The Next 5 Things You Need to Know When Starting Your Own Business
In the first part of this series of articles ”10 things to know when starting your own business” we proposed practical ideas for how to deal with the typical problems that arise during the first stage of starting your business. These are based on the experiences of Ewa Zmysłowska, who together with her husband, Paweł Zmysłowski, has been running White Label Coders for over 13 years. Here, the story continues.
In this part of the article you’ll be able to see our next 5 tips, Ewa's lecture for students at ASBiRO University (video) and delve into our list of preferred readings.
1.When you employ a staff, your pricing needs to reflect the added costs of your payroll
When a company has employees, not every project is profitable. When you work alone - you pay yourself. If you have a team, the company pays for their work and time, too. When our company took the next step, we were then limited to projects which could pay an amount for our services that adequately covered our costs.
With hiring an employee, you take on new costs for your company (e.g. employment contracts, furniture, daily amenities, etc.). Foremost, you must regularly pay certain financial obligations arising from employment.
Your team of specialists (developers) requires you to invest in their development and knowledge building, as well as, the fact that the projects you take on align with your employees while also being both ambitious and interesting. Each of these specialists wants to show off their experience and build their project portfolio. Keep an eye out for innovative and challenging projects.
These types of projects, when implemented, can be a real competitive advantage for you on the market. Employee turnover is high in the IT industry, which is why a strong project portfolio can be a good element to use for building employee loyalty.
How do you efficiently develop your client portfolio in a way that will benefit your company?
When to take the next step is a decision that every owner needs to fully consider, this is not a time for spontaneity.
When our team was about nine employees strong, we decided to enter the US market. We told the team about it, and initially, were a little scared. It’s more difficult to compete and implement projects in a foreign market, but the demand for our services was huge.
The competition of European software companies on the US market was not strong at that time. Thanks to this decision, our cash flow increased, as did correspondingly our profits.
Additionally, we gained the unexpected benefit of working in different time zones. Having a team in one time zone and our clients’ teams working in another, we were able to complete projects faster. After working hours in Poland, our client from Seattle could test the current version of the project, consult with their team or the end client, and send us feedback so we could continue development the following morning. Therefore, projects were getting 24-hour development.
By delving into the international market, companies can carry out larger and more complex projects, which bring in more revenue. And in fact, it’s these projects that attract highly-skilled specialists to join your team.
Working with an International clientele also requires investing in English language services. A higher level of language competence equates to higher quality customer service. The team at White Label Coders has benefited from regular English language training with a native speaker for the last six years. Interaction is individually tailored to the needs of each employee, building up competences critical to our business.
2.What’s the best way to manage your company's income?
We’ve really considered what it takes to develop our company’s revenue and how to handle surplus from a windfall. In the past, we wanted to make smart decisions with it, but we weren’t quite sure the best way to approach investing it. This is why Paweł and I enrolled in a Basic Course offered by ASBiRO. It wasn’t easy, our child was six months old at the time and it was very difficult for us to leave her for weekend trainings, traveling all the way to Warsaw. In the end, however, it was worth it - at the course we met Sławek Muturi, who lectured on investing in real estate. At first, I thought, "Why am I sitting here in a lecture on a topic completely unrelated to my business, with my child sitting with my mother-in-law." Fortunately, the topic was not only relevant, it hit the jackpot and really paid off in the long run. At the exact moment the company was looking to secure its reserves, lucrative opportunities appeared on the local real estate market.
We liked the idea of a mixed-use residential building. A good location, a straight-forward community association, opportunities for further investment in estate liquidation sales, all of these played into the decision to invest in a particular piece of real estate. We bought the apartments and invested in their short-term rental. It has now become a separate business, carrying a high rating on Booking.com: Comfortable Rooms in Gliwice.
The investment location also comes with the benefit of being located next to the White Label Coders office. Of particular importance to having your own office means you have the freedom to adapt the interior to your business’s changing needs.
Ideas for investing that we drew on from the course are one thing, however, the network which has brought in contracts is another. We educated ourselves while building up our network of contacts abroad.
An energized approach by the ownership and an openness towards forging new relationships is an investment itself.
In summary : financial investments are not the only area of investing to pay attention to when developing your business. In addition to investing in real estate, it’s worth considering:
❏ Experience - any knowledge you collect from other entrepreneurs will affect your decision making in the future, allowing you to make better business decisions and fewer mistakes.
❏ Reputation - Your presence and it’s recognition by your business community is an opportunity to promote your business. It’s your reputation that will attract new customers.
❏ Networking - today’s acquaintance is tomorrow’s client. The course participants you connect with are an extension of your network, as are their friends, which in the future may become clients.
It's worth the effort to maintain these relationships over the long run by supporting each other's businesses.
