How to keep your small business sustainable

What makes a business profitable, and how do you sustain the success of your business?

We sat down with Sam Allert, Reckon’s CEO, to discuss his recent presentation of the company’s 2024 year-end results and how small businesses can sustain their success.

This interview has been edited for clarity.

Goal setting and investing for your small business

Reckon’s 2024 results highlighted sustained growth and a plan to continue investing in its product suite. How would you suggest a small business owner invest in their business on a smaller scale?

My overarching philosophy is to keep it simple. First of all, you need to have clear goals. The goal is the destination, and the plan is how you will get there. If you have goals and a business plan, the answer to your question is easy. You will know where to invest.

At Reckon, we have a clear goal: to invest in and promote our flagship cloud product, Reckon One. This product is where we see the most growth, and we want all of our clients to be on that platform in the next three to five years. So, what’s our plan to do that? We plan to improve functionality, refine our migration procedures, and support so we can make the best product for our customers with the best upgrade process. Because we have these goals, we know exactly what areas we need to invest in.

Take, for example, a hypothetical lawn mowing business. The owner’s goal is to one day be off the tools. They don’t want to be pushing a lawn mower late into their 60s, so with that goal in mind, what does he need to do? They realise they will need 2-5 staff members and a certain number of clients to sustain the business. Now, our lawn mower business has areas to invest in. If the business has a great pool of clients, invest in recruitment. What if the business doesn’t have the client base to support additional staff? Invest in marketing. What if the business has the staff and the client base but doesn’t have the right tools? Then, the business needs to invest in new equipment.

Sounds simple, right? Well, when you have goals, the answers become clear.

Metrics and values for evaluating your small business

Reckon posted strong results in 2024, with over $50 million in revenue. What metrics should small businesses consider when assessing their value?

Any financial lesson or business coach will say: “Look at revenue. Look at profit and look at cash flow.” All of these are important; however, they are meaningless without context. The context is your goals, which we discussed above. You will be able to evaluate your business’s metrics properly with clear, actionable goals in mind. Most business owners want to be profitable. Yes, you’re in there to deliver the product that your customers want, and ideally, your business is a passion, but in every business owner’s mind should be profitability.

When evaluating a business, I look at several things. One is its health. Let’s use our lawn mowing business from earlier. I would also look at the quality of the product and service, the quality of the clients, and the likelihood of returning business. I would then identify the key people in that business. Would this business survive without these individuals? This is a test of the strength of the business’s structure and systems. In the case of small businesses, the trap that some owners fall into is that they are the business. Without them, there is no business. It may be counterintuitive if you own a small business, but you want to make yourself redundant as an owner. One day, you might want to sell, so having a distribution of responsibility spread across your business through different systems and procedures helps.

The importance of team culture for small business

As the CEO of Reckon, you have always fostered the idea of strong relationships and strong team culture. What are three ways businesses could cultivate their own team and business culture?

Strong relationships and a strong team culture go hand in hand. The world is about people, right? I’ve always found it difficult to fathom how you would operate a business, let alone live, without having the right people around you whom you can rely on. You don’t have a business without clients or a team; you just don’t. If you don’t have the client’s interest at heart, you’re kidding yourself about running a business. If you only worry about making money, it’s going to show at some point, and it will be challenging to keep clients and keep them happy. You will eventually be bogged down with stress and will hate running your own business.

That is why you should have a culture, an ethos, based on strong relationships. You tell yourself you will care for your clients and, more importantly, your team. I am incredibly fortunate to be part of a culture that involves the team, hearing from them, their feedback, and listening. We allow everyone to shine and be themselves, and then give them the tools and opportunities to continue to do that. A strong culture can be the backbone of a business that allows you to do anything. I’m not saying that Reckon will go out and operate in another industry; we don’t have the expertise for that. But we are a technology company with every department on the same page. If you have the right team, it means you can pivot and deal with any challenge.

So, how do you check your team culture? Again, I like to keep things simple. Sit down with them and talk with them. If you’re a large business, regularly conduct confidential staff surveys and incorporate team chemistry-building events that don’t involve being at work. If you’re a small business with three to four employees, grab a coffee, a beer, or whatever your drink of choice is at least a few times a year. Create the time, sit down, and don’t speak about work; ask how they are. There will be times when not everyone will get along, but people will continue to do their jobs if they’re treated fairly and equitably.

Incorporating vision into your small business

Throughout the webinar, you emphasised the importance of a strong company vision. Why is a strong company vision important, and would a small business implement one?

A strong company vision is an idea or philosophy incorporated into your business that you, your employees and clients can relate to. I have seen people take far too long to articulate a vision for their business. Say your idea of a company vision is to be profitable. Why do you want to be profitable? The answer may be: I have bills to pay, the cost of living is high, I want a new house for my family, etc. In response to that, I would then ask: Why? The answer to this question tends to be: I want my freedom, work-life balance, and spending time with my family; I need flexibility. Vision is about your values and long-term goals getting rolled into one.

What you have are some ideas and concepts that are universal, something you can articulate and everyone understands. That is what you can put into the vision of your company. Take Reckon, for example. We want to be a partner of small business owners. We have your back; we are all for small. Everyone has a right to succeed. So we provide tools, services, training and education to do that. When it comes to Reckon, we want small businesses to say, “Hey, Reckon is a mate I can lean on, and they have my back.”

Let’s revisit our lawn mowing business. Take our business owner: maybe he loves the outdoors, and a regular 9-5 just doesn’t cut it. Well, the vision for the business can stem from that. Nature and the outdoor lifestyle are important to them. It can be as simple as linking your lifestyle goals and wrapping them into the business. This can then help you articulate what your business is all about.

 

 

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