Most entrepreneurs start small, but with big dreams. While phrases like this sound catchy, they don’t really do much to encapsulate all of the blood, sweat, tears, and extensive red tape that goes into growing a small business.
When it comes to running your own business, the odds are really stacked against entrepreneurs. According to data from the Bureau of Labor Statistics, 20% of small businesses fail within their first year, and half will not survive past the first five years.
There are many reasons why this is, however, one big one is ineffective business planning. Here are some things to build into your plans from day one so you can grow your business with confidence.
Don’t Fall Into The Trap of Doing It All
Especially in the US, our culture is very fixated on the idea of the individual who does it all alone.
Everyone wants to do it all or have it all, and many people feel a lot of shame when they cannot actually meet that high bar.
However, while you can start and maintain a one-person operation with this mentality, you simply cannot grow one that way.
It is important that you change your operations and strategy to reflect the reality of your business.
This means knowing when to let go, hire more team members, or outsource tasks outside of your wheelhouse.
When Your Small Business Shifts, Your Mindset Must Too
To keep it simple, say you started a wedding photography business, and originally you only had a couple or two a year. That is easy enough for one person to manage.
However, for this upcoming year you have dozens booked, some even on the same dates. Without some kind of help, it would be genuinely impossible to take care of those clients.
On top of that, you have the editing, equipment management, scheduling, communicating with clients, hiring of assistants and other employees, payroll, marketing, likely social media management, networking, and possibly even travel coordination.
No one person could do all of that alone. And you don’t want to find that out the hard way, by making mistakes and losing clients.
Why Is It So Hard For Entrepreneurs To Make The Shift?
For one, many people start small businesses with a partner or two, or totally alone. A famous phrase is that entrepreneurs “wear many hats.” This is a well-known saying for a reason. It is completely true.
At the end of the day, people are creatures of habit. If you have been so successful doing things alone or with minimal help that your business is growing rapidly, it probably seems counterintuitive to change that.
Another famous axiom “if it ain’t broke don’t fix it,” comes to mind.
However, the answer to that is that something that works well in one environment won’t work in all of them. If your business is changing, you have to be willing to change how you run it.
Remember, if your business is growing, you should be elated! Honor all the hard work you already put in by embracing the next phase!
Reassess Your Budget Regularly
There is no hard and fast rule about how often businesses should reassess their budgets. Most would recommend that quarterly is good enough.
However, we all know that things can happen, and most businesses rarely grow on a perfect schedule.
For example, say for example a social media post of yours goes viral, and you suddenly have thousands of conversions. In the span of a weekend, you make over $100,000 in revenue.
Even if you reassessed your budget two weeks ago, it might be a good idea to take a look at things again and figure out where you can reinvest that money.
Tracking where your money goes and what the results of your investments are is vital. While it is important to try things out and take risks, you don’t want to repeat things that don’t work over and over again.
Budget Your Time, Not Just Money
In the beginning, some small business owners fall into the trap of thinking of their business simply and endless list of tasks to complete.
In order to get ahead, you have to realize that your business is actually a powerful investment.
You put your sweat equity into something to get back more than you put in eventually. You spend money and expend your effort for a purpose, which is why tracking everything is so important.
You don’t want to do a whole bunch of things just to get them done. You don’t want to throw money or hours at problems just to make them go away.
As much as possible, you want to react thoughtfully and not just respond.
This is why continually assessing not only where your money is going, but where your time is going, is key.
If you could bring more value to the business by focusing on marketing rather than the daily running of it, perhaps it is time to bring in a manager, for example.
What do you do day in and day out? Are you creating efficient systems to create progress, or are you simply running around putting out fires?
Recruit At The Right Time
This one is tricky. When is the right time to bring on more people? If you involve too many new team members too soon, it will be a drain on the company.
You will essentially be paying a whole bunch of new people to not do much of anything. Of course, no one business owner wants that.
Also, a lot more goes into growing a company than simply hiring new people. Are you looking for full-time or part-time help? Are you looking strictly for freelancers? What kind of skilled workers and collaborators do you need?
Have you expanded so much that you need to outsource things like payroll, technology, or communications? What will Human Resources look like at your company? Legally, how will your company change in response?
There are so many choices to make here, that you can probably see why many entrepreneurs struggle with the growing pains of a booming business.
The Risks of a Small Business Failing To Recruit
We have likely all had the experience of being in a store or restaurant where they simply don’t have enough staff to make things run smoothly.
This is usually a frustrating situation for both workers and customers. In your own business, you have control and can avoid these headaches.
While you don’t want to bring on a whole bunch of people for no reason, if you recruit too late, you also run some risks. These include:
- Burning yourself out by creating a situation where you are attempting to do the work of many people alone.
- Putting so much pressure on existing staff that they leave, making the problem worse.
- Missing out on opportunities because you don’t have the manpower to take them on.
Final Thoughts on Small Business Growth
Again, if you have succeeded with your business and it is growing, you should congratulate yourself.
And if the transition between being a small business or even one-person operation and something bigger is proving to be more difficult than you thought, you are not alone.
Hopefully, these tips help you stay focused and approach growth with excitement, as well as a strong foundation.
What do you think? Comment below.
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