I didn’t know what I needed to know before opening my own business.
I knew nothing about starting a small business. Luckily, the economy was great in 1996, and my niche was referral selling (still is), so I at least knew how to sell. My company took off quickly—almost too quickly. Why? I didn’t have time to develop a plan. A new business checklist would have been a lifesaver.
Now my advice for anyone starting a small business is this: However long you think it will take, double it.
Why? Because the stats are sobering: 23.2% of private sector businesses in the U.S. fail within the first year. After five years, 48.0% have faltered. After 10 years, 65.3% of businesses have closed. You don’t want your business to fail.
Whether you have a small business now or are planning on starting one, try hosting brainstorming sessions with good food—it always helps. Include people you know and some you don’t, and don’t forget teenagers! They bring a fresh perspective that’s often overlooked. Discuss topics from marketing strategies, when to hire, what tasks to delegate, to even tweaking your tagline.
Let’s Talk Growth
1. Pay Attention to Cash Flow Without cash flow, you risk going out of business. Don’t be a statistic. According to data from the U.S. Bureau of Labor Statistics, about “20 percent of U.S. small businesses fail within the first year. By the end of their fifth year, roughly half have faltered. After 10 years, only around a third of businesses have survived.” That’s why cash flow is #1 on my list. Even if you’re great at numbers, get help from a CPA. You must have someone external advising you and monitoring your income and expenses. Your focus should be on driving your business, not trying to manage every penny on your own.
2. Charge What You’re Worth Yep, most everyone undervalues their own work. One of my colleagues said: “Your price should be scary plus 20 percent.” Try it. If you get push-back, don’t drop your price. You could remove a deliverable and/or offer payment terms.
3. Stick to What You’re Good At The age of the generalist is long gone. The narrower your focus, the more you’ll be viewed as an expert. Companies hire experts. Stay in your lane.
4. Hand off redundant tasks: Offload tasks that don’t need your attention so you can focus on growth. The first task I delegated was bookkeeping. Fortunately, in a previous business, I’d learned how to read a financial statement. My CPA at the time wouldn’t let me hire a bookkeeper until I knew how to enter every piece of data. It was so boring and difficult, but his advice served me well.
5. Build a New Skill You know where there are gaps in your talents. Be a student and soak up every bit of information that will take you from where you are now to where you need to go. Remember, without a roadmap, you could end up any place, and that’s nonsensical.
6. Prioritize Wisely The most important activity for any business owner is to do what’s “closest to cash” the first thing every single day—whether it’s following up with a prospect, writing a proposal, or closing a deal. Most of us get buried in email every day and surface a few hours later. If you do what’s “closet to cash” first, it doesn’t matter if other things on your list don’t get done. They’re just not that important.
Challenges Don’t Stop
How many balls can you keep in the air at one time? Some business owners are better jugglers than others, but everyone has their breaking point—or, rather, their dropping point.
Juggling priorities is a challenge for every business owner. You’re overwhelmed with business development and all the things you need to do to attract and retain customers. Whether you’re a solopreneur, salesperson, or CEO of a small business, you feel the constant push/pull between prospecting, working with existing customers, managing social media, and staying in touch with everyone (which can seem like an unending task).
As a business owner for more than 28 years, I’ve faced these challenges and more. I know it’s tricky to take your head out of the weeds long enough to work on the business when you’re so busy working in your business. The problem is, if you don’t make the time, you won’t have a business.
My solution: I dedicate two Monday mornings a month to work on my business, reviewing and adjusting my goals, and planning next steps. Who wants to talk on Monday morning, anyway? Working on my business is creative and refreshing.
Whatever you decide for your business, stay focused on the future.
(A few words about me)
Joanne Black is America’s leading authority on referral selling—ensuring small businesses and sales teams get referral introductions and close business well more than 50% of the time. She’s the author of No More Cold Calling™: The Breakthrough System That Will Leave Your Competition in the Dust, and Pick Up the Damn Phone!: How People, Not Technology, Seal the Deal.
