Golden opportunities sometimes present themselves when you least expect them – a bold business idea that comes to you over a coffee with a client, a surprise endorsement for your business from a celebrity on social media. But for many entrepreneurs, a breakthrough moment will occur as a result of making consistently good decisions or taking on board some valuable business advice. So assuming you don’t have a Mark Zuckerberg-style light bulb moment, how can you find ways of creating opportunities, rather than just seizing them?
According to Jane Robinson, the director and co-founder of Cutting Technologies, it is important to remember that limited cash does not necessarily mean limited potential. Robinson helped create the laser cutting and engraving business in 2003, along with two other directors.
After two years, the business was making a heavy loss while she was regularly working 13-hour days to keep the business afloat. “We had two employees but the directors were doing so much of the work - running the machines and doing accounts, invoicing, banking and even simple admin tasks,” she says. “We had already made huge capital investments on the machinery, so were reluctant to pay someone to do the admin, when we could do it ourselves.”
It was during one “particularly dark and despondent evening” when the three directors were assessing the business’s finances for the coming year that they realised something had to change. Robinson made the difficult decision to hire more staff. “We managed to get an overdraft and employed two shop floor operators – thank God we did,” she says. With extra staff, she was finally able to do what she had always wanted – manage her business.
Robinson had time to nurture potential customers, negotiate bigger deals and create new ideas. She says: “You can’t drive a business forward while you are operating a machine. Speed and flexibility is everything and we were finally able to respond to people quickly and positively - finding different ways of achieving what the customer wanted. We took lower-margin work, which would generate cash quickly. We could then take our foot off the gas and set up constructive meetings for larger contracts.
“By doing that, we built some very good, loyal clients who are still with us now.” The company now makes a healthy profit, has a turnover of £3m, and employs 32 staff. The moral of the story, says Robinson, is to “be bold” and perform tasks that “only you can do”. Concentrate on the tasks where you can add most value and delegate or employ people to do the rest, she says. It’s crucial to give yourself the space to create that breakthrough moment.
Terence Woodgate agrees that boldness and “thinking outside the box” is vital for smaller firms. His self-titled light-fitting designer business was struggling to reach its potential because of problems with cashflow. He explained: “The more we grew, the worse our cash flow became. There was a delay between the orders – us buying the components, receiving the components, putting it all together and packaging it. Then there is a delay in the payment - generally 60 days, but sometimes worse.”
The frustration for Woodgate was that he was failing to capitalise on the interest his designs were receiving from big retailers such as Heal’s and SCP. He knew that more product collections were needed to keep their attention and that funding the components and plugging the cashflow hole would be tricky without investment. Then someone mentioned equity crowdfunding – the practice of people investing in an unlisted company in exchange for shares.
It can be used to fund a venture by raising small amounts of money from a large number of people. Woodgate explains: “I was very nervous, but the idea that literally anyone could buy into our ideas seemed incredibly democratic, inclusive and exciting to me. People invest while discussing and enthusing about our ideas.” The decision turned out to be pivotal for the business.
More than 140 investors helped Woodgate raise more than £150,000 in less than two months for a combined 17% of the business. With the cash secured, Woodgate has started working on his new product ranges and will employ a salesperson to exploit interest from clients as far afield as Singapore, Australia and Los Angeles. He said: “We can now capitalise rather than letting the market disappear. In the next two weeks we will have a new Bluetooth lamp, meaning you can talk to your light through your phone or your iPad.
“We can show products to a greater number of people and can have a salesperson to target all the interior designers. We have put all the sweat into the company. Now there is nothing from stopping us becoming really successful.”
Of course, there are other ways to encourage business growth. Rik Hellewell had success with his ‘man with a van’ oven cleaning enterprise, Ovenu, but he didn’t want the stress of recruiting people to grow his business outside the local area. Instead, after three years, he collated all of the data to market his business as a franchise. He explains: “I didn’t want the inherent problems of 100 sub-contractors working for me who may not show up to the right customer at the right time. Therefore, it was a good idea to get a business model, which is 100% ‘replicable’.”
Hellewell collated information on how often people needed their ovens cleaned, what price they were prepared to pay compared to the competition and which marketing and advertising campaigns were successful. The business model has now been replicated all over the world with 100 in the UK and others in New Zealand, Australia and the US. Whether it’s identifying the need to hire more staff, only carrying out tasks where you can add value, or expanding into a new overseas market, it is crucial to regularly assess where your business is now and where you want it to be.
“Business owners and entrepreneurs are always thinking about the upside. But it’s also important for them to reflect on any issues they may have faced and have big ambitions in the long-term,” says Marcelino Castrillo, managing director of Santander’s SME business in the UK. He says companies should carry out research to find out where there is a gap in the market.
The most common breakthrough moments are those where a company can identify an untapped demand in an existing market and are able to build a business model around it, says Castrillo. “‘Breakthrough moments’ sounds like a sort of eureka-type moment, and actually they are rarely like that,” he says. “Breakthrough moments are a result of a business putting the right “dots” in place and linking them up. It’s a combination of preparation and seizing opportunity.”
For more tips on how to create your breakthrough moment, visit Santander.
Content on this page is paid for and provided by Santander, sponsor of the Guardian Small Business Network breakthrough moments hub
