Owning and running a small business can be incredibly rewarding, but it can also be daunting and overwhelming. When we jumped into this adventure we didn't have anyone close to us for advisement who is in business for themselves nor did we have a mentor. Certainly there are many lessons that will be specific to you, your location and/or your industry. They are things you’ll likely learn along the way or that you can get awareness of by joining groups (facebook, local chamber, etc.), reading books or trade magazines, or speaking with others in the same field.
There are also a number of lessons that can be learned from other entrepreneurs. That is what I will be sharing today. These aren’t the “buy a small business guide and read chapter to chapter” tips, rather, these are the “I’ve been in the trenches and learned a few things” tips. I hope you find them helpful!
1. Be Very Specific With Your Goals
There are also a number of lessons that can be learned from other entrepreneurs. That is what I will be sharing today. These aren’t the “buy a small business guide and read chapter to chapter” tips, rather, these are the “I’ve been in the trenches and learned a few things” tips. I hope you find them helpful!
1. Be Very Specific With Your Goals
I have 1 year, 3 year, 5 year and 10 year goals. Basically, I’ve taken my 10 year goals and broken them down into smaller chunks. All goals are revisited (and revised if needed) annually.
Goals should be incredibly specific in order for you to see them, feel them, and work toward reaching them. For instance, instead of stating that you would like to increase your sales going into the new year, you should assign a percentage or a specific dollar amount. Instead of writing that you would like to gain more traffic to your site, again, set percentages or numbers and the timeframe.
With revenue goals, take an annual goal and break it down into chunks of whatever makes the most sense for your type of business (quarterly, monthly, quantity of products, etc.). This way it’s easier to identify quickly if changes need to be made, and you have the time to make them so you have the opportunity to achieve your annual goal.
2. Delegate Where Possible
Goals should be incredibly specific in order for you to see them, feel them, and work toward reaching them. For instance, instead of stating that you would like to increase your sales going into the new year, you should assign a percentage or a specific dollar amount. Instead of writing that you would like to gain more traffic to your site, again, set percentages or numbers and the timeframe.
With revenue goals, take an annual goal and break it down into chunks of whatever makes the most sense for your type of business (quarterly, monthly, quantity of products, etc.). This way it’s easier to identify quickly if changes need to be made, and you have the time to make them so you have the opportunity to achieve your annual goal.
2. Delegate Where Possible
This can be difficult as many times delegation comes with a cost. It may be a financial cost and/or the cost of someone else getting knowledge of different aspects of your business. The idea is to delegate the smaller stuff , if possible, so that you can focus on the larger pieces of your business.
3. Keep Your Overhead Low
3. Keep Your Overhead Low
I call this the “peace of mind” tip…….keeping your overhead intentionally low allows you choices. You have more options with your pricing (less overhead to factor in) and you have more options of reinvestment back into your business.
4. Keep Your Day Job For Longer Than You Would Like
4. Keep Your Day Job For Longer Than You Would Like
In order to make every effort to build a solid foundation, you must be able to reinvest into your business until that foundation is built. If you are taking an income from your business that significantly decreases the amount available for reinvestment. It’s by no means impossible, just more difficult.
If you look for stories of business failure you will find many instances where people “jumped” too soon. They were “discovered” – had a magazine feature, a television mention, etc. where their business went from crickets to the Thanksgiving Day parade all in the blink of an eye. They left their day job thinking they’d finally “made it”, only to find the parade re-routed within months to a competitor or the next big thing. That’s not to say you can’t figure out how to sustain some of the traffic you’re suddenly hit with. But it’s all in the planning and building of a solid foundation for your business and not assuming that kind of traffic will sustain without much effort on your part.
5. Don’t Put All Of Your Eggs In One Basket
If you look for stories of business failure you will find many instances where people “jumped” too soon. They were “discovered” – had a magazine feature, a television mention, etc. where their business went from crickets to the Thanksgiving Day parade all in the blink of an eye. They left their day job thinking they’d finally “made it”, only to find the parade re-routed within months to a competitor or the next big thing. That’s not to say you can’t figure out how to sustain some of the traffic you’re suddenly hit with. But it’s all in the planning and building of a solid foundation for your business and not assuming that kind of traffic will sustain without much effort on your part.
5. Don’t Put All Of Your Eggs In One Basket
This one scares me. I’m working very hard this coming year to ensure we are not doing exactly this. We currently receive over 50% of our annual sales from one source. Before you high-five me please understand that this is what worries me. If that source were to go away tomorrow, so would half (HALF) of our sales. That would be a huge step backward for us and we can’t afford (mentally or financially) to do that. So, this is one huge (costly) initiative for us in 2018.
6. Pick Your Opportunities Carefully
6. Pick Your Opportunities Carefully
This is a hard one if you’re just starting out. Initially it’s hard to say “no” when an opportunity comes-a-knockin’. It’s incredibly difficult to turn away work, money, advertising, or any other opportunity. But the reality is this. There are an unlimited number of opportunities that exist in the world and not all of them are right for you or right for your business. Think about each of them very carefully. It’s ok to say “no”. It’s very easy for others to judge and think you’ve lost your mind for turning down an opportunity, but if it doesn’t help you achieve your goals and/or isn’t right in some other way, then say “no”.