3.Are you bored at work? Take on inspiring projects and go after foreign markets
Paweł Zmysłowski was a member of the Business Network International organization from 2009 to 2015. I founded a networking community in Gliwice, which is still active today. Thanks to our membership in BNI, White Label Coders had access to an internal system which made it possible to reach out to a pool of foreign contacts and their network of potential clients. For White Label Coders, a good customer is an active agency that has a strong customer base, presents White Label Coders with product specifications, and programming projects. The agencies do the consulting, White Label Coders does the development. We were able to reach out to such agencies in BNI, but this was just the first step on the road to success.
How do you establish a strong relationship with agencies in your market?
➢ Join international networking groups (e.g. BNI connect)
Utilize the contacts you can gather where they are based.
➢ Be a team player and adapt how you communicate to the culture of the group - BNI participants are focused on communication, knowledge sharing, and exchanging experiences.
➢ Do not write directly about business - Suggest that prospective clients, for example, complete a survey (65% of customers respond to requests for advice). This kind of approach gets you detailed information on what type of offer to extend to your prospective client. Treat your customers as experts in understanding what they need.
➢ Ask for recommendations - If a partnership ends, ask for a recommendation. How a partner sees your company in the time they were in touch with you gives them time to formulate an opinion, and that has value.
➢ Execute test projects - This a good way to open the door to an ongoing business partnership. Test projects can be a form of marketing, and satisfied customers will stick with you.
The ideas above were crucial for Ewa and Paweł’s business when they planned on expanding into new markets.
We already know how to effectively set ourselves up for a 6-day trip to the United Arab Emirates. During the week we had 30 meetings, i.e. 5 meetings a day (!). We see a ton of potential in that market, which is why we put ourselves in the position to really benefit from that market. Our team is developing, so we need to bring in solid contracts. The development of our really requires following a complete, not just taking on projects.
4.Business development and enjoying what you do
The moment came when we were still pushing for new contracts, recruiting specialists, dealing with the day-to-day while simultaneously expanding our knowledge-base, but we noticed that they were no longer moving forward. It’s at this kind of moment that the rush of everyday life, the inability to unwind and decompress, the lack of time for family and personal development really made us question if it’s all really worth it.
Running a business is demanding. The responsibility of its progressive development, financial obligations, team development, and day-to-day management require your commitment which entails a daily focus that cannot be neglected. In the end, however, it's important to balance your work, your relationships, your health and your interests.
Focusing on work and the development of your company, including financial and employee related responsibilities, does not leave much time to rest or explore a world outside your business. Throwing any of this out of balance is a recipe for failure in the long run. If you’re not happy with what you are doing, then there may be a “bug” in your approach. If you don’t find a work/life balance, you can expect your health or your relationships to pay for it.
5.Sales… sales above everything
Today, I’m is focused on the sales process. Brian Tracy, when asked,”What is the key element that leads to sales?”, freely answered "I sell everything!"
What did Brian mean by “everything”?
How are you dressed?
Do you arrive on time for meetings? Do you respect others’ time?
What are you saying?
Are you ready for meetings?
How do you talk to clients?
Do you leave room for discussions?
Are you able to address your customer’s issues?
How we do it at White Label Coders
Today, we are building a portfolio of partners of White Label Coders. Together, we enter foreign markets, take on ambitious projects, and coordinate the workflow of development teams, project managers, copywriters and number of other specialists.
Today, we know that effectively pursing a sale is a series of activities that begins with correctly defining your customer’s needs and ends with the ideal IT system for them, which can be measured through the profits of your customer.
When establishing a sales process, it's worth starting with building the skills and awareness of your team.
Based on our experience from a variety of foreign markets, today, we can say which sales strategies most effectively and efficiently result in new clients.
➔ Be a partner for your employee - sales team. It’s the salesperson who is the point of contact for the customer. It’s them who will be exposed to the stress of negotiations and subsequent customer relationships. They need support. As they will receive feedback regarding quality of work, which is a key aspect of your business relationship:
➔ Always practice conversations with clients beforehand, perfecting the negotiation skills of both yourself and you sales team.
➔ Practice, practice, practice. Confronting your weaknesses is the worst during a business meeting.
➔ Don't delegate sales responsibilities to your employees too soon - it’s a role someone needs a bit of time to grow into. You’re the entrepreneur, not your sales team, who are more likely to focus on contracts, not on business development. Therefore, it’s worth putting yourself in this role as well, not just acting as the business’s owner. If you don’t handle customers yourself, you won’t really understand who they are, leaving your sales team to focus on their own needs and not on your customers’ needs. The better you understand your sales, the better the offer you’ll put on the market.
Ewa Zmysłowska's lecture can be heard in Polish - click here (only a polish version)
Timothy Ferriss - " Tools of Titans"
Michael Gerber - "The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It”