Episode Summary
Running your own business as an entrepreneur obviously comes with risks. If you are trying to scale and grow your business, even more risk is involved.
Has your growth begun to plateau? It’s time for a shift! Change how you think about business and start working on the growth strategies outlined in this interview.
On this episode of the Entrepreneurs Survival Guide, we are joined by Gary Lumby MBE as he shares tactics entrepreneurs can use to accelerate growth.
What We Talked About:
– Discover the importance of stepping back and reevaluating your business strategy.
– Gain insight into techniques entrepreneurs can use to scale your business.
– Learn why niching down isn’t always a good option.
– Resources needed to scale your business
– Driving growth through investment
– The importance of innovating as a business owner
– Shifting your focus toward workforce inclusion and why higher salaries aren’t the only options for rewards
– Ways you can continue to learn and grow as an entrepreneur
We covered a lot in this great interview. Don’t miss it!
About Our Guest – Gary Lumby, MBE, FCIOBS
Gary Lumby, MBE, FCIOBS is a business mentor that provides support for small to medium sized businesses across the UK. With over 3 decades of experience in banking and business, Gary works with businesses to help them achieve growth.
Find out more about Gary Lumby:
https://www.linkedin.com/in/garylumby/
https://www.focus-on-success.co.uk/
Transcript
– Hi, Gary, welcome to the “Entrepreneurs Survival Guide” It’s great to have you with us.
– Hi, Martin, it’s my first time, so I’m looking forward to it.
– Before we learn a little bit more about you, Gary, tell us a little bit about some top tips that you might have for business owners and entrepreneurs from the experience you bring to the party.
– I think first of all, Martin, there is no silver bullet, as we know. It’s about working extremely hard in your business, as well as on your business, and actually making sure that you’re looking to grow your business, and you’re looking at it from a very structured way. It’s difficult to grow a business without doing certain things I’ve found and those are, investing in resources. Now, resources could be people, it could be physical assets, it certainly could be technology, and it certainly would be sales and marketing, and obviously, all that takes a fifth resource, which is finances. So ultimately, if you start by looking at your resources currently in your business under each of those headings, and then try and work out what you need to invest in to actually grow your business from those five areas of resources, that start demystifies it a bit. I’ve not come across many businesses that can actually grow without investing in those sort of resources. So, it does take a bit of planning, it does take a bit of, usually, financing whether that could be cash reserves, it could be borrowed money, it could be investment, but unfortunately, it does take a bit of finance. Lot of people tail that and grow up and scale up and yes, you can use your existing assets and your existing resources to a level, but ultimately, you’ll reach a point where you do need to invest.
– Right, okay. So, you can get up to a certain level in business, and then if you want to go above and beyond and scale up, there needs to be some kind of investment there, usually financial, is what we’re saying.
– It’s usually financial, but that will leverage those other resources, whether it’s in sales and marketing, physical assets, technology or people. And the usual growth curve is a business kicks off, it starts off, it sees some growth, it might accelerate, but it will hit a wall, and it’s a question of whether you’ve got a plan and whether you’ve got the determination and the risk-taking attitude to get over that wall and move onto the next level. All the businesses I see are stuck getting over that wall and the turnover plateaus because the owners or the directors are not prepared to take risks investing in their business in those areas I’ve talked about to actually scale their business further and at an accelerated rate.
– Okay, so there’s a bit about getting into an accelerated rate, and like you say, being willing to take a bit of a risk as well, and not being too risk averse.
– Yes. Entrepreneurship is all about taking risk, isn’t it? We want people to take risks, well-balanced risks and thought through risks, not hare-brained risks. I suppose part of a business coach’s job or a non-executive director, in which I am in a lot of businesses, is there a challenge the owners and directors to say, “Look, listen, are you making the right decisions? “Are you taking the right risks? “Are you taking them too slowly “or indeed too quickly? and therefore, “Are you moving your business onto the next level?”
– Okay, fab, so it’s not just about going and putting all my chips on red and hoping for the best, there’s a little bit more to it than that.
– No. That’s called gambling or hope. I quite often deliver some seminars called “Hope Is Not a Growth Strategy” because again, I quite often see a lot of businesses owners that hope their business will continue to grow if they are seeing some growth, while actually they haven’t got a plan around that hope and it really is a gamble.
– Okay, yeah. So, there’s a big difference between two. So, that’s really fascinating stuff, Gary. So, tell us a little bit about how did you get to the point where you are today? What’s the backstories for you to have such amazing knowledge to enable entrepreneurs to grow?
