Small business and marriage have a lot in common, both have a pretty high failure rate (about 50%) and many of the ones that are still running, aren't particularly happy with its current state. Yet, there are a small number that thrive and get stronger as time goes on. These small businesses (and marriages) have figured out how to overcome the challenges, weather the storms and to love their business.
So how do you become that small minority that thrives over the long term? For me personally, it comes down to a few things that I've shared below. This list may not apply to everyone, but if you can get a grasp on everything below, you will be way ahead of the game and on the road to continued business success.
“Formal education will make you a living; self-education will make you a fortune” – Jim Rohn
The desire to continually learn more. I personally think this is the single most important skill you can have as an entrepreneur because it affects how well you do everything else on this list. Your business can't grow faster than you can, so as your business grows, you need to grow along with it.
Any business owner will tell you that they have to wear dozens of different hats as a business owner. You need to know how to market your business, manage finances, hire and train good people in addition to every other thing that comes your way in the course of doing business. That's a tall order for a business owner and the only way you won't let all of these things drag you under is to continually educate yourself and get better as a business owner.
One of the most transformative things for me were audio books and podcasts. Instead of listening to the radio during long commutes, I would listen to an audio book (first on CD, then eventually on Audible.com) and now podcasts whenever I was driving in the car or running on the treadmill. Lame? Boring? Maybe, but not to me since I realized how much I was learning and how much better I was getting at running my business and managing others.
“You must take personal responsibility. You cannot change the circumstances, the seasons, or the wind, but you can change yourself. That is something you have charge of. ” -Jim Rohn
In my pre-entrepreneurial life, I was a fireman in NYC. I remember my first assignment after getting promoted to Lieutenant, my Captain told me on my first shift, “Just so you know, as an officer you're never in charge but you're always responsible”. Well said Captain Jim, I tell people that quote when they start complaining about employees not listening to them or when they start blaming everyone else for the business problems they are having.
What I have learned over the course of owning my own business for 10+ years and working with lots of other business owners is that ultimately, you are responsible for your business's successes and failures and almost all problems are your fault.
This doesn't mean to flog yourself everytime something goes wrong, it just means to look internally for the reason things went wrong instead of copping out and blaming external forces. That's the first step to solving problems and growing as a business owner.
When a problem arises, I ask myself, “What could I have done to prevent this?” Underperforming employees? Were they trained and mentored properly so they can succeed at their position? Major advertising fail? Did I really do my homework and research before signing the contract? Fine print on your lease is coming back to haunt you? Did I ever read the lease properly or did I abdicate responsibility to my real estate lawyer?
For the small business owner, all roads lead back to you. Like I said, taking responsibility does not mean beating yourself up every time something go wrong, it means empowering yourself because if you caused it, you can fix it. People that blame others take no responsibility for their actions and you can't fix what you don't own.
“Trust but verify” – Ronald Reagan
Failure to delegate is the reason why the majority of small businesses cannot grow past the mom and pop stage, where the owner has control over every aspect of the business. In order to grow your business and take some of the pressure off of you as the business owner, you need to learn how to delegate responsibilities to others.
Most first-time business owners lack experience in hiring, training and mentoring others. They hire half hazardously, provide little training and get frustrated when their employees underperform. The fastest way to grow and to take the pressure off you is to surround yourself with good people and give them responsibility. An excellent book of hiring and managing the right people is the book, “First Break All The Rules”.
Another major mistake business owners make is abdicating responsibility instead of delegating. When you delegate, others are taking charge but you are still responsible for the end result and to ensure it was completed successfully. When you abdicate, you are giving up ownership and responsibility to someone else, relieving yourself of responsibility and over-site for things you should not. Like Ronald Reagan said, “Trust but verify”.
“Good marketing makes the company look smart. Great marketing makes the customer feel smart.” – Joe Chernov
Marketing is the lifeblood of your business, it is how you continually keep the pipeline filled with business. Without a new stream of customers, your business will slowly die.
On the surface, marketing is pretty easy, in reality, it can be very difficult to make it work economically. I think many new business owners take marketing for granted thinking if they spend the money the customers will follow. We've all spent thousands on newspaper ads or direct mail campaigns that produced nothing or blown through hundreds of dollars in pay per click advertising without so much as a phone call. Trial and error, you learn from past experiences and get better as time goes on.
If you want your business to thrive, you need to develop the right marketing mix for your business. Every business is different, what works for someone else may not work for you. The key with marketing success is not to get it right the first time, but to continually improve over time. Learn to test and measure and make adjustments as time goes on. Companies that do this eventually create powerful marketing systems for their business.
