There's no easy stage when running a business. The challenges just change and there are some quite significant milestones that can introduce these changes.

As we've seen, in the early stages of a business the challenges are around validating your business model and understanding that there's a customer willing to pay the price for your product or service. It’s about raising enough cash to start trading and getting early pilot customers to test your product and service levels and give quality feedback so you can keep refining the model, getting ready for prime time and preparing for rapid growth.

This book is about providing you with the fundamental elements you need to consider to ensure you have the best chance of success. Many people can't be bothered putting in the hard yards to validate their business model, and sitting down with their accountant to constantly run over the numbers and the ‘what if’ scenarios to understand exactly how much they need to sell and at what price and profit margin. Then there's determining who the customer is, and how they'll communicate with them and determine whether they will buy the product or service. Unfortunately, many will jump two feet in on a hunch without doing the groundwork and research first, and as a result simply waste a lot of money spoiling their chances of success. This will also often ruin their confidence or their financial opportunity to try again, even if they do things the right way the next time.

Once you get to the key $1 million revenue point and you've successfully navigated the initial challenges of getting your business validated and established, a whole lot of other challenges suddenly enter the equation:

• Managing inventory (optimal stock and re-order levels).
• Managing customers and collecting money.
• Managing supplier relationships and logistics costs.
• Managing people, payroll, tax liabilities and holiday leave.
• Managing cash flow, the bank and investors.
• Governance (creating a board or advisory board).

And the list goes on.

Systemising your business for growth

The only way to successfully grow a business rapidly is by building systems, processes and procedures — like a user manual on how your business will operate — and then delegating authority to key people to run those systems. The business can't simply revolve around you and grow, because if you need to control everything you'll become the bottleneck to growth. This is where the fundamentals of quality management come into play.

When my brother Greg and I were building the Regency Food Services business, we found our staff were constantly coming to us with virtually every issue they had to deal with, asking us what we wanted to do. There was always someone at my door with a problem. It made it impossible to get any of my own work done, which was critical to developing the business. As tends to be the case in any early-stage business, you want to help your staff and make sure everything is done correctly even though this doesn't end up helping you or the business and creates a culture where the staff place all the responsibility back on you and the problems just keep coming.

One of the things we learned early on in business was almost forced upon us. Hazard and critical control point (HACCP) analysis legislation was being introduced into the food distribution industry to identify any points of possible contamination and to control potential hazards. We wanted to position ourselves as leaders in the industry and to be the first to be prepared for this new legislation, which drove us to being one of the first companies in Australia to undertake the ISO 9001 quality management certification process.

For a relatively small company, this was a hugely time-consuming process and forced us to write detailed job descriptions for all our employees that cross-referenced every key task they were responsible for to the associated processes and procedures. These had to be written in detail that dealt with everything from how we took orders, including how we answered phones and how we spoke to people, through to the confirmation and processing of orders, how the warehouse and stock was managed, how orders were picked, how trucks were loaded, how deliveries were made …  everything! It was a daunting task.

As young, first-time business owners, what we discovered during this arduous process was that something magical was starting to happen. I was suddenly in a position where I could tell those who were lining up outside my office to refer to their procedure for how to manage an event or a scenario and gave them the authority to manage it. Initially I would ask them to suggest how they should manage it, then I would ask them to make the decisions and report the results and eventually I would only need to know if something went wrong and needed my attention. If a new scenario occurred that the procedures didn't currently deal with, we would document it and build it in so that next time we knew how to manage that issue and it was no longer a problem. This is the process of continual improvement and corrective action. Quite quickly the line of people and constant interruptions stopped, and my brother and I had time to work on the business and continue to innovate and apply our ideas, moving the business ahead in leaps and bounds.

Different levels of delegation authority are also a great way to manage pay levels within your business and can be used in creating your organisation chart, linking delegation authority to positions or levels on the chart, or directly to position descriptions. If people don't want to accept responsibility, it limits their ability to progress within the business. This starts to focus you back on the recruitment process because you want to be hiring people who can grow and be promoted within the organisation and take on different levels of responsibility. People who can eventually become part of your senior management team.

Having a structure and framework made us realise we had fundamentally systemised our business and created a platform that could cope with rapid growth. Without it we would continue to flounder and be faced with ongoing barriers to growth. This was a vital lesson that I was able to apply to ZEN Energy right from the very early days, and when the market was ready to launch with unprecedented demand, the business was ready and able to grow with it, with consistency in its operation so customers’ expectations were always met and, in most cases, surpassed. ZEN had a three-year average annual growth rate of over 400 per cent, which we simply could not have managed without an internal quality management system and a leading-edge accounting platform, on which we made sure we used every feature possible to improve our service offering.