– I think you’re being very kind to me ’cause I wouldn’t profess to have amazing knowledge, but, I suppose at my advanced years, I’ve learned a few things along the way, picked up a few scars both from my career in banking which I would like to think I was what is called an entrepreneurial banker. So, I looked to work alongside my customers in a proactive way. I think now looking back to those days, potentially long gone in terms of the current set of banks we’re working with. But, I was banker, I was 22 years with Barclays, and then that was straight into their management development programme after my A levels. And 23 years ended, was regional director in business banking in the northeast in Cumbria and then got head to National Australia Bank which owned Clydes in Yorkshire by that time, and actually around the Yorkshire business bank across the UK between 2000 and 2006 and then around the retail of the bank and small business between 2006 and 2011. So, I suppose what I was was, I was a relationship banker turned executive banker, if you like. As you know, you move further up the food chain you get further away from the customer, but ultimately, I still love dealing with customers and along that journey, my wife and I bought our first business in 2009. And in 2012, we were about to launch two new businesses. I was away from home quite a bit on worldwide travels with National Australia Bank running the Yorkshire bank then, and I said, “Look, I’m 37 years in the banking, “I think that’s long enough. “I think I’ve got enough rooms “and been through the global financial crisis.” And I was lucky to pick up an MBA along the way in 2009 from Ukraine in terms of the recognition to my services to financial services. And I think I’ve done my stint, shall we say, so I left banking 2012 intending to work in the businesses that we were starting that year, which was a mixed-use property company, and we’d bought a commercial paint and decorating business in 2009, which was growing quite quickly, and we were launching a couple of retail outlets in that year as well. But, I was very fortunate that when people heard I was leaving the bank that they rang my phone instead of, “We’re here and would you like to come “and work for us?” I said, “Well, I’m not looking to get back “in full-time employment. “I’d rather have a portfolio of businesses I advise,” and that’s how Focus on Success started back in 2012, and here we are nearly eight years later. I now work with 24 businesses across the UK. 16 in the northeast, six in Yorkshire and two in London and a number of others that are in the pipeline where I advise them on how to grow their business in a measured way, but in accelerated way, and I give that independent external viewpoint hopefully bringing in some skills and knowledge to the party as well to help them succeed in business, and the challenge for me is making sure that they exceed more quickly or to a higher level with my support and without my support. Otherwise it’s pointless me being there.
– Right. Okay. So, 24 different clients you work with and from three of your own businesses as well, and that all started to be settled just after the financial crash from what you were saying there.
– It did, and I was very fortunate that when I… 2007, 2008 to 2011 when the global financial crisis was on and I was actually running retail banking and small business bank for Yorkshire bank, and actually, we had a very, very solid time through that crisis. We’re a good mortgage book, a healthy deposit book, yes, we got into slight problems like most banks did with personal loans and personal protection insurance. Other than that, the FCA were pretty happy with our performance, hence my MBA, and and ultimately, I was proud of the way, if you like, the bank managed itself during that period of time. I put a lot of work outside of the bank during the latter years in my career. I was doing a lot of voluntary work, so, I was president in the Chamber of Commerce, I was on the local lead price partnership board, I was chairing the venture capitalists funds, but not exactly direct your business link. So, I was doing a lot of things which I did because a, it helped the bank, while, b, it helped make my personal brand. And I think it also helped me fill my comeback book up. So when I announced I was leaving, as I said, a lot of people knew me, a lot of people knew my capabilities, and hopefully, I’ve built the reputation over 37 years and I was very, very fortunate that my first six clients in that first three or four months were really reactive clients. They were ringing me rather than me ringing them and ultimately, I think five of those six are still clients of me today, seven and a half years later.
– That’s amazing.
– So, of course, I must be doing something right as we go on.
– That must achieve a marvellous lifetime value for a client within that.
– As I said, the litmus test is this, obviously I commit a cost, I think it’s a reasonable cost to my clients and I only deal with SMEs. That’s my passion. SMEs Small Medium Enterprises. My clients range from startups to 50,000,000, well, 45,000,000 turnover is my largest client, and everything in between. I’m sector agnostic, so, I’ve got everything from domiciliary care to IT to manufacturing, fabrications, professional services, you name it. I’ve got pretty much a client in most sectors, and I don’t duplicate sectors because that would be a conflict of interest. But I do think principles of good business accounts variable across sectors. So, when people look at diversification of their businesses, we don’t necessarily need to keep in the same sectors of the realm because if they’ve got good skill sets, that’s transferable.
– That’s really interesting, because I think that you mentioned about diversification working across different sectors, because there’s an awful lot at the present moment on social media channels. A lot of the gurus talk about niching and you have to find a niche, and operate in blue oceans as opposed to red oceans where everybody’s fighting over. So, I’d love to hear a little bit more about your thoughts on that.
