I was watching some YouTube videos of old David Letterman Top 10 lists this week and came across “Top 10 Favorite Names.” My favorite? Just A. Duck and Ted E. Bear. I laughed so hard that it got me itching to do my own top ten list. Most small business owners are forced to learn many of these lessons by raw experience, but I hope the following “Top Ten Tips to Small Business Success” can help you set solid habits and avoid several pitfalls. I even coupled them with my top ten favorite quotes for twice the value! In the words of the great David Letterman
“Next in importance to having good aim is to recognize when to pull the trigger.”
So pull the trigger and let’s get started.
1. Enjoy Your Business
I know most small businesses start when someone says “I love __. I should start a business.” But unfortunately, running a business is not just doing the parts we love, we also have to deal with taxes, bills, marketing, upset clients, insurance, and more.
Too often, we forget that initial excitement and energy as the daily grind eats away at us. My first tip: get that energy back. Don’t be afraid to hire someone to handle those things you don’t care for and are not good at. Those long days will fly by when you are chasing your passion instead of your headaches.
“Find something you love to do, and you’ll never work a day in your life” Harvey MacKay
2. Time Management
We are inundated with emails, text, and phone calls. With this barrage of people requesting our time, it is easy to get distracted. If you find yourself spending your days putting out fires or jumping from one project to another and never completing a task, then you need to get yourself focused and organized. Try delegating more tasks to your employees or staff. Focus on the tasks that are both urgent and important. This past week I spent an entire morning tracking down a $10 part for a client and was late submitting an estimate to another client worth over $6,000. There is no question that I had my priorities mixed up. Also, consider setting a few minutes aside each morning to plan your day and follow that plan. Finally, don’t let technology rule you. Don’t check your email every 15 minutes and turn off that email notification chime. Set aside specific time in the day for checking and responding to new emails and you will find yourself back in control or your time and your day.
“Time flies like an arrow; fruit flies like a banana.” Groucho Marx
3. Give Back to the Community
Working with local not-for-profits or charities not only makes you feel good, but it also gives you a deeper connection to the community. As long as you do not overextend (remember, you need to make money too). Unfortunately, charities can sometimes drive you crazy so here are a few tips that will make your contributions positive for both parties:
- Spell out exactly what the charity is having you do and what compensation you are to receive (i.e. recognition in their publication or an announcement at the banquet). Even though you may be doing the work for free or at a discount or just giving money, it is still a business transaction and the charity should not have any trouble signing an agreement that clarifies expectations.
- Choose one or two charities and stick with them. I get calls every week from charities asking for money. It is hard for me to say “no” as I am sure they are all good causes. But giving to select charities allows you to build relationships within that not-for-profit. You may also choose to give time, money, or product. In the end, you will find more enjoyment and get a better return.
- Don’t be afraid to publish your works. The Bible says to give secretly and not to announce your good deeds to the world. That may be the way to handle charity on a personal level, but your business charity should be public. Announce your involvement in charitable events on your website or email newsletter. Place certificates or plaques you receive on your walls. Your business cannot benefit if no one knows your actions.
“No one has ever become poor by giving.” Anne Frank
For those of you like me that struggle with organization, this will be hard on you. But I can assure you it is worth it. Apart from managing your daily time (see above) you must outline goals for your business. When defining your goals remember they should be SMART…
Specific: For example, “We need to reduce warranty return calls” or “Increase sales of a particular product by 50%”.
Measurable: Comparing this year’s sales to last year’s sales is a good measuring tool. If the goal is not measurable, how do you know if you achieved it?
Attainable: Wild or fanciful goals can be a detriment and discourage you when you do not achieve them. I was recently watching Shark Tank when a young entrepreneur said his goal was to have a multinational, ten million dollar business by the end of the year. This was absurd when considering his current retail shop was barely making a profit. My first goals for my business were to hire a person a year for the first five years and to have a storefront by the end of year five. I am happy to say we are on year three and still on track.
Rewarding: If the goal is not rewarding, then there is no incentive to reach it. Avoid goals like “Increase Sales” instead say “Increase Profit.” Also, attach rewards to your goals like “If I land two big new clients this year then I am going to take that cruise I have been dreaming of.”
Timed: Set a time period when the goal should be attained. Open ended goals are like open ended engagements…the big day may never come. Setting a date makes all the difference.
It is a fact that goals that are written down are achieved nine times faster than those that are not. Print your goals on a piece of paper and stick it behind your computer screen or somewhere you will see it every day. It will keep you focused and directed.