7. Embrace Feedback
7. Embrace Feedback
All constructive feedback is valuable. This is not to say that you should make a business decision for change based on all feedback, but it’s absolutely valuable to listen. Some examples from our own business:
Our body butter has been incredibly popular. There are 2 keys to using it: 1. Use a dab (not a dollop), and 2. Give it about 5-8 minutes to soak in once you’ve stopped rubbing it in. We’ve had customers either not follow the 2 keys and/or not appreciate the fact that it takes 5-8 minutes. I get it – we are busy people! Instead of altering the butter recipe, we formulated another product, body milk. It’s more like a traditional lotion (but a whole lot more moisturizing) and soaks in immediately. It was our response to the feedback.
When I first formulated our natural deodorant I used bentonite clay as one of the active ingredients. Feedback from customers was that although it worked fantastically they were put off by the green tinge the clay left. We listened to the feedback and immediately changed the formula so that the green tinge was no longer.
8. Know Your Numbers
Our body butter has been incredibly popular. There are 2 keys to using it: 1. Use a dab (not a dollop), and 2. Give it about 5-8 minutes to soak in once you’ve stopped rubbing it in. We’ve had customers either not follow the 2 keys and/or not appreciate the fact that it takes 5-8 minutes. I get it – we are busy people! Instead of altering the butter recipe, we formulated another product, body milk. It’s more like a traditional lotion (but a whole lot more moisturizing) and soaks in immediately. It was our response to the feedback.
When I first formulated our natural deodorant I used bentonite clay as one of the active ingredients. Feedback from customers was that although it worked fantastically they were put off by the green tinge the clay left. We listened to the feedback and immediately changed the formula so that the green tinge was no longer.
8. Know Your Numbers
If you’re not a numbers person, they can be incredibly boring (they are to me) but you must know them. It’s the only way to appropriately set financial goals and it’s the backbone of any Company. What are your true product costs? Which product(s) has the highest profit margin? Which has the lowest? What is your customer acquisition cost? How much does it cost to make each of your products (hourly cost)? etc.
Not everything should be metric-driven but numbers should be the foundation of your business and, therefore, business decisions.
9. Find Out What Your Customers Need
Not everything should be metric-driven but numbers should be the foundation of your business and, therefore, business decisions.
9. Find Out What Your Customers Need
If you’re selling a product or a service it’s imperative to know what your customer base is looking for. You can get a lot of information, as noted above, via feedback. You can also go about it in a more formal way and ask that customers fill out a survey.
10. Don’t Let Failure Result In Failure
10. Don’t Let Failure Result In Failure
We all have failure at some point in our life. It’s inevitable. But it doesn’t have to live as “failure”. Small failures are a GREAT way to learn and readjust our sails. Allowing ourselves to learn from our mistakes and therefore build better processes, formulate more effective products, or change up our marketing are all very effective ways to use what could be deemed a “failure”.
11. Tell Your Brand’s Story
11. Tell Your Brand’s Story
How do you set yourself apart from the faceless, nameless corporate brand that is compared to your products? Tell your story. Tell your customers who you are, why you’re in business and what sets you and your company apart from others. Part of making this easy is the creation of a website. It doesn’t have to be anything fancy, there are many free sites that use drag and drop templates and will take a couple of hours to set up.
12. Make Sure You Have A Business And Not A Hobby
12. Make Sure You Have A Business And Not A Hobby
It’s ok to have a hobby, but not if you’re trying to make it a business. The idea of a business is to be able to make enough income to support yourself and/or your household. It’s to replace working for another company. Make sure that the product or service you are selling has the potential of being an actual business.
For example, let’s say you love knitting widgets. Everyone tells you that you should sell these hand-knitted widgets. So, you spend a couple of months creating them. Once they are made you need to put a price on them. The price needs to cover, at the very least, your material expense but ideally your time as well. Then you need enough margin to factor in marketing, website, transportation and show costs, etsy fees, credit card fees, etc. If you look at your widget and realize it costs you $8.00 to make and there’s no way anyone would pay over $10.00 for it, this is a hobby. This is something you could do in your spare time and sell during the holidays for extra cash, but this is not something you would be able to grow into an actual business. You need to be very honest with yourself when you’re trying to determine what to do with things you are passionate about.
13. Think Like A Customer
For example, let’s say you love knitting widgets. Everyone tells you that you should sell these hand-knitted widgets. So, you spend a couple of months creating them. Once they are made you need to put a price on them. The price needs to cover, at the very least, your material expense but ideally your time as well. Then you need enough margin to factor in marketing, website, transportation and show costs, etsy fees, credit card fees, etc. If you look at your widget and realize it costs you $8.00 to make and there’s no way anyone would pay over $10.00 for it, this is a hobby. This is something you could do in your spare time and sell during the holidays for extra cash, but this is not something you would be able to grow into an actual business. You need to be very honest with yourself when you’re trying to determine what to do with things you are passionate about.
13. Think Like A Customer
It’s important to try and always keep this perspective. You will never ever (ever) please everyone. It just won’t happen. But, you should be able to identify who your target client is and please that person. That person and their anticipated needs will remain your focus for your business. As a result of this focus, you will please many many people.
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