– Well, I think finding a niche is very difficult, and again, when I’m delivering seminars on “Hope is not a real strategy” I do ask the audience this very question, “How many think they have a unique “or a niche business?” and quite often, not many of them put their hands up. That may because they’re nervous or because they don’t think they’ve got a niche or a unique business, but those who do put their hand up, when quizzed, when challenged by myself, in reality, they haven’t got a unique business, they’ve got a variation of a service or a product that is already out there. Sorry, one lady put their hand up and I said, “Well, what’s your business?” I didn’t know her. “What’s your business?” She said, “I make sausages.” And I said, “Well, how’s that unique or niche?” She said, “Oh, nobody makes sausages like me.” And that’s sometimes people’s mindsets, but, she’s gotta understand that she’s competing not only against every other sausage maker out there, even though they may not make them exactly the same way, but she’s also competing against all the food producers who produce all the meat products, whether it be bacon or whatever or corn. So ultimately, you’ve got to accept sometimes that you haven’t got a niche or unique product, you are competing against competitors and you’ve gotta deliver a value proposition which clearly differentiates you on a number of at a number of levels whether it’s price, whether it’s calling your service, whether it’s speed of service, whether it’s geography, whether it’s the way you deliver through different channels that differentiates you from your competition because even if you are unique, and you’ve produced or you’ve manufactured or you’ve delivered a service which nobody else is doing, somebody’s gonna copy you very quickly ’cause that’s the way the world is. The world is littered with examples of people who brought great products out, but then were quickly overtaken by the Apples or the of the Microsoft’s of this world because they didn’t keep innovating, and that’s another big tip that I try and state to all my clients. Spend time innovating in your business because, too many business owners fill their diaries with firefighting and operational issues and dealing with HR and looking at… Quite rightly, you’re looking at client issues, but not enough time, as you call it blue sky thinking or blue ocean thinking in terms of how to innovate in their business and I recommend every business owner crosses half the diary and takes no phone calls and sits in a room and thinks about how the work on my businesses have developed my products and services, and take them onto the next level. I diversify them because, if you’re not doing that, sooner or later you’re gonna come to a standstill.
– Yeah, absolutely. So, diversification is one of the keys to business success in a modern marketplace, as opposed to focusing on trying to find something extremely unique, a unique niche that probably doesn’t even exist anyway because, like you say, “How you qualify competitors “can be very interesting.” Naturally, that lady might have just thought, “All the sausage makers are my competitors,” but actually, if I’m hungry and I want something for tea, any food provider is a competitor, right? So, I already take–
– It is. Listen, I’m not an expert and I generally prefer the people who run much larger businesses to me and even startups. I know how difficult it is to get startups off the ground and make them successful. We all know how many failed in the first two to three years, but generally, I would really say that innovation, diversification work on your business, and taking that time out from the day to day activities is really time well spent. A lot of business owners feel uncomfortable about this. They feel uncomfortable about taking half a day out the diary and crossing it out and not taking appointments and not making phone calls because they think they are not working, but actually, they are working. They’re taking time to work on their business rather than in their business. It’s an old saying, but it’s still relevant today.
– Yeah, I don’t think old cliches like that are any less valuable today than they were when they first came out, and I think we should, rather than trying to keep inventing new phrases and catch phrases and such like, things like that are absolutely perfect to continue developing our businesses. Working on it and in it is perfect.
– And also, Martin, develop yourself because… I’m a big believer in continuous progressional development of any stage in your life and certainly being at the ripe old age of 60 or 61, rather, I’m still determined to learn something, hopefully, every day whether that’s through reading the media, whether it’s reading business books, whether it’s listening to videos or webinars like this, I’m a big believer in continuous professional development and learning about how they’re running their businesses and picking your best practises and then sharing that across my client base. The beauty of having 24 clients, and people say, “How do you manage that many?” and actually, the more you have, the seemingly easier it becomes and picking your best practises best practises of each of them, you’re sharing success stories, you’re putting clients together for either supplier or vendor relationships, and actually, I was doing a seminar the other day with quite a few of my clients in the room and one of them said, “We love being in team Gary.” best practises of each of them, and ultimately, I do feel like that. I do feel it’s a bit of a team of businesses that are in my team, and I wanna make sure every single one of them succeeds. And they all know each other, they all talk to each other, some more than others, and some are clients of each other, but, my job is really to make sure that they all benefit from how well each of them are doing, and where possible, share innovation, share ideas, share best practises, and share success stories because sometimes, we forget to do better as well.
