so long internally, with everyone listened to and fully on board, and we made an external communication plan to share everything with authenticity, and in the simple way possible, so as not to confuse our message.

We received so many incredible replies and our final two flower Masterclasses both sold over 200% of our original financial targets, this was because of the way we communicated the message very clearly. Our customers trust us, and they know that when we say it’s final, then it is, we don’t over sensationalise and always keep our messaging simple, and from the heart.

When you are working on both your internal and external communication, apply these same tactics and you won’t go wrong – be authentic and share your message in the most down to earth way possible, aligning with your brand voice.

We’ve covered so many points today, and some of them I will expand on individually in upcoming episodes, including topics around refining your brand story, identifying your target audience, how to find and appoint people to support you, copywriting, further communication tactics, practical ways to create budgets and targets, and how to write a brilliantly quick and effective strategy for your business within just a couple of hours, plus I will also be sharing some of the details from the guide I mentioned on business models that don’t require initial investment and focus on healthy cashflows. All of this is to follow, and I am excited to support and help you more.

We’ve covered the five most important red flags that as business owners we should be aware of - from the importance of a crystal-clear business strategy to the necessity of remaining adaptable, we also covered the importance of clearly defined roles, keeping on top of our financials, and how it’s essential to communicate clearly, both internally and externally. These are not just mere tactics, they are foundational principles that can determine the very essence of your business's culture, it’s success and longevity.

As I finish this episode, it's always worth reiterating that whilst running a business, challenges are inevitable, the rewards are immense, from giving you the freedom to manage your own life, being able to focus on projects and roles that are aligned with your natural skills and strengths, to being able to fully support those around you. By being fully aware of these five red flags and by taking proactive steps, you're not just avoiding potential pitfalls, you are actively paving the way for growth, innovation, and your success.

Business is as much about learning from our mistakes as it is about celebrating our achievements. Embrace every moment, for it's in these experiences, our learnings, and our growth that the true essence of entrepreneurship lies.

I can’t wait to share more in-depth insights within upcoming episodes, and let's work on our growth together, I am very much here to support you, you can contact me directly on Instagram @philippacraddock
Thank you for joining me, and I’m very much here, supporting you and cheering you on!

Warmest,
Philippa x