I’ve been a creative entrepreneur since 2005. My first design company was a partnership with my significant other. It was largely a freestyle experiment in running a business, conducted live over the course of five years. As a business, it was marginally successful. As a learning experience, it was my equivalent of a masters of business administration.
So, by the time I had started my second and current company, I had a pretty good blueprint of don’t’s for running a small business. I had been fortunate enough to make the mistakes that have yielded five valuable lessons learned — lessons that have truly paid off the second time around.
1. Don’t rush into partnership
It was only after my original partner and I parted ways did I recognize that we should never have had a professional partnership in the first place. Just because someone is your best friend, long-time coworker and / or significant other hardly qualifies them as the perfect candidate for maintaining a business. I say “maintaining” because it’s far easier to get excited about the prospect starting a company than being able to handle the day-to-day reality of running it efficiently.
The best partner is typically someone whose skills and approach are the polar opposite of yours. The first ensures the you are able to cover a lot more ground without additional employees. The second may create conflict, but it’ll force you both to defend your business instincts and weed out lesser ideas before you waste resources.
2. Don’t get discouraged
Running a company isn’t a goal — it’s a long, winding road. Enjoy the process! Unless your goal is to cash out, and you’ve got some built-in exit strategy, chances are you want a long-term entrepreneurial career. You will have ups, and you will have downs — possibly in the same week or even day. You will gain amazing clients and lose others for reasons fair and unfair. That’s all part of having a business.
I’ve yet to encounter a single business owner who’s reached some grand, stable plateau beyond failure, disappointment and doubt. We all experience it. Instead of discouragement, focus on becoming more resilient, on learning how to handle stress productively.
3. Don’t forget why you wanted to start a business in the first place
Whether it’s following a passion or having more control over your time to devote to family, always remember why you started down this road in the first place. It’s easy to get carried away and forget what it was you wanted from your own business. I, for example, was driven by quality-of-life factors, especially time off for my other passion — travel. At times, temporary sacrifice may be truly necessary, but it pays to be conscious of when you’re in danger of permanently shelving the very thing you wanted most.
4. Don’t try to do everything yourself
I started my first company with $500 — barely enough to cover the costs of incorporation. So, right away, I developed an addiction to doing everything myself. My partner was only capable, willing and able to do so much, and I found myself doing a lot of admin tasks I never anticipated. Those tasks came with learning curves, and they took up valuable time and energy — energy that could have been directed at helping the business grow.
I didn’t make this mistake twice. With my second, far more successful attempt, I contracted my business half just a couple of months in. Although my expenses grew, now I could focus on doing better work as well as devote time to business development. Both actions helped to grow the company far quicker than my former money-saving attempts at being my own bookkeeper.
So, resist the urge to cover all the ground alone. Saving financial resources is important, but don’t let your task list undermine your big goals.
5. Don’t stop evolving
Your strategy, your marketing plan, your target market — nothing is set in stone. The world is changing more and more rapidly each day. Your industry will likely experience a shift, whether slight or monumental, at some point. As a small business, you are at a disadvantage, because your resources are a lot more limited. But you have a priceless advantage in ability to change course and adapt far quicker than a larger organization.
The best way to remain relevant is keeping your eyes open for changing tides, your mind open to new ideas and staying flexible.
And, of course, don’t be too afraid of making your own mistakes!
Originally posted on Entrepreneur by Maria Rapetskaya
The U.S. Small Business Administration reports that this country has 29.6 million small business owners. Together, these owners constitute an army of hard-working Americans
Regardless of what industry they’re in, be it retail and construction, food and beverage manufacture and hospitality, or home services and automotive, these small businesses require hard work and a tremendous time commitment. Here at my company, Kabbage, we sought to understand what that commitment really looks like on the weekends, after hours and at home.
We wanted to understand the common professional and personal challenges of small business owners and how they balance their work- and home-life to pursue their passions.
That’s how, working with leading small business research agency Bredin, we came to survey 400 self-identified small business owners in November. The results? Most of those 400 owners had undeniable commonalities: They characterized themselves as highly motivated to succeed, and all described countless personal and financial sacrifices to build their business.
The data highlighted the sacrifices small business owners (SBOs) make annually, including financial challenges: The survey found, for instance, that almost half (47 percent) of SBOs polled said they used personal savings to pay for one or multiple aspects of their business, while 21 percent reported using more than a quarter of those savings. Interestingly, the use of personal savings to start a business was most common (75 percent) among millennial SBOs.
Small business owners surveyed were also highly committed to business growth. Whenever they had extra cash, they were most likely to reinvest it into their business rather than treating themselves or planning for their personal future. Here is a breakdown of the largest percentages:
- 40 said they would immediately reinvest in the business rather than pay themselves
- 17 percent would save for retirement
- 14 percent would set aside extra cash for personal or family investments
The takeaway: Entrepreneurs tend to use extra cash to take care of their businesses before they take care of themselves.