– Yeah. I don’t know whether it’s a British thing or not, but boasting about your successes… I’ve just used the word boast, for example, share innovation, share ideas, share best practises, without trying to show off how big you are or such, but just to inspire and motivate other people. There’s a different intention behind sharing that success, so I think what people normally think of.
– I was in a boardroom this morning actually to a client in London. I was doing it by Skype, so ultimately, we had a Skype board meeting. It was their financial year ending in September, we were looking at the financial accounts this September year end, and I was saying to them, “Look, you’ve got a good year, “profitability is up, margins are up, “you’ve got some new customers, “you’ve got some new products so it’s really well,” and here we are, 2/3 midst from October having taken time to share the success with your workforce and actually communicate with them and pat them on the back and maybe set them out for a beer or buy them something just to say, “Well done for last year,” rather than just hurtling on into the new year, and then forgetting all about the good stuff that’s gone last year.
– Yeah, so recognising the positives because… I bet if it was the opposite way around, the workforce would know about it very swiftly.
– very swiftly and and we all know these days that… I would generally say that the biggest issue facing all my businesses, generally, would be people. And that is retention of good people, it’s recruitment of good people, it’s engagement of the workforce, getting employees engaged and we all know an engaged workforce is far more productive than an unengaged workforce, and recognising them and thinking about reward and recognition. So, those areas are absolutely critical ’cause we have got pretty much full employment in this company, and therefore, when you try to recruit, you’re either recruiting from pretty small pool. You’re either recruiting from colleges or universities or you’re recruiting from somebody who’s employed by somebody else, and you’ve got to have a pretty employee proposition to be able to recruit that top talent because what you gonna do is try and lift your benchmark all the time. Lift your people benchmark. It’s no good recruiting because you’re desperate to recruit and you’re just gonna make do. That’s not the solution, and that often ends in pain and tragedy. You find a better way to continue to search for the right person that’s gonna lift your people benchmark and make people strive to attain more than recruiting somebody who will just make do. But trying to retain people, recruit people, reward people, engage people is a real challenge for people at the moment across lots of industries. But particularly, I would say construction, now particularly IT because there’s such a shortage of skills out there.
– Yeah, and it’s interesting you mentioned reward and recognition. It’s something that I see with some of the clients I work with actually, that reward and recognition seems to have been switched off a little bit while they’re focusing on trying to drive up sales and retain clients et cetra, forgetting about the people in the business.
– Well, listen. Obviously the most valuable asset in any business, I don’t care what it is, whether it’s technology business or not, is actually the people ’cause you need people generally to run your business and you need good people, and you don’t need average people you need good people. But you have to also realise that generally speaking, if people aren’t brilliant, that doesn’t matter, because you need good people to be the backbone in your business. And I remember when I was in the bank, I had quite a few thousand people work for me and majority of those were just very happy doing their jobs and doing a good job and they were the backbone of banking, and it was 10% or 15% of the top who wanted career progression, who wanted to move on and make better of themselves and you’ve gotta obviously try and find opportunities for them, and then, there were some that underperformed and you know what? They stuck to the fact that either you have to courage to improve them, Which was ideally what you want it to do, but ultimately, if you aren’t able to do that, you have to let them go. And so, reward and recognition, particularly of top talent, but also of the backbone of your business, don’t forget the average performer is doing a great job and actually doesn’t want promotion, then that’s great because probably, you can’t find promotion for everybody, nobody can, and therefore, just don’t forget that backbone of your business in terms of your employees who are doing a great job. Remember to reward and recognise them, as well as the top performers. But yeah, recruiting people, and particularly sales people… You mentioned sales and I’ve got a few clients who’ve been trying to recruit business development managers in different sectors and I’ve been doing some interviews or some of the second interviews and naturally, again, it’s part of the service I offer, and it’s been interesting about the quality of people that have been coming through. But in all cases, they’ve been working for somebody else. You’ve gotta have a strong proposition to actually make them come on board because they might be looking around, but that isn’t to say they wanna leave where they are. They may well be just testing the water, they maybe want to go back to existing employer and use that as a bit of a leverage to a better deal from. So, you’ve gotta be very clear about what your value proposition is to your employers and why talent should come and work for you. Hopefully, it’s because you’re a great business, you’ve got a great reward and recognition strategy, you engage your workforce, you communicate with them, and that’s a big thing. You’ve gotta communicate with them on a regular basis, tell them what’s happening, tell them the good things, also don’t hide the bad things as well. So ultimately, communication’s a big thing. The bigger the business, the more difficult the coverage. We know that multiple locations, multiple hierarchies, multiple companies even. It makes it more challenging, but you still gotta work it. It’s more harder? You better work at it harder, but you can’t ignore it. And, where communication lack, where there’s a void, people will fill that void with miscommunication. So you gotta do it, you gotta keep working at it.