If you asked me what is the number one key to success, it would be consistency. This comes through adherence to structured processes and procedures so everyone who interacts with your business gets a consistent experience day in, day out. A great experience every time is fantastic, and will definitely lead to satisfied customers making great reviews and referrals. Paradoxically, consistently poor service isn't necessarily bad if what your customer is after is a cheap price and they receive it each time. That's probably the consistency they're after and they simply accept the poor service that comes with it. When your performance is good one day and bad the next, that's the fastest way to lose customers and receive terrible reviews. People don't like inconsistency, and people delivering the service are often the worst culprits, so rigorous training in the business culture, values and how your staff are to interact with all your stakeholders is essential. And when I say your stakeholders’, I mean everyone from your customers to your suppliers to your staff to finance providers and anyone else key to your business. Then it's information: people like to be well informed on a regular and timely basis that's consistent every time and has no surprises.

The ‘crystal ball’ plan for the future

An incredibly valuable exercise for entrepreneurs entering the scale-up phase is to imagine your company in five years time and at 10 times its current revenue. What would it look like and how would you get there? Start-ups and even scale-ups are so lost in their busy day-to-day world that they find it extremely difficult to imagine themselves and their company into the future, but it's a vital part of planning.

Start with the end goal in revenue and profit and step back year by year looking at every key aspect of your business, from the infrastructure you need, to the organisation chart of people and positions, the inventory and logistics and the marketing and sales processes. Once you have a systemised approach to your business, you'll be surprised how the scaling plan can fall into place and suddenly you can see the five-year pathway and how it could become real.

Then come back to year one, where you have the most clarity, and fill in the detailed goals of what needs to be achieved. Take your staff on the journey so everyone is aligned with the plan and buckle up for a rocket ride!

Mentors and peers

Finding an appropriate mentor or, even better, a support network of people who are experiencing similar challenges and willing to share their experiences is an invaluable learning platform.

Back in 1998, after Regency Food Services had won South Australian Entrepreneur of the Year, we caught the attention of the Young Entrepreneurs' Organization (YEO), a global networking and development group for business founders. It had originated in North America a few years prior and was just starting to establish itself in Australia. They were setting up ‘chapters' in each state and were looking for someone to establish and become the founding president for South Australia — and I was the perfect fit at the time.

I agreed to establish the chapter and brought together a group of the state's brightest young entrepreneurs, all completely passionate about their purpose and all absorbed by their businesses. The qualifying criteria at the time was being under 40 years of age and the founder, co-founder or controlling shareholder of a business with a revenue in excess of USD$1 million.

It was a group designed purely to share experiences both from within the businesses and personally. From my own personal situation, none of my friends back then even owned a business, let alone a large business. They didn't understand the hours I worked and thought I was mad! The opportunity to bring a group of like-minded, ‘half crazy’ people together was one of the most formative times within my business career and I'm proud to say that many of the early members of EO (as it is now known) are among my closest lifetime friends.

As members were starting to reach 40 years of age, everyone was having such a great time they decided to change the name globally to the Entrepreneurs' Organization (EO) and took away the age limit. I maintained my membership for 20 years until 2019 and proudly saw out the incredible 20th anniversary celebrations, taking the group back on a journey over the 20-year history and the many adventures and stories we shared together over that time. The opportunity to talk through and share experiences in a structured format on how both you and other members navigated all the different challenges in managing a business is absolutely invaluable. A topic is put on the table by the presenter for the night and each forum member shares their personal experience in how they dealt with that particular scenario.

This also helps you keep up to date with industry trends, legalities, the latest technology people are using, how they are recruiting and retaining people, how they are controlling their cash flow and the experience of managing all their stakeholders including bankers, investors, customers and suppliers.

Beyond my own companies, the EO experience allowed me to be a close witness to the commercialisation and growth of two to 300 companies during that time, opening my eyes to the inherent traits of successful entrepreneurs.

Of those, one of the most powerful traits is the ability to focus intensely. It's a trait of genius and a curse at the same time. It's so important to try and maintain a life balance and slow down the pace a little to make time to look after yourself and those around you. As entrepreneurs we are so focused on building the future that we forget about the here and now. We get completely absorbed by our businesses, and we often forget to take the blinkers off occasionally and smell the roses.