While tapping into savings or asking family for funding are options many successful companies take, there are other, newer ways businesses can accumulate cash in the early days of a businesss, such as Indiegogo, Kickstarter or alternative lenders. These options reduce the risks for you or your family on the front end while also testing the demand for a product early on. Be sure you research the options that are best for you and your company.
Reinvesting in your business is the only way to realize true growth, but reinvesting in yourself and your future is just as important. There are a host of sources, from blogs and online courses to industry associations, to help you maintain a solid financial footing, whether you’re just getting started or need guidance as you grow.
More telling in terms of what it really means to be a small business owner was the study result showing that among the companies surveyed, owners tended to forgo what many of us take for granted. This meant less time off work, fewer meals with family, less oppportunity to be home during the holidays and fewer needed visits to the doctor or dentist. Specifically, the survey showed that:
- The number one sacrifice each year was not taking a vacation
More than half of the owners surveyed (60 percent) said they take only one vacation per year; and nearly one quarter (23 percent) took fewer than two vacation days annually. When they do go on vacation, the SBO owners said, more than 75 percent still do work. More results on these personal sacrfices:
- Nearly one-third (29 percent) said they work more than 50 hours per week, while 86 acknowledged working on weekends
- Some 53 percent worked one of the six major holidays (New Year’s Eve, Independence Day, Memorial Day, Labor Day, Thanksgiving, Christmas)
- More than half ate only one meal at home daily
- One in five said they missed three or more doctor’s appointments every year
- Across the board, SBOs said they missed out on social events and hobbies because they were focused on building their business
Optimism for 2018 and future Investments
The data showed the sheer commitment the small business owners surveyed had to succeeding; they also described themselves as highly optimistic about the future. Two-thirds expected to end 2017 with higher revenues, with more than half anticipating earning 10 percent or more than they had the previous year.
Looking ahead to 2018, the SBOs surveyed intended to make investments to improve their productivity and efficiency. Among those who intended to make these investments:
- 36 percent said they would seek ways to improve their skills
- 32 percent said they would invest in new technologies
- 28 percent said they intended to hire more employees
The takeaway: The entrepreneurs surveyed were heavily committed to investing in themselves and their companies.
The need to take care of yourself
Investment in your company is a positive, of course, but not at the expense of personal care or mental health. Both factors are important to have, to prevent fatigue and burnout. So, while seeking new tools for your company may make it more productive and efficient, having a team you trust to care for your business as well as you do yourself will give you the peace of mind you need when you do take time off. Key ways to do this? They include:
- Improve the office culture — build a positive environment
- Put individuals in charge of their ideas — create accountability
- Coach and be a mentor — build trust and loyalty.
Your top leaders will identify themselves organically, and you’ll be confident in their ability to watch the shop when you take time to care for yourself, take time off or be with your family.
To summarize: Small business owners answer calls to fix pipes at midnight and labor work through the weekend to serve customers. They’re truly the heartbeat of our economy; and, as we gain more insight into what it takes to be a small business owner, we should all see that they deserve the public’s gratitude.
Originally posted on Entrepreneur by Victoria Treyger
In a world where social media and product association are rampant, small businesses know there’s great strength in numbers. Business owners benefit considerably when they collaborate with other entrepreneurs to build branding and ultimately thrive together.
The Competitive Advantage of Collaboration
There are costs associated with any venture, but when you team up with a company that provides goods or services that you don’t, you significantly reduce the time and money you put into a new channel. Another word for collaboration is bartering — both businesses provide expertise and mutually beneficial services, strengthening each other in doing so.
The more businesses you partner with, the larger your potential client base grows and the greater the demand for your product becomes. Whether you’re an e-commerce site or a brick and mortar, by bartering you gain an advantage on those who aren’t partnering up.
Finding the Right Partner
To ensure you’re collaborating with a “merger” rather than a “moocher” and to safeguard yourself from the biggest partnership pitfalls, ask yourself the following questions before entering an agreement:
- Can their industry or sector accommodate the needs of my company?
- Is this partnership professionally or personally driven?
- What am I committing to this partnership?
- What are my goals and objectives for this partnership?
- Specifically (and with as much detail as possible), how will the two businesses collaborate?
- What data, intellectual property, patents, and secured information can be shared/obtained while collaborating?
- What is the ROI of any funds allocated to this partnership?
- What is my business NOT offering that this potential partner IS offering?
While professional collaboration may be attractive, if the data doesn’t back the decision, it’s safer to go it alone or look for other partnership opportunities.
Keep It Personal, Keep it Local
Small businesses may aim for global expansion, but attention should focus locally (or at least on a localized market) in the early stages. A business that offers a physical product the local community needs — which is generally why the product is offered in the first place — should buy local and establish a local entrepreneurial group that meets regularly. These groups spark innovation, improve marketing strategy, and increase community interest in small business ventures, which equals higher profits.
Most of all, keep it personal. It’s your business and your livelihood at stake. If you have doubts about collaboration, get a professional opinion. If you can’t get one, walk away. Better to err on the side of caution than risk an ill-informed partnership.
Originally posted on Entrepreneur.com by Jana Barrett