– You either control the conversation or just let the whispers happen and… Well, to be old-languaged, the fact-shed.
– Yeah, the back ages, the fact-shed or whatever. Yes, exactly. And the great thing about technology, of course, is that we’ve got many ways to communicate these days. We’ve got MailChimp, we’ve got newsletters, we’ve got Skype, Well, to be old-languaged, the fag-shed. There’s lots of ways to communicate,
– Yeah, the back ages, the fag-shed or whatever. or a postcard to somebody who’s doing a good job. Just a note from the line manager or from the MD saying, “Really appreciate what you’ve done this week, or “this year. we’ve got Internets, we’ve got our websites. It goes a long way.
– Yeah, I think it’s interesting you mentioned the thank you notes, et cetra ’cause that value proposition for reward and recognition for staff or getting staff to come out to you isn’t necessarily about just giving a big massive salary to them.
– The problem with increasing salaries is that you get salary creep because if you think salaries are the best kept secret in any organisation, you’re wrong because people tend to talk, unfortunately, even if you ask them not to. So, you give a salary increase to somebody and somebody else gets to hear about it and they’ll want one. And so, salary is important, and I’m not trying to underplay it. You have to have a strategy around salary increases. If that’s linked to inflation or performance or bonuses or whatever, but ultimately, it’s more than salary. It’s about the whole employee benefits package. Either that could be right work schemes, it could be salary sacrifice schemes, it could be buying your employees lunch on a Friday. So, flexible working is a big opportunity for most firms at the moment. I wanna sit while back lying. Some of my clients have a home-based working policy. I know a lot of businesses are nervous about that because, how do you manage and how do you make sure they’re working rather than copious cups of tea? Well, yeah. You’ve got to work on it, but it does work, and if you manage it properly, it can be really beneficial to retention and recruitment.
– That’s awesome. So, there’s so much there that you’ve just been through in like a 20, 25 minute period I think we’ve just been through. I think if people listen to this podcast like two or three times, they’ll still pick up little top tip every time. I think from the beginning, where you talked about continuing to make sure you have half a day scheduled once a month in your business to work on your business, which we can’t repeat that message too much, I’m sure most people have heard it at least once, but whether they put it into action, might be a very different thing. And then you talked about not necessarily niching, but actually diversification and innovation, and also about the treating staff the right way and rewarding them in the right way as well. Is that a good summary?
– It is a good summary, and ultimately, it is about growing your business, it is about additional sales and revenue. But, the last thing I would say is that, when you are striving to attract new clients, as most businesses do, don’t forget your existing clients. I see so many businesses, when I go in and look at their client list or an identity list and I see a long list of clients who have stopped buying or reduced their levels of buying. And when I asked, “Well, why are these clients “no longer buying in the levels that they used to?” Or why they stopped buying, owners don’t know. They’re so focussed on the new clients and getting new clients that they must have forgot to ask why their existing clients have actually moved away from them, move to a competitor or stopped buying from them for whatever reason. So, look after what you’ve got, first and foremost, have a customer retention and contact strategy, They’re so focused on the new clients because it’s no good filling it if it’s coming out the bottom. But also, I’m not undermining the importance of marketing and sales in that order. You’ve gotta market first before you get the leads to then convert to sales, but ultimately, it’s no point spending copious amounts of time and money and effort on sales and marketing if you’re not looking after what you’ve got already, first and foremost.
– Yeah, be grateful for what you got and look after what you’ve got, definitely.
– And make sure that they’ve got the whole range of your services ’cause your clients will evolve themselves and their needs will evolve. And if they don’t know your full range of services, ’cause you’re not talking to them, you might nothing is about, well, how can they expect to buy from you when they don’t know that your full range? So, make sure you’re communicating with them, keeping them up to date with what you’re doing in your business, but also finding out what they’re doing in their business so you can match their needs with your products and services.
– Perfect. So, matching your product to help them, as opposed to generating from your business first and foremost?
– Correct.
– Cool. Thank you, ever so much, Gary, for that. Really appreciate it. I think we can all see and hear why you got your MBA. Congratulations on that, by the way. Thanks very much for your time today, Gary. We do love to have you on again, probably to talk even more. I’m sure there’s loads more that we can learn about you, but for now–
– We’ve scratched the surface. Thank you.
– Thank you very much for joining us on “Entrepreneur Survival Guide“