Business owners also fall into the trap of trying one marketing/advertising tactic one time and dropping it to try something else. If you decide to try something, make sure you try it enough to make the determination that it's not a good fit for your business. Things like direct mail, SEO and networking take time to develop and to see results. A business that runs a single direct mail campaign (or anything else) that fails and declares, “direct mail doesn't work”, is like a person picking up a guitar for the first time, playing a few clunky cords and declares, “guitars don't work”. Yeah, they don't work for you, but they work fine for people that know what they are doing.
“Discipline is the bridge between goals and accomplishment.” – Jim Rohn
I think one of the major advantages of a franchise over an independent business is discipline. This discipline evolves out of past experience and successes of other franchisees in the system. A franchiser may require you to do things you may find excessive and cost prohibitive, such as expanded hours even though you are not busy or requiring front desk staff when you are losing money keeping them there all week. They may require continued advertising spend when you are not seeing results. What the franchiser knows is that these things will eventually pay off and make you a more successful business in the long run. An independent business may look at these as a waste of time and resources and start cutting back before they are able to pay off.
This continual corner cutting often leads to a downward spiral that many small businesses can't pull out of.
It may be tempting to close early, stop advertising, cut staffing hours or use a cheaper quality material to save a few bucks, but often times they lead to longer term issues of customer trust, brand quality and poor service that leads to a poor business reputation and lost sales. Sometimes you have to make tough decisions, just make sure you think about the long-term impact on your business before you make them.
“The only way you will ever permanently take control of your financial life is to dig deep and fix the root problem.” – Suze Orman
Most businesses shut down due to financial reasons. The reasons the finances are in poor shape may be numerous, but lack of cash usually brings a business to a grinding halt. As a business owner, you need to have a firm grasp on the finances of your business. If you're like me and hate financials, you need to get someone you trust to keep track of what is happening with your money.
You'd be surprised how many business owners ignore the financial problems they are having, thinking if they ignore it long enough, things will fix themselves. What usually happens is that they ignore the financials until it is too late and lack the resources to pull themselves out of the financial hole they dug for themselves.
Not only do you need to understand profit and loss statements, you also need to have a firm understanding of the cash flow for your business. Many profitable businesses went under, not because they couldn't turn a profit, but because they had major cash flow problems they couldn't fix in time. How does that happen? Account receivables, slow payers, having to pay for inventory and supplies up front and taking way to long to get paid by customers. For many businesses, you need freely available cash to fill these gaps and if you take your eye off the ball, that gap can get so wide that you run out of cash.
As a business owner, know how your business works financially and never take your eye off the ball, no matter how bad you want to. One thing I also learned is that lenders want to lend to you when you don't need, the second you run into trouble and need money, good luck trying to get a loan. Secure you lines of credit, financial reserves, etc long before you need them.
“You can have it all, just not at the same time” – Oprah Winfrey
News for you, despite what you read you will never have a perfect work/life/family balance. It's a lie. Oprah Winfrey said it best, “You can have it all, just not at the same time”. At any given time one part of your life will be dominating everything else, the key is understanding this and making an effort to bring some balance when the time comes.
Just starting a business? No balance, your new business startup will consume you and take just about all of your time and mental capacity. Starting your own business is hard work and very difficult so you it will need your full attention.
Crisis at home? No balance, you will need to direct most of your attention to home life until things settle down. Family comes first, your business success is pointless if it is at the expense of your family. With your own business, there is no separation of work/home, it's not a 9-5 job where you can physically and mentally clock out every day. It also doesn't mean that it should dominate your life, it just means that owning your own business becomes part of who you are, which is why you should enjoy what you do.
Don't feel guilty working an 80 hour week because you have a tight deadline to meet, but also don't feel guilty taking a day off to spend time with the family. If you find yourself working 80 hours a week all the time, then there is a problem that needs to be fixed before you burn yourself out. On the flip side, don't ignore fires that could seriously hurt your business because you planned on doing some weekend gardening.
One more note, and this is my personal opinion, don't go out and start a business unless your significant other is onboard with it. You will hit some serious waves when starting a business and the stress can be unbearable, with the only thing keeping you together is knowing that you both jumped into entrepreneurship together. This is a whole other article, but thought I would throw it in there.
Here's to your business success
Continual learning, taking responsibility and never taking your eye off the important things will put you on a path to continued success. Good luck.