Ten learnings in creating and running a successful business
In 2015, I sold the executive search business that I had built from scratch. Although it was a successful outcome, it wasn’t always smooth sailing.I’d ended up in Amsterdam on a short project with TMP / Hudson (the company who bought Morgan & Banks) and saw a gap in the market – no one was managing the recruitment of senior marketing roles for international organisations. In February 2002, with a small office in a serviced space, and with a photo of the whole building on my website, I set up shop.
At first, business was very slow –the country was in a recession yet business folk were still enjoying up to eight weeks paid holidays. By September, however, I’d secured my first client – the European headquarters of the toy company, Mattel, who needed high performing international consumer marketers. We went on to sign Philips, Akzo Nobel, TomTom, Heineken and Edelman to name a few and grew the team to twenty.
On reflection, here are my top ten learnings:
- Have a business proposition that stands out. From the start, O’Connell offered something that no other search or recruitment firm provided in continental Europe: a specific focus in international marketing and corporate communications. Being an Australian with an Irish last name living in the Netherlands gave authenticity of being global. Having the passion for marketing provided the drive. Leveraging previous recruitment experience delivered the expertise. The international and European headquarters of companies chose to use O’Connell because we offered something different and we “got it”.
- Define your P&L for your business. In the early days of O’Connell, I struggled with making sense of the P&L; it was in Dutch, and my accountants structured it for purposes of reporting for the tax office; not for running a business. When Exact Software finally developed an English edition, our profitability was significantly enhanced. I regrouped various costs into what made sense to O’Connell as a business, improved our budgeting and measured on a monthly basis. It is a critical tool in building a successful business.
- Not every idea is a good idea. I’ve tried loads of new ideas at O’Connell – opening up new markets in Switzerland and Belgium; expanding into Corporate Communications; moving from contingent to retained fee structure; growing the team ahead of anticipated business demand; developing a CV writing service; transitioning from recruitment to executive search; developing an intern program; increasing our search fee and developing a talent sourcing model. Some of them worked, and some didn’t. Sometimes I misread the market or didn’t anticipate a downturn. Other times, the timing was just right. What I learned is to have a plan for each idea with specific timelines and to adhere to those “walk away” milestones.
- Know that it never stays perfect. My last manager at Morgan & Banks said that running a business is a bit like gardening. It takes planning, watering and sunshine for things to grow. For a while, everything is blooming, but then you need to deadhead the daisies and remove the weeds and prune the shrubs. The seasons move on; we have droughts or flooding rain. Over the period of growing my business, I managed this full cycle numerous times. And when the company was sold, it was in full bloom.
- A problem shared is a problem halved. The first dip in last double-dip recession in 2010 nearly closed us down. We had enough work; however, clients were significantly slowing down their payments by losing invoices, not issuing PO numbers and extending payment dates to 90 days. Cash flow was at crisis point. I’d not paid myself for six months, and I was now at a stage threatening the payment of staff salaries. The bank wouldn’t give me an overdraft, and I had no private reserves left. I was forced to share this issue with all the staff. It was the best thing I could have done. The staff felt empowered with ideas of generating income, flexible working and debt collecting. Their concerted effort brought the team closer, increased cash flow, and we never missed a payday.
- Manage emotional RoI. What do you do with highly able staff who also can drain those around them with some extraordinary character flaws? It’s a typical scenario with high achievers and is akin to managing risk – calculating return on the investment (of time, energy and business impact). I certainly haven’t perfected this, but have found that defining the value of the investment of my time and energy puts perspective on what the RoI is and helps identify what action to take.
- Celebrate employee growth. As a smaller business owner, a knife goes through my heart when one of my staff resigns to move to another company. I’ve found strength in knowing that I’ve had some part in their career journey, after all, we’re in the business of people growing their career by moving companies.
- Share the P&L: A few years ago, I’d read a case study whereby a growing digital company shared its full P&L with its management team; not a common practice for a smaller business. I tried it, and it worked exceptionally well. Each month, we reviewed all costs and earnings and addressed any issues. It gave the management team a stronger perspective on the level of investment into the business required to facilitate sales and tempered requests for further investment without specific financial outcomes.
- Make a decision, even if it’s a wrong one. Indecision is awful for employees. Issues should be resolved quickly so that they don’t fester. One example was when two consultants both wanted to manage the Philips account. Both were highly capable of doing so, but I only needed one. I took too much time to work out how we could keep everyone happy, which lost some momentum with the client and cost me a consultant.
- Plan. Take a month to plan your year, a week to plan your month and an hour to plan your day. I always liked the idea of this maxim, but I never had the luxury of such time. Planning and communicating our yearly objectives plotted the course for the team, preparing and assessing our weeks helped maximise our productivity. Our days were a mix of appointments and telephone calls. In reality, our maxim was a day to plan your year, an hour to plan your week and a minute to plan your day.
It’s a privilege to have the opportunity to grow a business and perhaps even luck to be able to sell it. Ensuring that all consultants had full responsibility to develop their portfolio made the company more significant than just me alone. I sold O’Connell as I wanted to return to Australia and running it remotely just wasn’t an option. I’m delighted to now be back in Sydney and look forward to working with other business owners of recruitment firms in future-proofing their business.