“He…is like the sailor who boards a ship without a rudder and compass and never knows where he may be cast” Leonardo da Vinci
5. Ripple Effect
In the small business world, money and time is a precious commodity. When starting a small business or expanding, owners tend to focus their attention on the initial investment — rarely do they take into account the unexpected expenses that will occur over the next 12 to 48 months. Unforeseen expenses or delays can “ripple” outward affecting all aspect of your business. Simply overestimating time and capital needs by 25 percent for all new business ventures will save you, the owner, from worrying about unanticipated money needs, it also saves valuable time that could be used for other tasks and activities.
“The future depends on what you do today” – Mahatma Gandhi
6. Managed Growth
Growth is the number one cause of failure in the small business world. “WHAT?!” you may say, “How can growth be bad?” The answer is simple: You need to prepare and plan for growth. This past year I failed at this concept miserably. At the beginning of 2011, I was running around $3,000 in Accounts Receivables at any given time and Gross Sales were just over $100,000. In May Suddenly, I landed four, back to back large contracts. I immediately hired a new employee and got to work. However, I had trouble paying my suppliers. What happened? My receivables went from $3,000 to over $25,000 overnight. I also had additional expenses equipping a new vehicle, training a new employee, and outfitting a new storefront. I was making money hand over fist on paper, but my back account was near zero and my suppliers are waiting to be paid. When setting goals remember that growth must be controlled and managed. Future staff needs to be trained and in place, capital items need to be saved for, and (if needed) credit must be in place.
“And the day came when the risk to remain tight in a bud was more painful than the risk it took to blossom.” – Anais Nin
7. Sell, Service, Be the Best
Unlike H.G. Wells quote below, not all ads are falsehoods, but many consumers have become wary of traditional, static advertisements. Most small businesses survive on word of mouth advertising and positive client reviews. Of course all forms of marketing are important, but a long term, successful business will need clients who are fans. Don’t be afraid to go the extra mile for a good customer and don’t get lost chasing that new client at the expense of a perfectly good existing client. Make sure you and your employees invest in meeting your client’s needs, understanding your products and services, and understanding the community your live in.
“Advertising is legalized lying.” – H.G. Wells
8. Beware of Fancy Toys and Side Shows
As mentioned before, growth is the number one cause of failure for a small business. Growth can cause failure in several ways. During periods of rapid growth and increasing profits, “killer toys” (for instance, owning a fancy car) and “side show ventures” (such as an expensive hobby, another business, or extreme vacationing) become very appealing. Nothing is wrong with having a little fun and enjoying the fruits of the business; however, disaster comes when the fun gets out of hand. Attention that should be focused on the continuing success of the business is now misdirected to spending money on new toys or a trip. The money and time spent frivolously outside the business on these ventures drains the business of funds and managerial focus and control. If these drains are not stopped, they will eventually lead to the demise of the business. Don’t let a short-run windfall in profit or cash flow influence and distract you from the goal.
“Materialism is the only form of distraction from true bliss.” – Doug Horton
9. Praise in Public, Correct in Private
Most businesses start as a one man operation. Things are going great. Business is booming. Profits are made. Then the business grows beyond what one man can handle. It is time to hire an employee. Most business owners have very little experience managing staff. The owner expects to hire a clone of themselves and expectations are high. The owner quickly becomes frustrated and discouraged when the employee does not perform as well as the owner would. To remedy this I recommend the following: • Allow the workers to prioritize and create their own schedules. As a manager, hold them to their agreements.
• Always look for an opportunity to praise an employee in public, but always correct him/her in private.
• Look for employees that are dependable, who show up for work on time, follow direction, and work well with people. A client will often overlook lack of skill or experience if the employee is friendly and helpful.
“Motivate them, train them, care about them and make winners of them…we know that if we treat our employees correctly, they’ll treat the customers right.” – J. Marriot Jr.
Small business owners suggest that networking with other owners and having a “professional team” are essential to the continuing success of a business. Having and utilizing fellow business people as contacts helps the owner to stay abreast of changes. It also gives the owner the opportunity to bounce ideas off of other professionals or get some industry specific advice. Casual contact with a banker, an accountant, a lawyer, a marketing expert, and an insurance agent can help the owner to get free advice and direction.
“Electric communication will never be a substitute for the face of someone who with their soul encourages another person to be brave and true.” – Charles Dickens
Owning a small business is stressful, frustrating, and consuming while also being exciting, flexible, and extraordinarily rewarding. I hope the above article will help you turn the old rat race into a stroll in the park. I also want to offer a special thanks to my son Jonathan for his contributions to this article.